Calcutta High Court Treats Polypropylene Sacks As Plastic, Not Textile Products In GST Dispute

The Calcutta High Court has held that polypropylene leno bags manufactured by Mega Flex Plastics Limited should be treated as plastic sacks, not textile products, for GST purposes. A Division Bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi observed that the company's bags were commonly known in the market as “plastic sacks” and not textile sacks. The court held, “The sacks manufactured by the appellant are commonly known in the market as plastic sacks. They are not...

Gujarat High Court Says GST Arrest Valid Though Verbatim Signed 'Reasons To Believe' Copy Was Not Supplied

The Gujarat High Court has upheld the arrest of a person accused in a fake Input Tax Credit (ITC) racket, holding that while an arrestee must be furnished the “reasons to believe” forming the basis of arrest to enable a legal challenge, failure to provide a verbatim signed copy of the Commissioner's internal note does not vitiate the arrest. "Therefore, this Court, is of the opinion that the 'reasons to believe' recorded by the Commissioner has been furnished to the petitioner, facilitating him...

Rajasthan High Court Stays Parallel GST Proceedings, Says Only One Officer Can Initiate Action on Same Matter

The Rajasthan High Court has stayed parallel GST proceedings and recovery action against a Jaipur-based exporter after finding prima facie that tax authorities may have initiated duplicate proceedings for the same financial year. A division bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Bipin Gupta issued notice to the department and observed that under the GST law, only one proper officer can initiate proceedings on the same subject matter. “Considering the provisions of...

GST Audit Completion Does Not Bar Further Tax Proceedings for Unpaid Tax: J&K and Ladakh High Court

The High Court of Jammu & Kashmir and Ladakh has recently held that completion of a GST audit does not prevent tax authorities from initiating further proceedings for unpaid or short-paid tax.Referring to section 65(7) of the CGST Act, the court observed, “A plain reading thereof makes it abundantly clear that where an audit conducted under sub-section (1) of Section 65 results in detection of tax not paid, short paid, erroneously refunded, or input tax credit wrongly availed or utilized,...

Patna High Court Refuses To Quash Central Excise Show Cause Notices Against ITC Despite Delay In Adjudication

The Patna High Court has recently refused to quash multiple Central Excise show cause notices issued to ITC Limited, holding that the company could not seek quashing solely on the ground of delayed adjudication when it had not participated in hearings despite repeated opportunities. “For one reason or another, the petitioner did not participate in the hearing. In such circumstances, prima facie, we agree with the submissions of the learned counsel for the Central Excise that the delay in the...

ITC Claims Filed Before 30 November 2021 Cannot Be Rejected on Limitation Ground: Karnataka High Court

The Karnataka High Court has held that Input Tax Credit (ITC) claims rejected as time-barred under Section 16(4) of the Central Goods and Services Tax Act, 2017 must be reconsidered where GST returns for the relevant financial years were filed on or before 30 November 2021, in view of the retrospective insertion of Section 16(5) of the CGST Act. A Single Judge Bench of Justice S. Sunil Dutt Yadav allowed the writ petition filed by ABE Security Mechanics Private Limited, set aside the show cause...

Bombay High Court Quashes ₹10.25 Crore GST Demand Against Capital First Post-Merger With IDFC First Bank

The Bombay High Court has quashed a ₹10.25 crore GST demand raised against Capital First Limited post its merger with IDFC First Bank. It held that proceedings initiated against a company that had ceased to exist due to amalgamation are void ab initio and unsustainable in law.A Division Bench of Justice G.S. Kulkarni and Justice Aarti Sathe observed that despite repeated intimations about the merger, the department continued proceedings against the non-existent entity. Relying on the Supreme...

Bombay High Court Quashes GST Action Over Infra Company's Corporate Guarantees Issued Without Consideration

The Bombay High Court has held that D.P. Jain & Co. Infrastructure Pvt. Ltd. cannot be subjected to GST for corporate guarantees it issued to State Bank of India and Bank of Maharashtra to secure loans granted to its group companies, as the company received no consideration for furnishing those guarantees. A Division Bench of Justice Urmila Joshi-Phalke and Justice Nivedita P. Mehta observed: “There was no flow of consideration for the rendering of services. Therefore, taxability does not...

Education Consultancy Services To Foreign Universities Not 'Intermediary Services' Under GST: Delhi High Court

The Delhi High Court on Friday reiterated that education consultancy, marketing, and recruitment support services rendered by an Indian entity to foreign universities would not qualify as “intermediary services” under the Integrated Goods and Services Tax Act and would instead constitute export of services eligible for GST refund.A division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul passed the ruling while allowing a writ petition filed by Fateh Education Consulting Private Limited,...

GST Law Does Not Bar More Than One Refund Application, Especially In Case Of Inadvertent Lapse: Bombay HC

The Bombay High Court has recently held that a GST refund claim cannot be rejected merely because the taxpayer had earlier filed another refund application for a broader tax period, where the later claim was filed within the limitation period and there is no statutory bar against such a claim. Referring to Section 54(1) of the Central Goods and Services Tax Act, which governs refund claims, the Court said: “Section 54 does not provide any bar for a party to maintain more than one application,...

Bombay High Court Quashes Post-Merger GST Demand Against Vodafone Mobile Services

The Bombay High Court has recently held that GST proceedings initiated against Vodafone Mobile Services Ltd. after it ceased to exist due to its merger with Idea Cellular Ltd. and Vodafone India Ltd. were void ab initio. The court set aside the adjudication order and held that the show cause notice itself was issued without jurisdiction. A Division Bench of Justice G. S. Kulkarni and Justice Aarti Sathe observed that, “the show-cause notice itself having been issued without jurisdiction, the...

Bombay High Court Issues LOC, Non-Bailable Warrant Against Elitecon Director In DGGI Contempt Case

The Bombay High Court has recently directed issuance of a lookout circular and a non-bailable warrant against Elitecon International Ltd. director Vipin Sharma. The court acted after Sharma failed to remain physically present before it despite an undertaking given through his counsel in contempt proceedings arising from an alleged breach of an assurance to appear before Directorate General of GST Intelligence (DGGI) officers whenever summoned. The court said Sharma had been in “continuous...