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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST UPDATE No. 108 ON RIGHT TO CROSS EXAMINE BEFORE SCN REPLY

GST UPDATE No. 108 ON RIGHT TO CROSS EXAMINE BEFORE SCN REPLY
It is a settled principle of law that assessee has the right to test the veracity of evidences used against him including the statements relied upon in the show cause notice. However, what is important is the time of exercising the said right by the assessee. The assessee has right to cross-examine the witness or persons whose statements are being used in the proceedings initiated against him. However, the question arises is whether the assessee can seek cross examination of the persons even prior to filing reply to the show cause notice issued to them. This issue was recently examined in detail by the hon’ble Bombay High Court in the case of PRAKASH RAGHUNATH AUTADE VERSUS THE UNION OF INDIA &B ANOTHER [WRIT PETITION NO. 5753 OF 2021]. The analysis of this decision is the subject matter of discussion of our present update. The petitioner contended that the right to cross examine should be provided beforehand and relied upon the decision given by the Hon’ble Punjab and Haryana High Court in the case of G-TECH INDUSTRIES VERSUS UNION OF INDIA reported as [2016 (339) E.L.T. 209 (P & H)] wherein the provisions of section 9D were analyzed and the request of cross examination was accepted. The counsel for the department submitted that the request for crossexamination of the witness was premature as the petitioner had not even filed reply to the show cause notice. It was held that the request for crossexamination of the witness would be examined after the petitioner files his reply, in the light of facts and circumstances of the case. Reliance was placed on the decision given by the hon’ble Allahabad High Court in the case of KANPUR CIGARETTES LTD. VERSUS UNION OF INDIA [2016 (344) E.L.T. 82 (ALL.)] and COMMISSIONER OF CENTRAL EXCISE, MEERUT-I VERSUS PARMARTH IRON PVT. LTD. [2010 (260) E.L.T. 514 (ALL.)]. The hon’ble Bombay High Court conceded with the view taken by Allahabad High Court as cited by revenue department wherein it was held that opportunity for cross examination can be given only after reply has been filed and the adjudicating authority seeks to place reliance on the statements as evidence. It was held that show cause notice is only a step in the process of adjudication and there is no adjudication at the stage of show cause notice. The show cause notice itself is not an order of assessment and so the assessee being entitled to cross examination, even before adjudication has commenced would not arise. It was held that the exercise of cross examination commences only after the proceedings for adjudication have commenced and not available before the reply to show cause notice has been filed. Therefore, petition was disposed of by directing the petitioner to file reply to the show cause notice and for adjudication of the case as per procedure prescribed in law after providing reasonable opportunity to cross examine witness if his statement is found as relevant and is relied upon during the course of adjudication. There are numerous favourable decisions rendered by the courts regarding allowing the assessee to cross examine the witnesses but it has been largely opined by various High Courts that this exercise of cross examination is available only after submission of reply and after adjudication of the show cause notice when the statements are considered as significantly relevant by the adjudicating authority. Similar view was taken by Hon’ble Gujarat High Court in the case of MULCHAND M. ZAVERI V/S UNION OF INDIA wherein it was held that stand of petitioner to allow cross examination before filing reply of Show Cause Notice, cannot be accepted. Thus, it is crystal clear that the assessee cannot demand his right of cross examination before replying to show cause notice. He can demand his right while replying to the said notice or after adjudication of the case because every statement recorded during the preliminary stage of investigation may not be found to be relevant for the purpose of adjudication of the case.
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