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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 278 on detention for expiry of E-way bill by few hours

GST Update No 278 on detention for expiry of E-way bill by few hours
The highest cases are being reported with respect to detention and seizure of goods during their transportation on account of discrepancies found in e-way bill. There had been various Judicial Rulings wherein the High Courts have delivered that delay in delivery after expiry of e-way bill would not result into detention or imposition of penalty unless there is intention to evade tax. Further, the Apex Court in the case of ASSISTANT COMMISSIONER (ST) & ORS. V/S SATYAM SHIVAM PAPERS LIMITED held that no penalty can be levied for delay in the transportation of goods due to bottleneck of traffic. Recently, on similar lines, case was reported before Madhya Pradesh High Court in the case of M/s DAYA SHANKAR SINGH AND STATE OF MADHYA PRADESH. The decision imparted in this case is subject matter of discussion of our present update.
The petitioner is registered Government Contractor and had received work order from Divisional Project Engineer of Public Works Department for construction of additional laboratory and classroom at the Dindori college. The quotation was received from Mittal Steels for supply of TMT bars and hence, order was placed to them in Raipur. Mittal steels generated E-way bill for movement of goods from Raipur to Dindori. However, the vehicle subsequently suffered the problem and the clutch-plates of vehicle got damaged. The proprietor of “Maa Rewa Transport” sent vehicle for servicing to “Rama Moto Cooperation” Raipur on 18.05.2022. As on 19.05.2022, the vehicle got repaired and tax invoice was also raised for changing parts. Thereafter, the vehicle started its movement after getting gate pass. The vehicle reached at destination on 19.05.2022 between 10:30 to 10:45 pm and upon reaching the petitioner directed the driver to take the vehicle to weigh bridge. The Assistant Commissioner at 04:35 am as on 20.05.2022 stopped the truck and demanded all the relevant documents which were duly furnished by the driver.
CA. PRADEEP JAIN
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However, the authority objected the E-way bill stating that it got expired as on 19.05.2022 at 12:00 am. Hence, GST MOV-02 was issued to the petitioner stating that e-way bill is expired and the vehicle was detained.
The petitioner requested that material detained should be supplied to him since the same were necessary for construction of classroom and laboratory. The written submissions of petitioner were not accepted and hence, MOV-06 and 07 were also issued specifying the penalty demanded. The Counsel of petitioner submitted that the proceedings under Section 129 are not justifiable and principles of natural justice were not followed. Further, no penalty should be imposed for “minor breaches” or procedural lapses. Also, the petitioner is not guilty of any fraudulent or gross negligence, hence, penalty imposed is totally unwarranted. It was argued that the respondent failed to see that there was no revenue loss. The intention of E-Way bill mechanism was to keep a check on movement of goods without tax invoice and to regulate tax evasion and the act of respondent however runs contrary to the scheme of mechanism. Reliance was placed on decision of Telangana High Court in the case of Satyam Shivam Papers Pvt. Ltd. V/s Asst. Commissioner, ST & Others, Calcutta High Court in the case of Ashok Kumar Sureka V/s Asst. Commissioner, State Tax, Durgapur Range, Divisional Bench in the case of Robbins Tunnelling & Trenchless Technology (India) Pvt. Ltd. V/s State of Madhya Pradesh & Others. Further reference was made to Circular No. 64/38/2018-GST dated 14.09.2018.
The Counsel of department argued that the order and notice issued in the present case contains no discrepancy or deficiency and the action taken is in accordance with the provisions of the Act.
The Court held that the submissions of appellant as regards to violation of principle of natural justice and gross negligence were not rebutted by the respondent. Reference was made to decisions on which the petitioner placed reliance. Hence, it was concluded that there is gross negligence on the part of revenue department since there is no tax evasion. It was bonafide mistake only and hence, no penalty should be imposed. It was directed to refund the amount of penalty paid within 30 days failing which interest at the rate of 6% is
CA. PRADEEP JAIN
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payable to the petitioner by the department.
The above decision is yet another example in support of the fact that harsh and vindictive penalties should not be levied in case of technical breaches and lapses. Reference can be drawn to various decisions such as R.K. Motors V/s State Officers, M.R. Traders V/s Assistant State Tax Officer, Godrej Consumer Products Ltd. v/s ACST & E-Cum etc. It is high time that these settled Judicial Pronouncements should be followed by the departmental authorities before initiating any action against the taxpayers in order to avoid the unnecessary litigations.
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