Allahabad High Court Rejects Patanjali's Plea Against ₹273.5 Crore GST Penalty

The Allahabad High Court has directed continuation of proceedings under Section 122 of the Central Goods and Services Tax Act, 2017 against M/s Patanjali Ayurved limited's 3 plants even though proceedings under Section 74 of the Act have been dropped against them.The bench of Justice Shekhar B. Saraf and Justice Vipin Chandra Dixit held “Under the present GST regime, persons who are not liable to pay tax under Sections 73/74 of the CGST Act may very well be liable for penalties as described in...

Issuance Of Show Cause Notice U/s 74 Of CGST Act Does Not Imply Violation Of Natural Justice: Himachal Pradesh High Court

Section 74: Determination of tax not paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts.Himachal Pradesh High Court held that when a show cause notice is issued under Section 74 Of the Central Goods and Services Tax Act, the matter is still at a preliminary stage, and objections can't be raised on the ground that it was issued with a preconceived notion or that it violates the principles of natural...

12% IGST Is Leviable On Imported 'Lemoneez' Drink: CESTAT

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that 12% IGST is leviable on imported 'Lemoneez'. The Bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) was addressing the issue of whether 'Lemoneez' is appropriately classifiable under residuary item 2106 90 19 as a soft drink concentrate [under miscellaneous edible preparations, not elsewhere specified], or under Tariff Item 2009 31 00 (juice of a single citrus...

Rampant Misuse Of S.16 GST Act For Wrongful Availment Of ITC Will Create 'Enormous Dent' In GST Regime: Delhi High Court

The Delhi High Court has once again flagged concerns over rampant misuse of Section 16 of the Central Goods and Services Tax Act 2017 by traders, for wrongful availment of Input Tax Credit.The provision enables businesses to get input tax on the goods and services which are manufactured/ supplied by them in the chain of business transactions. It is meant as an incentive for businesses who need not pay taxes on the inputs, which have already been taxed at the source itself.A division bench of...

Whether Compensation Cess Is Leviable On Goods Supplied To Merchant Exporter: Gujarat High Court Asks GST Council To Decide

The Gujarat High Court has referred a matter to the GST Council to decide on whether the compensation cess is leviable on goods supplied to merchant exporter. The Division Bench of Justices Bhargav D. Karia and D.N. Ray observed that “……..no notification is issued by the Central Government or State Government under the Compensation Cess Act and therefore, the assessee is made liable to pay Compensation Cess at normal rate i.e. 160% on the supply of goods to merchant exporters for...

GST | Delhi HC Rebukes Trend Of Persons Who Wrongfully Avail ITC By Invoking Writ Jurisdiction; Imposes ₹1 Lakh Cost

The Delhi High Court has criticized the “pattern” of persons, who either availed fraudulent Input Tax Credit or enabled the availment of fraudulent ITC, invoking Court's writ jurisdiction to challenge orders imposing penalty under Section 74 of the Central Goods and Services Act 2017, on technical grounds.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta further observed,“This Court also takes note, with some consternation, that such large scale fraudulent availment of ITC...

Dept Cannot Be Blamed If Assessee Is Not Diligent In Checking GST Portal For Show Cause Notice: Delhi High Court

The Delhi High Court has made it clear that an assessee cannot claim he was not granted an opportunity of hearing before an adverse order is passed, if he fails to check the GST portal for show cause notice and respond to the same.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed,“Since the Petitioner has not been diligent in checking the portal, no reply to the Show Cause Notice has been filed by the Petitioner. Thus the department cannot be blamed.”The remarks...

Orders Under Omitted Rule 96(10) Of CGST Rule, 2017 Post 8th Oct, 2024 Not Valid; No Savings Clause: Uttarakhand High Court

The Uttarakhand High Court stated that orders passed under omitted Rule 96(10) Of CGST Rule, 2017 post 8th Oct, 2024 is not valid. The Division Bench of Chief Justice G. Narendar and Justice Alok Mahra stated that there was no scope for the department to pass any order by invoking the provisions of rule 96(10) of CGST Rule, 2017 after the same was omitted on 8th October, 2024 without a saving clause in favour of the pending proceeding. In this case, the assessee/petitioner who is...

Once Input Tax Credit Is Wrongfully Availed Due To Fraud Or Suppression, State Officer Can Issue Notice Even Without Central Action: Patna HC

The Patna High Court has upheld a tax assessment order passed by the State GST Authority, clarifying that once a Proper Officer determines that input tax credit has been wrongfully availed or utilized due to fraud or suppression of facts, they are empowered to issue a notice under Section 74(1) of the CGST/BGST Act, 2017. A Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Sourendra Pandey held, “According to sub-section (1), wherever it appears to the Proper Officer that there...

Penalty U/S 122(1A) Of CGST Act Can Be Imposed On Both Taxable And Non-Taxable Person: Delhi High Court

The Delhi High Court has held that the penalty for GST evasion contemplated under Section 122(1A) of the Central Goods and Services Tax Act 2017, can be imposed on 'any person'— whether taxable or non-taxable.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta thus differed from the Bombay High Court's decision in Amit Manilal Haria V. The Joint Commissioner of CGST & CE & Ors. (2025) which held that Section 122(1A) cannot be invoked against an employee as he is not a...

GST Inspection Not Legally Sustainable Without Compliance With S.67 Of CGST Act & S.100 CrPC: Patna HC Quashes ₹88.64 Lakh Tax Demand

The Patna High Court, while allowing a petition challenging a tax demand of ₹88,64,550.50, has observed that an inspection conducted under the BGST/CGST regime is legally unsustainable if not carried out in compliance with Section 67 of the BGST/CGST Act, 2017 read with Section 100 of the Code of Criminal Procedure, 1973. According to Section 67 of BGST/CGST Act, 2017, an inspection to be conducted in accordance with the Code of Criminal Procedure. Further, as per Section 100 of the Code of...

GST Dept Expected To Empathetically Consider Assessees' Requests To Adjourn Personal Hearing On Medical Grounds: Delhi High Court

The Delhi High Court has observed that the Goods and Services Tax authorities are expected to empathetically consider an assessee's request for adjournment of personal hearing on medical grounds.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta said the Department should not proceed to pass adverse orders in such matters.The development comes in a petition filed by an optical firm, claiming that impugned order raising demand of approximately Rs.1.5 crores was passed by the...