Supplier Cannot Automatically Recover GST From Recipient Without Contractual Basis: Kerala High Court

The Kerala High Court has held that a supplier's statutory obligation to pay Goods and Services Tax (GST) does not automatically entitle the supplier to recover the tax separately from the recipient of the service.“The liability of a supplier to discharge the tax payable under the statute and the question as to whether the supplier is entitled to pass on the burden of such tax to the recipient are distinct and separate matters," the court ruled"However, the right to collect tax from the...

Kerala High Court Quashes GST Notice Issued Before Audit Findings Were Finalised

The Kerala High Court has held that a GST show cause notice issued on the basis of preliminary audit observations, before the audit findings attain finality, cannot be sustained. The court also held that tax authorities must consider a taxpayer's reply to discrepancies before finalising the audit findings.Justice Ziyad Rahman A.A. was hearing a petition filed by The Alleppey Company Ltd., challenging a GST show cause notice issued despite its requests for additional time to respond to audit...

Kerala High Court Upholds GST Recovery Against Satwa Solutions For Failure To Raise Timely Objection

The Kerala High Court on 26 September refused to interfere with GST recovery proceedings against Satwa Solutions and upheld the dismissal of its writ petition challenging the proceedings arising from a statutory notice and subsequent final order. A Division Bench comprising Justices Devan Ramachandran and Basant Balaji held that the taxpayer had failed to raise its objection to the notice at the appropriate stage. It observed: “It is unmistakable from the attendant circumstances, that the...

Time-Barred GST Refund Claim Cannot Trigger Deficiency Memo: Madras High Court

The Madras High Court has held that a GST deficiency memo cannot be issued merely because a refund application is time-barred, as such a memo is meant to address a remediable defect in the application. Justice Senthilkumar Ramamoorthy on 1 September, disposed of a deficiency memo issued to L.S. Pacific Wood Tech Pvt. Ltd. after it sought a refund under Section 54 of the GST enactments. The Bench observed that “a deficiency memo cannot be issued on the ground that the refund application is time...

Madras High Court Quashes GST Notice To Queen Mira School, Says Assessment Must Precede Recovery

The Madras High Court on 24 September quashed a show cause notice issued to Queen Mira International School, while granting the department liberty to initiate fresh proceedings in accordance with law. Justice C. Saravanan held that the GST authorities must first assess the tax liability of an unregistered person under the prescribed statutory mechanism before proceeding against such person for tax recovery. The Bench observed: “Under the GST enactment, the Department has to first invoke the...

CGST Penalty: Delhi High Court Says Questions On Limitation, Proper Officer & Liability Must Be Raised In Appeal

The Delhi High Court has declined to entertain writ petitions challenging penalties imposed under the Central Goods and Services Tax (CGST) Act, observing that questions concerning limitation, the competence of the Proper Officer and the nature of the petitioners' liability should be examined by the statutory appellate authority.The Division Bench of Justices Anil Khetarpal and Bharat Parashar was dealing with three connected writ petitions arising out of a common adjudication order dated March...

Revenue's Delayed Internal Communication Of GST Orders Cannot Extend Appeal Limitation: Karnataka High Court

The Karnataka High Court has held that the Revenue cannot extend the statutory limitation for filing a GST appeal by relying on delayed intra-departmental communication of an adjudication order.It held that the limitation period has to be reckoned from the issuance of the order and cannot be left open-ended.A Division Bench of Chief Justice Vibhu Bakhru and Justice K.S. Hemalekha observed that Section 107(2) of the CGST Act gives the Revenue six months from the communication of the adjudication...

Later DRC-01 Date Alone Cannot Make GST SCN Time-Barred: Delhi High Court

The Delhi High Court has held that a delay in generating Form GST DRC-01, an electronic summary of a GST show-cause notice, does not by itself make the underlying notice time-barred if the substantive notice was issued within the prescribed period.The Division Bench of Justices Anil Khetarpal and Bharat Parashar was dealing with two petitions filed by a proprietorship concern challenging proceedings under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017.The principal issue...

GST Appeal Pre-Deposit Has No Impact On ITC Blocking Under Rule 86A Of CGST Rules: Madras High Court

The Madras High Court has held that making the mandatory pre-deposit for filing a GST appeal does not, by itself, require unblocking of Input Tax Credit (ITC) blocked under Rule 86A of the GST Rules. Justice Senthilkumar Ramamoorthy clarified that although the pre-deposit results in a deemed stay on recovery of the balance demand under Section 107(7) of the Central Goods and Services Tax Act, 2017 (CGST Act), it does not affect a separate blocking order under Rule 86A, and disposed of a...

Calcutta High Court Quashes ₹1.68 Crore GST Demand Against SREI Equipment Finance After CIRP

The Calcutta High Court on 1 October allowed SREI Equipment Finance Limited's petition and quashed the Rs. 1.68 crore GST demand raised for alleged excess availment of integrated goods and services tax (IGST) input tax credit on imported goods for FY 2021-22. Justice Aryak Dutt held that tax authorities cannot initiate or continue proceedings for pre-resolution plan dues that were not lodged during the corporate insolvency resolution process (CIRP), as approval of the resolution plan...

Punjab & Haryana High Court Lays Down Guidelines For ITC Reversal Where Supplier Fails To Deposit GST

The Punjab and Haryana High Court has upheld the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax (CGST) Act but held that the provision cannot be used mechanically to make a purchasing dealer reverse input tax credit (ITC) merely because the selling dealer failed to deposit tax with the government.A Division Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor held that Section 16(2)(c), read with Section 155, cannot be treated as a...

Gujarat High Court Rejects Writ Plea, Finds GST Officer Was Authorised To Verify Vehicle Carrying Goods

The Gujarat High Court has rejected Shreeji Steel's writ challenge to GST confiscation proceedings after finding that the officer who physically verified its vehicle was authorised under Rule 138B of the CGST Rules.A bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati also held that the company had an alternative statutory remedy of appeal under Section 107 of the CGST Act. The court observed, “Upon examination of the documents on record, we find that there is no violation of the said...