GST Act | Three-Month Limit U/S 73(2) For Department To Issue SCN Is Mandatory, 'Technical Glitch' No Excuse: Delhi High Court

The Delhi High Court has held that the time limit set out under 73(2) of the Goods and Services Tax Act for issuance of show cause notice in relation to alleged short payment of tax, etc. is mandatory in nature, and cannot be excused on account of technical glitches on GST portal.A division bench of Justices Prathiba M. Singh and Shail Jain thus quashed a SCN issued after the 3-month gap prescribed under the provision.For context, Section 73(2) of the GST Act stipulates that show cause notice...

Entire Leased Land Treated As Industrial Construction: Gujarat AAR Blocks ITC On Rent, Repairs & Vacant Portion For Tata-Subsidiary

The Gujarat Authority for Advance Ruling (AAR) has disallowed Input Tax Credit (ITC) of Goods and Services Tax (GST) paid on lease rental on all three counts viz. for constructing factory building on leased land as well as vacant portion of land and on repairs, maintenance and renovation of factory building. The bench of Mr. Vishal Malani (Member- Central Tax) and MS. Sushma Vora (Member- State Tax) has ruled on ITC eligibility of GST paid on lease rental by dismissing the view of...

DGFT Issues Guidelines On Refunds & ITC For Exports Affected By Erstwhile CGST Rule 96(10)

Directorate General of Foreign Trade (DGFT) has issued a policy circular regarding refund claim or Input Tax Credit by affected exporters, where eligible as well as on redemption of Advance Authorisations impacted by the erstwhile Rule 96(10) of the CGST Rules, 2017. Rule 96(10) provided that a person cannot claim refund of Integrated Goods and Services Tax (IGST) paid on export of goods or services if exporter had availed benefit of specified exemption notifications under certain...

DRC-03 Payments Made During GST Search Not Voluntary; Refund Cannot Be Rejected Through Deficiency Memos: Karnataka High Court

The Karnataka High Court holds that payments made by assessee through Form GST DRC-03 at the time of search or pursuant to an investigation cannot be treated as 'voluntary payments' when amount was not determined through any formal assessment or adjudication. A Bench comprising of Justice M. Nagaprasanna, quashed deficiency memos issued by the Deputy Commissioner of Central Tax (Revenue) on two different dates rejecting refund sought by assessee. On this score, it was observed that...

No Technical Flaw If GST Orders Lack Visible Signatures; Digital Key Authentication Sufficient: Delhi High Court

The Central Goods and Services Tax Department recently explained to the Delhi High Court the process its officers follow when uploading any show cause notice or order on the GST portal. The explanation was tendered in response to a plea filed before the Court, challenging the legality of a demand order on the ground that the impugned SCN and the impugned order were not duly signed either physically or digitally.The Department now uses digital keys to upload orders on the GST Portal, and without...

Trader's Plea To Cancel GST Registration Unravels ITC Fraud, Delhi High Court Imposes ₹5 Lakh Costs Over Misleading Submissions

In an unusual turn of events at the Delhi High Court, an “innocuous” petition filed by a trader seeking cancellation of its GST registration unravelled fraudulent availment of Input Tax Credit worth lakhs.A division bench of Justices Prathiba M. Singh and Shail Jain thus imposed a cost of ₹5 lakh on the trader, ₹2 lakh of which would go to the Delhi High Court Bar Association, ₹2 lakh to the GST Department and remaining ₹1 lakh to the Sales Tax Bar Association.“Severe action is liable to be...

'Taxable Person' Under GST Includes Individual Behind Fake Firms Used To Fraudulently Avail ITC: Delhi High Court

The Delhi High Court has held that where fraudulent availment of tax by a fake firm comes to light, penalties can be imposed on the person behind the bogus operations.A division bench of Justices Prathiba M. Singh and Madhu Jain observed,“When the expression 'taxable person' has to be interpreted, the 'taxable person', so long as it is an identified real person/entity it would be the said person/entity itself. However, in the case of fake, nonexistent and fraudulent firms, who do not have any...

Delhi High Court Upholds Denial Of Cross-Examination By GST Dept Citing Trader's Conduct, Say It's Not An 'Unfettered' Right

The Delhi High Court recently slammed a trader, allegedly involved in clandestine manufacture of pan masala to evade tax and recovery of ₹70 lakh from his premises, for his failure to cooperate in the probe.A division bench of Justices Prathiba M. Singh and Shail Jain in this backdrop upheld the GST Department's order, denying the Petitioner-trader's right to cross-examination. It observed, “the right to cross-examination is not an unfettered right…the non-filing of a reply to the SCN and the...

Penalty Paid Under Economic Duress Not Voluntary Admission Of Liability Under GST Act: Tripura High Court

The Tripura High Court recently held that payment of a penalty under economic duress cannot be treated as a “voluntary” admission of liability, and tax authorities remain legally obligated to pass a final, reasoned order under the Tripura State GST Act, 2017. The ruling came in the case of R G Group, a Tripura-based supplier of electrical goods, whose consignment was detained in July 2024 by GST enforcement officials over alleged expired E-Way bills and vehicle discrepancies. The Bench,...

Communication On Email Address Is Sufficient Service Under Section 169 GST Act: Delhi High Court

The Delhi High Court has held that under Section 169(1)(c) of the Central Goods and Service Tax Act, 2017, a communication sent to an email address provided at the time of GST registration is adequate service of a decision, order, summons or notice or any other communication.A division bench of Justices Prathiba M. Singh and Shail Jain observed,“With respect to Section169 of the Act, this Court has also taken a view recently in W.P. (C) 4374/2025 titled Rishi Enterprises through its Proprietor...

GST Department Must Decide Refund Applications Expeditiously, Any Delay Adversely Affects Business: Delhi High Court

The Delhi High Court has called upon the Goods and Services Tax Department to expeditiously process the refund applications filed by registered persons/ entities.A division bench of Justices Prathiba M. Singh and Shail Jain observed, “As per the statutorily prescribed procedure, the refund applications have to be dealt with in a particular manner within the prescribed timelines as per law…if there is delay by the Department in processing and granting refunds, it has a cascading adverse effect on...

Informer Of GST Evasion Cannot Seek Reward As A Matter Of Right: Delhi High Court

The Delhi High Court has prima facie observed that an informer, who apprises the Department about evasion of goods and services tax by an entity, cannot seek reward for sharing such information as a matter of right.A division bench of Justices Prathiba M. Singh and Shail Jain were of the prima facie view that no such right vests in any informer.“In the opinion of this Court, the grant of an award or a reward to an informer is a discretionary grant,” it said.The development comes in a petition...