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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 290 on no difference between working day and holiday in matters related to detention

GST update No 290 on no difference between working day and holiday in matters related to detention

Looking at the present scenario, the issue regarding rampant and continuous detention of goods is a matter of grave concern for the taxpayers. Apart from facing financial burdens such as penalties, delay in working of businesses due to detention of order is not less than a nightmare for the taxpayers. However, with the passage of time, various High Courts have come forward and stepped into the issue to grant relief to the taxpayers, yet serious repercussions are being faced by the business houses. On similar lines, one case was recently reported before Madras High Court in the case of M/S D.K. ENTERPRISES V/S THE ASSISTANT/ DEPUTY COMMISSIONER. The decision imparted in this case is subject matter of discussion of our present update.The petitioner sought a mandamus directing to release goods detained on 13.08.2022 by Roving Squad of Commercial Tax Department. The consignment was intercepted on 13.08.2022 at 12:15 am and thereafter GST MOV-01 was also issued on the same day. Subsequently, GST MOV-02 was also issued. The goods were intercepted on the basis of presumption of officer that they were unloaded at an unregistered place. No details in this respect were provided further. It was argued that on 13.08.2022, MOV-04 was issued after which there had been no notice issued by the respondent till 24.08.2022. However, the same should have been issued within 7 days from date of detention/ seizure. The notice ostensibly issued dated 22.08.2022 was produced during the course of hearing. The petitioner argued that proper procedure regarding detention of goods was not complied with since the same is in contrary to the provisions contained in the Statue and Regulations. Further, representation was made requesting the conveyance to proceed on its way and setting out an explanation for alleged discrepancy. It was submitted that there is violation of provisions of Section 129 of CGST Act, 2017. The Counsel for the respondent placed reliance on Circular No. 41/15/2018-GST dated 13.04.2018 issued by CBIC. Further it was argued that there is no statutory prescription for any forms that are referred in Section 129. It was further argued that the procedure was within time since the limitation of 7 days expires on a holiday, 19.08.2022 being Janmashtami and 20.08.2022 and 21.08.2022 being weekends on which GST department do not function. Therefore, notice has not been issued on 22.08.2022 but on 24.08.2022. The counsel relied on the Section 10 of General Clauses Act, 1897, as per which the proceedings shall be deemed to be completed if it done or taken on the next day afterwards when the Court or office were open after a holiday. The Court was of the view that the procedure mentioned in the Circular is applicable to the sequence of events arising in the present case. It was concluded that there are serious flaws in the procedure since neither the detention order nor the SCN was issued within time. As per the provisions of Section 129, it is apparent that the detention order is to be issued prior to issuance of SCN. It was further stated that the officer not having obtained written permission from superiors for extension of time for proceedings, not adhered to the requirement for uploading of Part-B of Form GST EWB-03. It was further held that in matter of detention and seizure, GST department does not recognise the concept of ‘working day’ and ‘holiday’ since there was amendment vide Circular No.49/23/2018-GST dated 21.06.2018 in F.No. CBEC/20/16/03/2017-GST. Moreover, the department officers themselves agrees that the roving squad of the GST Department knows no distinction between working and non-working days and the wing works 24/7 through-out the year. Therefore, both the parties cannot have luxury of delaying the proceedings. Therefore, the act of the departmental officers runs directly contrary to the amendment under the Circular dated 21.06.2018. Thus, it is imperative that such intrusive acts are required to be followed strictly as per statutory provisions. Since the detention is a pre-condition for issuance of SCN, the order is to be issued within 7th day from date of detention of conveyance being 13.08.2022. As the same is issued on 22.08.2022, it is a serious lacuna.It was further stated that there is no requirement of referring to the provisions of Section 10 of General Clauses Act, since the department itself created a difference between working day and holiday. Further difference was drawn towards MOV-06 and directing the vehicle not to move till further orders. It was therefore, concluded that the matter is contrary to the statue’s requirement and the submissions of department are rejected.The above decision is a welcoming decision favouring the business houses pointing out the gross negligence of the tax officials while initiating any action of detention under section 129 of the CGST Act, 2017. There had been situations in past as well wherein the departmental officers invoked draconian powers like these on inadvertent grounds. It is high time now, that these settled judicial precedents should be followed by them in proper and legal manner failing which will lead to unwanted litigations.

 

 

 

 

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