AI Tool Has No Sanction In Law To Prepare And Issue GST Show Cause Notice: Punjab & Haryana High Court

The Punjab and Haryana High Court has recently quashed a GST show cause notice after holding that it had been issued primarily by relying upon an Artificial Intelligence (AI) tool, the use of which was not shown to have statutory sanction. The challenge was founded on a document annexed to the show cause notice and uploaded on the department's portal. The document referred to various AI-based aids and included suggestions to "Tighten this further with case-law citation paragraph-wise", convert...

Madras High Court Directs Chennai Corporation To Reimburse Contractor's GST Burden After VAT Change

The Madras High Court on 7 July held that government contractors are entitled to reimbursement of additional GST paid due to the transition from the VAT regime to the GST regime if the change in tax law occurred after the award of contracts. A Bench of Justice C. Saravanan directed the Greater Chennai Corporation to reimburse the GST burden incurred by Sakthi Constructions for the remaining works under government contracts that were awarded before the introduction of GST on 1 July 2017. He...

GST Seller's Failure To File Returns Cannot Deny ITC To Bona Fide Purchaser: Gauhati High Court

The Gauhati High Court on 16 July held that a bona fide purchaser cannot be denied Input Tax Credit (ITC) merely because the selling dealer failed to file GST returns after collecting tax from the purchaser, and that the department must proceed against the defaulting seller. Justice Devashis Baruah allowed a writ petition by Advance Engineering Farms and Equipments challenging the rejection of ITC on generators bought in FY 2017-18, holding that treating the claim as excess ITC went against the...

Madras High Court Directs GST Authorities To Adjust Tax Paid Under Wrong Head Instead Of Seeking Fresh Payment

The Madras High Court has directed the GST authorities to adjust tax already paid under the wrong tax head instead of requiring the taxpayer to make a fresh payment before claiming a refund. It held that a taxpayer who has discharged the entire tax liability within time cannot be penalised merely because the amount was inadvertently deposited under the wrong GST head.Justice Senthilkumar Ramamoorthy disposed of the writ petition filed by SYA Homes and set aside the rectification order to the...

Calcutta High Court Upholds GST Order Uploaded A Day After Limitation Expired

The Calcutta High Court has upheld a GST adjudication order even though its summary was uploaded on the common portal a day after the limitation period expired. The court held that the statutory limitation applies to the issuance of the order and not to its subsequent service. Justice Raja Basu Chowdhury dismissed a writ petition filed by M. M. Motors and another challenging an adjudication order for the 2018–19 tax period. The petitioners argued that the adjudication order could not be treated...

Madras High Court Quashes Bank Account Attachment Under GST For Lack Of Tangible Material

The Madras High Court on 8 July held that a provisional attachment of a taxpayer's bank accounts under Section 83 of the Central Goods and Services Tax (CGST) Act cannot be sustained merely by reproducing the statutory language without disclosing any tangible material or reasons to justify the action. Section 83 of the CGST Act empowers the Commissioner to provisionally attach a taxpayer's property, including bank accounts, to protect government revenue during the pendency of specified...

GST Adjudicating Authority Not Bound To Seek Additional Documents Before Passing Order: Delhi High Court

The Delhi High Court has held that an adjudicating authority under the Central Goods and Services Tax Act, 2017 is not obliged to call for additional documents or clarifications from a business merely because it finds the material placed on record to be insufficient to determine tax liability.A Division Bench of Justices Anil Kshetarpal and Shail Jain dismissed a writ petition filed by Sodexo India, challenging a GST demand of around ₹8.75 crore.The Court rejected Sodexo's contention that the...

Karnataka High Court Says Third Parties Cannot Invoke Art. 226 Against GST Rulings, Dismisses BMRCL Challenge

The Karnataka High Court on 7 July held that a person who is neither the applicant nor the concerned tax authority in an advance ruling proceeding cannot challenge the ruling under Article 226 of the Constitution, as such rulings are binding only on the parties to the proceeding. A Division Bench of Justices S.G. Pandit and K.V. Aravind dismissed Bangalore Metro Rail Corporation Limited's (BMRCL) writ petition challenging an order of the Karnataka Appellate Authority for Advance Ruling (AAAR),...

Appellate Order Setting Aside GST Refund Rejection Doesn't Bar Fresh Examination Of Claim: Delhi HIgh Court

The Delhi High Court has held that an appellate order setting aside the rejection of a GST refund claim does not automatically entitle the assessee to an unconditional refund, nor does it bar tax authorities from examining the claim afresh on other legally permissible grounds.A Division Bench of Justices Anil Kshetrapal and Shail Jain made the observation while dismissing a writ petition filed by M/s Karamsar Poultry Appliances, which had challenged an order rejecting its refund claim of ₹3.44...

No GST Payable On Machinery Returned For Testing Without Fresh Consideration: Karnataka High Court

The Karnataka High Court held on 25 June that a company does not incur GST liability when it returns machinery to a seller for testing without any fresh consideration, as the movement does not amount to a taxable supply. A Division Bench of Justices S.G. Pandit and Rajesh Rai K dismissed the State's appeal and upheld the Single Judge's order reducing the penalty imposed on AAM India Manufacturing Corporation Pvt. Ltd. to Rs.25,000, while directing the Department to refund the remaining amount...

Madras High Court Refuses To Quash Canon India GST Notices, Says Taxpayer Must Reply Before Challenge

The Madras High Court has held that a taxpayer must first respond to a GST show cause notice before challenging the invocation of Section 74 of the Goods and Services Tax (GST) law (which deals with tax demands involving alleged fraud, suppression or wilful misstatement). Justice C. Saravanan dismissed Canon India Pvt. Ltd.'s writ petitions challenging the GST DRC-01 show cause notices but granted the company 30 days to file detailed replies. He observed: "The fact that the Petitioner has not...

GST Order Need Not Elaborately Deal With Every Submission In Taxpayer's Reply: Delhi High Court

The Delhi High Court has held that merely because a GST adjudicating authority does not elaborately deal with every submission made by an assessee in reply to a show cause notice (SCN), the same cannot lead to a conclusion that the representation was not considered.A division bench of Justices Anil Kshetrapal and Shail Jain observed that while Section 74(9) of the Central Goods and Services Tax Act, 2017 obligates the proper officer to consider the noticee's representation before determining...