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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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GST UPDATE-6.01.2017 FIRST APPELLATE AUTHORITY

GST DAILY DOSE OF UPDATION
 
SECTION 98 APPEALS TO FIRST APPELLATE AUTHORITY:- The provisions relating to filing of appeal to first appellate authority are discussed in this update. The earlier GST Law provided separate provisions for filing appeal under CGST/SGST but these provisions have been consolidated for better reference. Also, the disparity among the provisions under CGST and SGST law has been removed in the revised GST Law.
 
Any person aggrieved by any decision or order passed against him can file appeal to the first appellate authority within three months from the date on which the said decision or order is communicated to such person. However, it is provided that if the appeal is filed by revenue authorities, the time limit for filing appeal is six months from the date on which decision or order is communicated for filing appeal. Furthermore, it is also provided that if the appeal has not been filed within prescribed period of three/six months, the first appellate authority may allow it to be presented within a further period of one month.  
 
The analysis of the above provisions reveals that the revised GST law seeks to provide a longer time period for filing appeal to the first appellate authority in case the appeal is filed by the revenue authorities. This will have adverse impact and will encourage careless attitude of revenue authorities to file appeal. Presently, there is same time limit for filing appeal and it should be continued in the proposed GST regime also so that there is equal time limit for challenging an order or decision either by assessee or by the revenue department.
 
The provisions regarding mandatory pre-deposit have also been drastically changed. According to therevised GST Law, the amount of tax, interest, fee and penalty accepted by assessee is to be paid in full and further an amount of 10% of the amount of tax in dispute is also to be paid as mandatory pre-deposit for filing appeal to first appellate authority. Not only this, departmental authorities will have right to apply to the First Appellate Authority for ordering a higher amount of pre-deposit not exceeding twenty five per cent of the amount of tax in dispute in case considered by the Commissioner of GST as a ‘serious case’. Moreover, explanation clarifies the meaning of ‘serious case’ as case involving a disputed tax liability of not less than Rs. 25 Crores. 
If we observe the mandatory pre-deposit provisions presently in force in Central Laws, we find that there is a ceiling of Rs. 10 Crores but no such ceiling is there in the revised GST Law. Moreover, discretionary power has been granted to departmental authorities for ordering higher pre-deposit in cases considered as ‘serious case’ by the Commissioner. This provision was expected to be deleted in the Revised GST Law but this has not been done which is great disappointment for assessees. The Revised GST Law has only reduced the extent of pre-deposit from 50% of the amount in dispute to 25% of the amount of tax in dispute. The basic purpose of introducing mandatory pre-deposit provisions was to reduce the burden of appellate authorities and reduce the wastage of time in deciding stay applications. However, incorporating discretionary power to order higher pre-deposit will again lead to increasing the burden of appellate tribunals in deciding the quantum of pre-deposit.
 
If the old GST Law is studied, it was found that the first appellate authority was empowered to pass such order as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. However, under the Revised GST Law,  it is specified that the first appellate authority shall pass such order as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the authority that passed the said decision or order. Hence, the first appellate authority will not have power to remand the case in GST regime.           
 
 

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