Proceedings can’t be initiated under Section 74 when tax liability is already discharged along with interest

Judgements

Proceedings can’t be initiated under Section 74 when tax liability is already discharged along with interest

The petitioner is engaged in the business of generation of electricity through solar plants. The GST returns filed by the petitioner for the period of July, 2017 to March, 2019 were subject to audit. The petitioner was informed about tax liability during audit proceedings on account of wrong availment of ITC and ITC availed with respect to exempted supply. Upon receipt of initial audit observation, the petitioner discharged the entire tax liability alongwith interest. The final audit report was issued much after payment of GST liability. Post audit, the respondent issued show cause notice to the petitioner under Section 74 of CGST Act and confirmed the demand through DRC-07. The petitioner contended that it falls under purview of Section 73(1) and 73(5) of CGST Act and therefore, SCN under section 74 is not sustainable. Whereas, the respondent contended that this is the case of fraud and willful misstatement.

23/04/2024

Streamlining filing of appeal by Department before ITAT, High Court and Supreme Court| Circular No. 5/2024 dated 15th March, 2024

Judgements

Streamlining filing of appeal by Department before ITAT, High Court and Supreme Court| Circular No. 5/2024 dated 15th March, 2024

Appeal against order of any authority can be filed by the party aggrieved by the order, i.e., the Assessee or the Department. Filing of appeal involves lots of cost and effort and also takes up the time of the judicial authority. Assessee files appeal after considering various factors such as amount of pre-deposit required, amount involved in dispute, time factor etc. However, for department appeal the CBDT specifies a monetary limit, i.e., upto specified monetary limit, no appeal shall be filed by the department.

09/04/2024

Cross-empowerment is without jurisdiction in absence of any notification under GST Law

Judgements

Cross-empowerment is without jurisdiction in absence of any notification under GST Law

The Writ petition was filed to challenge the proceedings initiated against the taxpayer by the central authorities where the taxpayer is assigned to the State authorities and vice versa. The Petitioner contended that power of cross-empowerment was given under Model GST Law. However, GST Law enacted is different from the Model GST Law.

09/04/2024

Demand order in Form GST DRC-07 is not sustainable when order is issued in Form GST ASMT-12

Judgements

Demand order in Form GST DRC-07 is not sustainable when order is issued in Form GST ASMT-12

Since commencement of Assessments under GST, there are many practical issues which are being faced by the Assessee. One of the common issues is issuance of GST ASMT-10 and DRC-01 for the same matter. There are many instances wherein a proper officer issues the GST ASMT-10 and assessee obtains the GST ASMT-12 by filing proper reply. GST authority still issues show cause notice in Form GST DRC-01 and in some cases issues the demand order as well. In this matter, a major relief is granted by Hon’ble High Court of Madra in the matter of Radiant Cash Management Services Ltd., Vs. The Assistant Commissioner (ST) (W.P.No .2981 of 2024 and W.M.P.Nos.3246 & 3247 of 2024).

26/03/2024

GST Authorities can’t transgress the boundaries of the Show Cause Notice

Judgements

GST Authorities can’t transgress the boundaries of the Show Cause Notice

The Petitioner received an order for imposition of penalty. Show Cause notice was issued on the ground that the vehicle was traveling to a destination not mentioned in the invoice. However, while issuing the order, the appellate authority has imposed a penalty on a different ground.Hon’ble High Court held that “Show Cause Notice” serves as a vital checkpoint which defines the boundaries within which any authority can operate. Show cause notice is an initial document which impose allegations or discrepancies on the taxpayer and provide an opportunity to the taxpayer to present their side of the story. Any action beyond the scope defined in SCN not only undermines the legitimacy of the authority but also compromises the rights of the individuals or entities involved.

