ITC Blockage Cannot Continue Beyond One Year Under CGST Rules: Madras High Court

The Madras High Court on 21 August held that a restriction on the use of Input Tax Credit (ITC) under Rule 86A of the Goods and Services Tax (GST) Rules cannot continue beyond one year. Justice S. Raveekumar directed the authorities to unblock the ITC of Metal Trade Incorporation, which had remained blocked for more than two-and-a-half years. He held: “the restriction was imposed on 27.01.2023 and more than 2 ½ years have passed. In view of the same, the restrictions on the blockage ceased to...

GST Authorities Must Sell Seized Goods After Due Notice If Owner Does Not Appeal: Karnataka High Court

The Karnataka High Court held that Goods and Services Tax authorities must proceed with the sale of seized goods under Section 129(6) of the Central Goods and Services Tax Act, 2017 and Karnataka State Goods and Services Tax Act, 2017 after issuing due notice if the owner of the goods does not avail the available appellate remedy. Justice B.M. Shyam Prasad disposed of a writ petition filed by TPJ Carriers, a transporter, and directed the State GST authorities to bring the seized goods to sale...

Gujarat High Court Quashes GST Orders Based On AI-Generated Non-Existent Case Laws

The Gujarat High Court on 20 August quashed GST cancellation and appellate proceedings against Faiz Enterprise after finding that the State Tax Officer had relied exclusively on AI-generated case laws, including non-existent and irrelevant authorities. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati held that adjudication proceedings cannot be sustained where an authority relies on unverified AI-generated case laws instead of independently applying its mind to the...

GST Officers Cannot Keep Tax Consultant's Office Sealed After Search Ends: Gauhati High Court

The Gauhati High Court on 10 August held that GST authorities cannot keep business premises sealed after completing a search when the owner had not denied them access. Justice Devashis Baruah directed the Assam GST Department to de-seal the office of Sri Surendra Sharma, a tax consultant operating under the name Sharma and Associates in Bokajan, Assam. The Bench held: “...the goods mentioned in the Annexure to the Order of Prohibition in FORM GST INS-03 can under no circumstances be said to be...

Karnataka High Court Quashes GST Recovery Against Company For Deceased Proprietor's Business' Dues

The Karnataka High Court has quashed GST recovery notices issued against a private limited company for dues of a proprietary concern run by a deceased proprietor. It observed that the company was a distinct and separate entity from the proprietary concern and could not be proceeded against for its GST dues. Justice B. M. Shyam Prasad was hearing a writ petition filed by BKR Services Private Limited along with the son and wife of late Rudraswamy B K, who died on May 25, 2023. The dispute arose...

Gujarat High Court Declares Pre-October 2023 GST Levy On Related Persons' Corporate Guarantees Unconstitutional

The Gujarat High Court has declared unconstitutional the levy of GST on corporate guarantees furnished by one related company on behalf of another before October 26, 2023, holding that the retrospective levy violates fundamental rights.However, the court held that GST can be levied from that date where such corporate guarantees continue.While upholding the constitutionality of Rule 28(2) of the CGST Rules read it down by removing the expression “whichever is higher” from the prescribed valuation...

GST Appellate Authorities Presumed To Know Government Notifications, Can't Ignore Them: Gujarat High Court

The Gujarat High Court has held that a taxpayer who filed a GST appeal before the January 31, 2024 cut-off cannot be denied the benefit of a special procedure introduced to allow appeals affected by limitation. The procedure permitted eligible taxpayers to file appeals against orders under Sections 73 and 74 of the Central Goods and Services Tax Act by January 31, 2024, subject to prescribed payment conditions.The Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati made the...

Delhi High Court Rejects Plea Against GST Registration Cancellation Over Failure To Reply To Show Cause Notices

The Delhi High Court has refused to entertain a writ petition challenging the cancellation of a firm's GST registration, noting that the assessee had failed to respond to show cause notices issued to it.Petitioner had approached the Court challenging the order cancelling its GST registration, the subsequent order rejecting its application for revocation of cancellation, and the appellate order passed under Section 107 of the CGST Act.The GST registration was cancelled after the firm was found to...

Kerala High Court Grants Wild Planet ITC Benefit, Says Delay Cannot Defeat Statutory Right

The Kerala High Court on 28 July held that a taxpayer cannot be denied the statutory benefit of input tax credit (ITC) under Section 16(5) of the Central Goods and Services Tax (CGST) Act merely because it failed to file a rectification application within the deadline prescribed by the Central Board of Indirect Taxes and Customs (CBIC). Justice Ziyad Rahman A.A. allowed the petition filed by Wild Planet Pvt. Ltd. and set aside the order denying the company ITC, holding that Section 16(5)...

No Supply Of Service In Building Plan Sanction Process, GST Cannot Be Levied: Karnataka High Court

The Karnataka High Court has held that Goods and Services Tax (GST) cannot be levied on charges collected for sanctioning a building plan, as the process does not involve any supply of goods or provision of services. Justice R. Nataraj on 21 July, partly allowed a petition filed by Sai Sravanthi Infra Projects Pvt. Ltd. and others against the Bangalore Development Authority (BDA) and other authorities, holding that the authorities lacked statutory authority to impose several charges while...

Order Authorising Arrest Under GST Law Must Be Communicated Before Arrest: Supreme Court

The Supreme Court on Wednesday ruled that an order authorising arrest under the GST law must be communicated to the person concerned before the authorities proceed with the arrest.“To ensure that anyone who is facing the apprehension of arrest is not left in a position of irreparable damage, we have said that Section 69 [CGST Act] order has to be communicated,” a bench of Justices Dipankar Datta and Sheel Nagu held.The court made the observation while setting aside a Bombay High Court...

Evidentiary Value Of Kachcha Parchis, Electronic Data Must Be Examined By GST Appellate Authority: Delhi High Court

The Delhi High Court has held that questions concerning the admissibility, authentication and evidentiary value of electronic data and handwritten 'kachcha parchis' relied upon in a GST case should be raised before the statutory appellate authority rather than examined in writ proceedings.The division bench of Justices Anil Kshetarpal and Shail Jain was dealing with a batch of writ petitions challenging orders passed under the Central Goods and Services Tax (CGST) Act against several entities...