S.29 CGST Act | SCN Must Reflect Both Reasons And Intent Of Retrospective Cancellation Of Registration: Delhi High Court

The Delhi High Court has made it clear that an order cancelling GST registration of a trader with retrospective effect will not sustain unless the show cause notice preceding such decision reflects both the reasons and the authority's intent for retrospective cancellation.A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed, “in the absence of reasons having been assigned in the original SCN in support of a proposed retrospective cancellation as well as a failure...

Restaurant Service Or Bakery Product? Bombay High Court To Decide If Donuts & Cakes Should Be Taxed At 5% Or 18% Under GST

The Bombay High Court is to decide whether the donuts and cakes should be classified as restaurant service or a bakery product under Goods and Services Tax. The Division Bench of Justices B.P Colabawalla and Firdosh P. Pooniwalla were addressing the issue of whether the supply of donuts falls within the ambit of restaurant services under Service Accounting Code (SAC) 9963 or should be categorized as a bakery product subject to separate tax treatment under the Goods and Services Tax...

Delhi High Court Allows Indigo Airlines' Plea, Holds Levy Of Additional IGST On Repaired & Re-Imported Aircraft Parts To Be Unconstitutional

In big relief to Indigo airlines, the Delhi High Court has held that an additional levy of Integrated Goods and Services Tax (IGST) and cess under Section 3(7) of the Customs Tariff Act, 1975 on re-import of aircraft parts that were repaired abroad, is unconstitutional.A division bench of Justice Yashwant Varma and Ravinder Dudeja observed that “additional duty even after the transaction has been subjected to the imposition of a tax treating it to be a supply of service would be clearly...

Rule 36(4) Of CGST Rules Is Constitutionally Valid, Does Not Derive Power From Section 43A: Gauhati High Court

The Gauhati High Court has upheld the constitutional validity of Rule 36(4) of the Central Goods and Services Tax/Assam Goods and Services Tax Rules, 2017. The provision stipulates documentary requirements and conditions for a registered person claiming input tax credit (ITC).A division bench of Chief Justice Vijay Bishnoi and Justice N. Unni Krishnan Nair observed that the provision was enacted based on powers derived from Section 16 of the CGST Act and the general rule-making powers under...

[CGST ACT] Dept Can't Seize Goods If Quantity Or Weight Of Goods Is Found Correct On Physical Verification: Calcutta High Court

The Calcutta High Court stated that GST department cannot seize the goods if the quantity or weight of the goods is found correct on physical verification. The Division Bench of Chief Justice T.S Sivagnanam and Justice Hiranmay Bhattacharyya noted that the quantity or the weight of the goods, which were carried in the vehicle, has been found to be correct by the department on physical verification and there is no discrepancy. The bench further stated that “the inspecting authority...

Supply Of Holographic Stickers By Prohibition & Excise Dept For Affixing On Alcohol Bottles Is Supply Of “Goods”, Not Taxable: Madras High Court

The Madras High Court has recently observed that the supply of holographic stickers or excise labels by the Prohibition and Excise Department which is to be affixed on manufactured and bottles alcoholic liquor is a supply of “goods” simplicitor and not a supply of “service”. The court thus ruled that such supply of holographic stickers would not be taxable under the GST enactments. Justice C Saravanan noted that the holographic sticker was a label and therefore a good within the ...

Article 226 Can't Be Invoked Against An SCN Issued U/S 74 Of CGST Act At Preliminary Stage: Kerala High Court

The Kerala High Court stated that Article 226 cannot be invoked against a show cause notice issued under Section 74 of the CGST Act at preliminary stage. “Article 226 of the Constitution of India is not meant to be used to break the resistance of the Revenue in this fashion. In exercise of such jurisdiction, the High Court is required to refrain from issuing directions to the authorities under the taxation statute to decide issues in stages or on a preliminary basis,” stated the...

Cash Seized From Assessee Cannot Be Retained By GST Dept Or IT Dept Prior To Finalisation Of Proceedings: Kerala High Court

The Kerala High Court stated that illegal cash seizure by GST Department and handing over to Income Tax Department is illegal under Section 132A of the Income Tax Act. The Division Bench of Justices A.K. Jyasankaran Nambiar and Easwaran S. held that “Cash amount seized from the premises of the assessee cannot be retained either by the GST Department of the State or the Income Tax Department prior to a finalisation of respective proceedings initiated by them,” In this case, the...

Delay Of Two Days In Issuing GST Notice Can't Be Condoned: Andhra Pradesh High Court

The Andhra Pradesh High Court stated that delay of two days in issuing the GST notice cannot be condoned. The Division Bench of Justices R. Raghunandan Rao and Harinath N. observed that “the time permit set out under 73(2) of the Act is mandatory and any violation of that time period cannot be condoned, and would render the show cause notice otiose.” In this case, the assessee/petitioner received a show cause notice, dated 30.11.2024, in relation to the assessment year 2020-2021...

GST Registration Cannot Be Refused Merely Because Assessee Belongs To Another State: Andhra Pradesh High Court

The Andhra Pradesh High Court stated that GST registration can't be refused merely because the assessee belongs to another State. “Though the apprehension of the respondents may not be misplaced, it would not mean that registration can be refused on a ground, which is not available under the Statute or the Rules. There do not appear to be any restriction for persons outside the State to come into the State of Andhra Pradesh and seek registration under the APGST Act,” stated the...

Short Tax | Timeline For Issuing Show Cause Notice U/S 73(2) Is Mandatory, Not Discretionary: Andhra Pradesh High Court

The Andhra Pradesh High Court has held that the time permit set out under 73(2) of the AP GST Act for issuance of show cause notice in relation to alleged short payment of tax, etc. is mandatory in nature.A division bench of Justices R Raghunandan Rao and Harinath N. added that any violation of that time period cannot be condoned and would render the show cause notice otiose.It observed, “The GST Act, has put in place certain protections for tax payers. One of the primary protections is that...

GST Registration And Payment Of Tax After Inspection Is Not Voluntary Conduct: Madras High Court

The Madras High Court stated that GST registration and payment of tax after inspection is not a voluntary conduct.The Bench of Justice K. Kumaresh Babu observed that “there is a deliberate attempt to evade payment of tax by not registering himself under the Act and also issuing receipts as donation to the Trust. Only after the inspection they have agreed to pay the tax by registering themselves. This conduct cannot be said to be a voluntary conduct.”In this case, the assessee/petitioner is the...