GST Act | Three-Month Limit U/S 73(2) For Department To Issue SCN Is Mandatory, 'Technical Glitch' No Excuse: Delhi High Court

The Delhi High Court has held that the time limit set out under 73(2) of the Goods and Services Tax Act for issuance of show cause notice in relation to alleged short payment of tax, etc. is mandatory in nature, and cannot be excused on account of technical glitches on GST portal.A division bench of Justices Prathiba M. Singh and Shail Jain thus quashed a SCN issued after the 3-month gap prescribed under the provision.For context, Section 73(2) of the GST Act stipulates that show cause notice...

Customs Act | Delhi High Court Allows BSNL To Belatedly Challenge ₹12.63 Crore Penalty For Misdeclaration Of Goods

The Delhi High Court has allowed BSNL (Bharat Sanchar Nigam Limited) to belatedly challenge the Rs. 12,63,01,812/- imposed upon it by the Customs Department for misdeclaration of imported goods.A division bench of Justices Prathiba M. Singh and Shail Jain noted that the public autonomous service provider showed no valid justification for the delay in approaching CESTAT however, “considering the fact that there was a voluntary declaration by B.S.N.L., prima facie there appears to be some merit in...

Oppo Eligible For Customs Duty Exemption On Microphones & Receivers Used In PCBA Prior To 06.07.2019: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that Oppo Mobiles is eligible for customs exemption on microphones & receivers used in PCBA (Printed Circuit Board Assembly) prior to 06.07.2019. Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) opined that by virtue of the amendment Notification dated 06.07.2019, customs duty would also be leviable on microphones and receivers when imported into India, even if they...

Samples Sent For R&D/Testing Are Not Finished Goods, And Their Movement To Lab Is Not Clandestine Clearance: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that samples sent for research and development (R&D) and quality testing are not finished goods, and their dispatch to a laboratory cannot be treated as clandestine removal. Justice Dilip Gupta (President) and P. Anjani Kumar (Technical Member) stated that the assessee cleared samples for testing purposes to its in-house facility at Surat in the State of Gujarat and had not cleared ...

Must Consider Burden On State Exchequer & Balance It Against Interest Of Party In ITC Fraud Cases: Delhi High Court

The Delhi High Court has held that the Courts must, while dealing with cases involving fraudulent availment of Input Tax Credit, balance the interest of trader with that of burden on State exchequer due to tax evasion.A division bench of Justices Prathiba M. Singh and Shail Jain observed,“in cases involving fraudulent availment of ITC…there are complex transactions involved which require factual analysis and consideration of voluminous evidence, as also the detailed orders passed after...

Entire Leased Land Treated As Industrial Construction: Gujarat AAR Blocks ITC On Rent, Repairs & Vacant Portion For Tata-Subsidiary

The Gujarat Authority for Advance Ruling (AAR) has disallowed Input Tax Credit (ITC) of Goods and Services Tax (GST) paid on lease rental on all three counts viz. for constructing factory building on leased land as well as vacant portion of land and on repairs, maintenance and renovation of factory building. The bench of Mr. Vishal Malani (Member- Central Tax) and MS. Sushma Vora (Member- State Tax) has ruled on ITC eligibility of GST paid on lease rental by dismissing the view of...

DGFT Issues Guidelines On Refunds & ITC For Exports Affected By Erstwhile CGST Rule 96(10)

Directorate General of Foreign Trade (DGFT) has issued a policy circular regarding refund claim or Input Tax Credit by affected exporters, where eligible as well as on redemption of Advance Authorisations impacted by the erstwhile Rule 96(10) of the CGST Rules, 2017. Rule 96(10) provided that a person cannot claim refund of Integrated Goods and Services Tax (IGST) paid on export of goods or services if exporter had availed benefit of specified exemption notifications under certain...

Bharat Aluminium Entitled To CENVAT Credit On Mining Services Used For Bauxite Extraction: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that Bharat Aluminium is entitled to CENVAT (Central Value Added Tax) Credit on mining services used for bauxite extraction. Dilip Gupta (President) and P. Anjani Kumar (Technical Member) agreed with the Principal Commissioner that since mining services were used for the extraction of bauxite from the mines owned by BALCO, and this bauxite was sent to Vendanta for conversion into alumina,...

Profit Sharing Agreement Between Mall And Parking Operator Not Lease, Not Subject To Tax: CESTAT Chennai

The Customs Excise and Service Tax Appellate Tribunal at Chennai on Friday held that a profit-sharing arrangement for managing a mall's parking facility does not amount to leasing of space and therefore is not liable to service tax. The appeal was against an order of Commissioner of Service Tax that had upheld a service tax demand of over Rs 20 lakh, treating the parking arrangement between CCCHPL and SPIPL as leasing of space and therefore taxable. A coram comprising Judicial Member Ajayan T...

DRC-03 Payments Made During GST Search Not Voluntary; Refund Cannot Be Rejected Through Deficiency Memos: Karnataka High Court

The Karnataka High Court holds that payments made by assessee through Form GST DRC-03 at the time of search or pursuant to an investigation cannot be treated as 'voluntary payments' when amount was not determined through any formal assessment or adjudication. A Bench comprising of Justice M. Nagaprasanna, quashed deficiency memos issued by the Deputy Commissioner of Central Tax (Revenue) on two different dates rejecting refund sought by assessee. On this score, it was observed that...

Income Tax Act | Interest On Loan Advanced To Company Not Deductible Against Salary Income: Karnataka High Court

The Karnataka High Court has held that a loan raised by mortgaging property and advancing to a company does not constitute business expenditure, and the interest is not deductible against salary income. The bench opined that unless expenditure is incurred in the course of the business or professional service, the assessee is not entitled to a deduction, merely due to it being incurred on the amount borrowed and advanced to the company. Justices D K Singh and Rajesh Rai K stated that...

No Technical Flaw If GST Orders Lack Visible Signatures; Digital Key Authentication Sufficient: Delhi High Court

The Central Goods and Services Tax Department recently explained to the Delhi High Court the process its officers follow when uploading any show cause notice or order on the GST portal. The explanation was tendered in response to a plea filed before the Court, challenging the legality of a demand order on the ground that the impugned SCN and the impugned order were not duly signed either physically or digitally.The Department now uses digital keys to upload orders on the GST Portal, and without...