GST Authority Cannot Pass Fresh Ex-Parte Order After Ignoring Replies: Allahabad High Court

The Allahabad High Court has held that an adjudicating authority under the U.P. GST Act, 2017 must recall an order if it finds that it failed to consider the replies filed against the proceedings and hear the person afresh. It cannot consider those replies itself and pass a fresh ex-parte order on merits while exercising the rectification power under Section 161 of the Act. A Division Bench of Justices Saumitra Dayal Singh and Swarupama Chaturvedi set aside an order passed against Wonder...

Gujarat High Court Quashes GST Demand, Holds ITC Cannot Be Denied On Non-Taxable Transaction

The Gujarat High Court has held that tax authorities cannot deny input tax credit on a transaction that was not taxable in the first place.A bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati made the ruling while quashing a GST demand against Kor Chems over credit claimed on the acquisition of leasehold rights in a GIDC industrial plot. The court held that the ITC reversal and interest could not survive after finding that GST was not leviable on the transfer of the leasehold...

Jammu & Kashmir and Ladakh High Court Quashes GST Penalty Proceedings Over One-Day Delay In Notice

The High Court of Jammu & Kashmir and Ladakh has held that the seven-day timeline under Section 129(3) of the Central Goods and Services Tax Act, 2017 for issuing a notice after detention and seizure of goods is mandatory. The court set aside the orders in the case after finding that the notice was issued a day beyond the prescribed period.“There was a delay of one day in issuing the notice, which vitiates the entire proceedings,” a Division Bench of Acting Chief Justice Sanjeev Kumar and...

Delhi High Court Upholds Corrigendum Correcting GST Portal Order That Showed Proceedings Dropped

The Delhi High Court has upheld a corrigendum issued by a GST officer to correct an inadvertent error on the GST portal, where the portal-generated order showed that proceedings against a taxpayer had been dropped even though the accompanying adjudication order had confirmed a tax, interest and penalty demand.The Division Bench of Justices Anil Kshetarpal and Shail Jain held that the corrigendum merely corrected an inconsistent recital in the original order and did not create a fresh demand.The...

Gujarat High Court Admits Ford India Plea Against GST Demands Based On E-Way Bill Discrepancies

The Gujarat High Court on 3 September admitted connected writ petitions filed by Ford India Private Limited challenging show-cause notices and Orders-in-Original issued under Section 74 of the Central Goods and Services Tax Act, 2017, concerning alleged discrepancies between taxable values and e-way bill data. A Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati found that the adjudicating authority had expressed its inability to reconcile the voluminous data despite the material...

Delhi HC Quashes ₹76.72L CENVAT Refund Demand, Says Authority Could Not Rely On CESTAT-Set Aside Order

The Delhi High Court has quashed a ₹76.72 lakh CENVAT refund recovery demand against an engineering products manufacturer, holding that the adjudicating authority could not rely on an order after it had been set aside by the CESTAT.The Division Bench of Justices Anil Kshetarpal and Shail Jain observed that the Additional Commissioner, while confirming the demand, failed to take into account the CESTAT's subsequent order expressly upholding the petitioner's entitlement to refund of ₹76.72 lakh...

Rajasthan High Court Rejects Challenge To GST Provision Requiring Supplier Tax Payment For ITC

The Rajasthan High Court has upheld the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017, holding that actual payment of tax by the supplier is a valid condition for availing Input Tax Credit (ITC). A Division Bench of Justices Arun Monga and Ashutosh Kumar dismissed Sumetco Alloys Private Limited's challenge to Section 16(2)(c) as well as its challenge to a Rs. 56.44 crore GST demand for the financial years 2020-21 to 2023-24. The judges observed: ...

Delhi High Court Directs Firm To Pursue Appeal Against GST Registration Cancellation Rejection, Refuses Writ

The Delhi High Court has refused to entertain a firm's writ petition challenging the rejection of its application for cancellation of GST registration. The authorities had alleged that the firm sought registration on the basis of documents whose authenticity could not be verified and had availed or passed Input Tax Credit (ITC) from non-existent firms.The Division Bench of Justices Anil Kshetarpal and Rajneesh Kumar Gupta observed that the dispute involved examination of the material and...

GST Authorities Cannot 'Ride Piggyback' On Adjudication Order For Income Tax Reassessment: Madras High Court

The Madras High Court has held that Income Tax authorities cannot rely solely on a GST adjudication order while conducting reassessment proceedings, cautioning that any reassessment must independently comply with the Income Tax Act.A single judge bench of Justice Senthilkumar Ramamoorthy, however, declined to interfere with the Section 148 notice issued to a granite and tiles business proprietor for AY 2023-24, as the proceedings were still at a preliminary stage.The court, however,...

GST Act | Scrutiny Of Returns Under S. 61 Not A Precondition For Show Cause Notice Under S. 74A: Allahabad High Court

The Allahabad High Court has held that scrutiny of returns under Section 61 of the Central Goods and Services Tax Act, 2017 read with Rule 99 of the CGST Rules, 2017, is not a mandatory step before the department issues a show cause notice under Section 74A of the Act. It held that where the notice rests on independent verification and not merely on discrepancies in the assessee's own returns, the department need not first call for the assessee's explanation under Section 61.The bench of Justice...

Gujarat High Court Quashes GST Demand Against Environmental Entity, Holds Effluent Treatment Exempt

The Gujarat High Court has held that an environmental protection entity qualified for a nil GST rate on activities falling within charitable activities involving preservation of the environment. The court also found no deliberate intention to evade tax and quashed the show-cause notice issued by the GST authorities.A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati allowed the petition filed by Naroda Enviro Projects Ltd. and its co-petitioner. The dispute concerned GST...

Karnataka High Court Holds GST Payments Made During Investigation Were Not Voluntary, Orders Refund

The Karnataka High Court has directed the GST authorities to refund ₹53.97 lakh collected from a taxpayer during an investigation, holding that the payments could not be treated as voluntary payments under the GST law.Justice C.M. Poonacha observed that there was no material to show that the taxpayer had voluntarily ascertained his tax liability before making the payments. The Court also noted that no prior demand or assessment had been made before the payments and that the authorities had not...