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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 No 229 on maintainability of writ in case where alternate remedy is available

GST Update No 229 on maintainability of writ in case where alternate remedy is available
It is observed that the cases of cancellation of GST registration for not filing GST returns for continuous period of 6 months have increased manifold but getting the same registration restored appears to be a herculean task by the assessee.  The emergence of pandemic situation had worsened the situation as many assessees could not file their GST returns due to financial crisis. Recently, one case was reported before Uttarakhand High Court in the case of VINOD KUMAR V/S COMMISSIONER UTTARAKHAND [SPECIAL APPEAL NO. 123 OF 2022] wherein the assessee could not prefer appeal against the order of cancellation of their GST registration within the stipulated time limit due to which their GST registration was not being restored. Consequently, writ petition was preferred which was contested on the grounds of availability of alternate remedy. The decision imparted in this case is subject matter of discussion of our present update.
 
The petitioner is a working mason/painting professional and was allotted GST registration. However, he failed to file his return for a continuous period of 6 months and consequently, his registration was cancelled on 21.09.2019. Further, appeal preferred was also dismissed as being time barred and hence, this writ petition is filed. The benefit of suo moto extension order passed by the Supreme Court was not given to the petitioner by the Single judge on the grounds that the limitation period expired much prior to the outbreak of pandemic situation in the country. Thereafter, the Counsel of petitioner approached double bench and submitted that it is up to High Court’s discretion to entertain a petition even if alternate course of remedy is available with the assessee. Reliance in this respect was placed on the decision of Apex Court in the case of WHIRLPOOL CORPORATION V/S REGULAR OF TRADE MARKS wherein it was delivered that High Court can entertain an appeal if it results into violation of fundamental rights of the taxpayer, or when vires of an Act is challenged, or where there has been violation of the principles of natural justice or where proceedings are wholly without jurisdiction. It was contended that since cancellation of GST registration in the present case adversely effects the livelihood of the petitioner, merely because there was failure to file appeal within stipulated time period would render the petitioner remediless which is against the Article 21 of the Constitution of India. Reference was further drawn to decision of Gujarat High Court in the case of M/S PANOLI INTERMEDIATE (INDIA) PVT. LTD. V/S UNION OF INDIA AND OTHERS.
 
The respondent was of view that since alternate remedy is available, present petition should not be entertained.
 
The Court held that notice which was given to petitioner in this respect on common portal should be delivered personally as well before cancellation of registration. Further, it was stated that the legislature does not provide an unlimited jurisdiction on first appellate authority which consequently, results into hardships for the taxpayers since no remedy is left. Looking into the present scenario, if the GST registration is cancelled, it will result into denial of right to livelihood which consequently results into violation of Article 21 of the Constitution of India. Taking into account all these circumstances, it was held that the present writ stands maintainable. Further, it was also held that the petitioner could not have filed appeal under section 107 of the CGST Act, 2017 as the appeal can be filed only against the order passed by the adjudicating authority. Hence, the question as to whether the Assistant Commissioner is Adjudicating Authority or not was also answered. After placing reliance on decision of Apex Court in the case of RADHA KRISHNA INDUSTRIES V/S STATE OF HIMACHAL PRADESH AND OTHERS and quoting the provisions of Section 107 of UGST Act, 2017, it was stated that the commissioner is not an adjudicating authority and so the Assistant Commissioner is also not to be treated as adjudicating authority in case of cancellation of GST registration. Hence, no appeal lies against the orders passed by him under Section 107 of CGST Act, 2017. Therefore, the matter was remanded back to learned Single Judge for consideration on merits holding that writ petition is maintainable.
 
The above decision is a remarkable one as it seeks to provide the benefit of considering the issue regarding restoration of GST registration pursuant to cancellation order for which the time period for filing appeal was expired with no possibility of extension even by applying the suo moto extension order of the Apex Court. The benefit of considering the case on merits was granted by exercising the discretionary power of the High Court due to the fact that there was violation of the fundamental right of the petitioner to earn livelihood on account of cancellation of GST registration under Article 21 of the Constitution of India. This decision will be of help to many similar assessees who could not get their registration restored due to not taking any action within the stipulated time period.
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