12/03/2024

GST registration can’t be cancelled with retrospective effect mechanically| GST Officer must provide reason for such action

Judgements

GST registration can’t be cancelled with retrospective effect mechanically| GST Officer must provide reason for such action

These days, Taxpayers are genuinely facing issues in Input Tax credit due to back date cancellation of GST registrations of the suppliers. For FY 2017-18 and 2018-19, show cause notices were issued to various Assessee to disallow ITC on ground of cancellation of GST registration with retrospective effect. In most of such cases, GSTIN was cancelled due to non-filing of GST return for continuous period of six months. To resolve this issue, Hon’ble High Court of Delhi has passed a judgment to grant relief to taxpayers in the matter of ARYAN TIMBER STORE KUMAR SALES TAX OFFICER CLASS II/ AVATO WARD 62 DEPARTMENT OF TRADE AND TAXES IP ESTATE NEW DELHI (WP 628/2024 dated 18th January, 2024)

05/03/2024

Deduction made by the applicant from employees for canteen services is not supply and ITC will be available for obligatory canteen services

Judgements

Deduction made by the applicant from employees for canteen services is not supply and ITC will be available for obligatory canteen services

The Kohler India Corporation Private Limited (“The Applicant ”) was mandatorily required to provide a canteen facility to the workers. The Applicant entered into a contract with Canteen service provider wherein invoice is raised by the CSP in the name of the applicant. Cost of CSP is borne by the applicant partially and the balance amount is recovered from the employees by way of deduction from salary. The amount is collected by the applicant from the employees without any commercial objective, i.e., without any profit markups. The question before Hon’ble AAR is Whether the subsidized deduction made by the applicant from the employees would be considered as ‘supply’ under CGST Act. Further, whether the applicant is entitled to claim ITC on invoice raised by the CSP.

07/02/2024

Judgements

Assessment order under GST can’t be passed against a deceased person

The petitioners are the legal heir of Mr. M K Grish, who was running a business under name of M/s M. K. M. & Sons. However, Mr. M K Grish passed away on 25th Feb, 2021 and same are intimated to the respondent by way of online application.

22/01/2024

CBIC (Central Board of Indirect Taxes and Customs)

Judgements

CBIC issued instruction on issuance of Show Cause Notice on employee Secondment pursuant to NOS Judgment

The Department has showered the Industries with Show Cause Notices, issued in Form DRC-01, as the last date of issuance of SCN was 30th September, 2023 for FY 2017-18 and 31st December, 2023 for FY 2018-19. One of the major grounds on which thousands of MNCs were served with Show Cause Notice was the taxability of Secondment of employees in Indian Company by Foreign Holding Company.

09/01/2024

Judgements

ITC can’t be denied to the Recipient if no recovery effort were made from the supplier, Supreme Court dismissed the Department’s SLP

A demand order was served on the Appellant on account of reversal of ITC due to difference in ITC appearing in GSTR-2A and GSTR-3B. The Appellant was available with all tax invoices and payment is also made to the supplier for the value of supply along with taxes. Department denied the ITC on the mere ground that the same is not appearing in GSTR-2A.

19/12/2023

Archives

Proceedings can’t be initiated under Section 74 when tax liability is already discharged along with interest

Streamlining filing of appeal by Department before ITAT, High Court and Supreme Court| Circular No. 5/2024 dated 15th March, 2024

Cross-empowerment is without jurisdiction in absence of any notification under GST Law

Demand order in Form GST DRC-07 is not sustainable when order is issued in Form GST ASMT-12

GST Authorities can’t transgress the boundaries of the Show Cause Notice

GST registration can’t be cancelled with retrospective effect mechanically| GST Officer must provide reason for such action

Deduction made by the applicant from employees for canteen services is not supply and ITC will be available for obligatory canteen services

Assessment order under GST can’t be passed against a deceased person

CBIC issued instruction on issuance of Show Cause Notice on employee Secondment pursuant to NOS Judgment

ITC can’t be denied to the Recipient if no recovery effort were made from the supplier, Supreme Court dismissed the Department’s SLP

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