GST Penalty Order Passed Beyond 7 Days Of Show Cause Notice Is Invalid: Jammu & Kashmir and Ladakh High Court

The Jammu & Kashmir and Ladakh High court has held that the seven-day timeline prescribed under Section 129(3) of the Jammu & Kashmir Goods and Services Tax Act, 2017 for passing a penalty order is mandatory. It ruled that a penalty order passed even a day beyond the statutory period cannot be sustained. A Division Bench of Acting Chief Justice Sanjeev Kumar and Justice Mohd Yousuf Wani observed that where the legislature has used the word "shall" while prescribing timelines for the...

ITC Can Be Denied To Buyer If Supplier Fails To Pay Tax: Supreme Court Upholds S.16(2)(c) Of CGST Act

The Supreme Court has recently upheld the Gujarat High Court's judgment sustaining the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017. In doing so, it affirmed that a registered purchaser cannot claim Input Tax Credit (ITC) unless the supplier has actually paid the tax charged on the underlying supply to the government.Upholding the High Court's judgment, the court observed, "High Court was fully justified in holding that no grounds were made out to...

Telangana High Court Upholds Mayuri Film's Tax Benefit, Says Unrescinded Notification Can't Be Overridden

The Telangana High Court on 24 July held that a tax concession granted through a Government notification cannot be withdrawn merely because a new entry is introduced in a tax schedule, unless the notification granting the benefit is expressly withdrawn, superseded or rescinded. A Division Bench of Justices P. Sam Koshy and Suddala Chalapathi Rao upheld the concessional sales tax benefit claimed by Mayuri Film Distributors on the sale of audio cassettes, holding that the Government Order...

CGST Act Has No Provision To Exempt Mandatory Pre-Deposit For Appeal: Delhi High Court

The Delhi High Court has recently held that there is no provision under the Central Goods and Services Tax (CGST) Act, 2017, to exempt an assessee from the mandatory pre-deposit required for filing a statutory appeal.A division bench of Justices Anil Kshetrapal and Shail Jain thus declined to entertain a trader's writ petition challenging cancellation of a GST registration.According to the petitioner, its GST registration had been cancelled on the allegation that the firm was non-existent and...

Andhra Pradesh High Court Quashes GST Detention Over Expired E-Way Bill After Vehicle Breakdown

The Andhra Pradesh High Court on 16 July held that GST authorities cannot invoke detention proceedings merely because an e-way bill had expired when the delay in delivery of goods was caused by a vehicle breakdown and there was no evidence of tax evasion. A Division Bench of Justices Ninala Jayasurya and T.C.D. Sekhar allowed the writ petition filed by SLV Elite Spaces LLP and directed the GST authorities to drop further proceedings initiated under Section 129 of the GST Act (which provides for...

Madras High Court Upholds ₹2.66 Cr GST Recovery Against Former Director Of CBIGS Advertising

The Madras High Court on 7 July held that tax dues of a private company in liquidation can be recovered from its former director under Section 88(3) of the Central Goods and Services Tax (CGST) Act, 2017, unless the director proves that the non-recovery was not due to gross neglect, misfeasance or breach of duty. Justice C. Saravanan dismissed three connected writ petitions filed by CBIGS Apparels and Jewels, its partner Mrs. N. Seetha, and Yantur Manufacturing Private Limited challenging GST...

Absence Of Audit Not A Ground To Reject KVAT Return Revision: Kerala High Court

The Kerala High Court on 15 July held that a taxpayer's request to revise returns under the Kerala Value Added Tax (KVAT) Act cannot be rejected solely because its accounts were not audited under Section 42 of the Act. A Bench of Justice Harisankar V. Menon allowed the petition filed by Bhima Enterprises, holding: “A reading of the aforesaid order would show that it pertains to the transportation of certain gold jewellery allegedly not supported by the documents required under the statute. In...

Rajasthan High Court Quashes GST Penalty Orders After Same Officer Approved Investigation and Adjudicated Case

The Rajasthan High Court has recently held that the a taxpayer's reasonable apprehension of bias could not be ignored where the Additional Commissioner who approved the investigation report leading to prosecution also adjudicated the proceedings arising from the same facts. The division bench of Justice Pushpendra Singh Bhati and Justice Praveer Bhatnagar consequently quashed the orders imposing penalties and the appellate order upholding them and remanded the matter for fresh adjudication.The...

Patna High Court Imposes ₹25,000 Costs On Taxpayer For Challenging GST Undertaking After Accepting Its Benefits

The Patna High Court, in the facts of the case, has held that a taxpayer who voluntarily furnishes an undertaking to obtain relief from GST authorities cannot subsequently challenge its validity after accepting the benefits flowing from it. It dismissed the writ petition filed by Umagaurav Private Limited and imposed costs of ₹25,000.A division bench of Justice Rajeev Ranjan Prasad and Justice Kumar Manish held that the petitioner, having secured the removal of restrictions on its bank account...

GST Cannot Be Deducted From Compensation For Compulsory Land Acquisition: Karnataka High Court

The Karnataka High Court has recently quashed the deduction of Goods and Services Tax (GST) from compensation awarded for compulsory acquisition of land, holding that such acquisition is not a "supply of goods or services" under the GST law."An immovable property cannot at any stretch of imagination is construed as goods. Therefore, there is neither supply of goods nor services, but an expropriation of the property of a citizen using statutory power. The petitioner has neither sold any goods nor...

Calcutta High Court Quashes GST Order, Says Notices Uploaded In 'Additional Notices' Tab Not Valid Service

The Calcutta High Court has set aside an ex parte GST adjudication order after holding that the taxpayer was denied a fair opportunity to respond to the show cause notice due to improper service of notices on the GST portal.It observed that the show cause notice, reminder, and adjudication order were uploaded only in the "Additional Notices and Orders" tab of the GST portal and not in the "Normal" tab. Justice Hiranmay Bhattacharyya held that such uploading does not amount to valid...

Punjab &Haryana High Court Grants Bail To Ludhiana Trader Accused Of ₹9.66 Crore Fake GST ITC Fraud

The Punjab & Haryana High Court has granted regular bail to a Ludhiana-based businessman accused of fraudulently availing Input Tax Credit (ITC) of nearly ₹9.66 crore under the GST regime.It observed that continued incarceration was not justified when the prosecution case was based primarily on documentary evidence.Justice Surya Partap Singh, while deciding the bail plea of Rohit Kumar Gupta, proprietor of Maa Steel, Ludhiana, noted that the petitioner had remained in custody for more than...