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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 314 NON-SPEAKING ORDER FOR REFUND

GST update No 314 NON-SPEAKING ORDER FOR REFUND
It is commonly observed that the orders passed against the taxpayers do not contain the detailed discussion as regards the reasoning adopted for reaching to the point of conclusion. This often leads to challenging the said order as non-speaking order before the Courts. Recently, a similar decision was reported before hon'ble Telangana High Court in the case of AREF ABDUL SATTAR TEXTILES PVT. LTD. VS DEPUTY COMMISSIONER STATE TAX [W.P. NO. 19179 OF 2022] wherein it was held that the refund order rejecting the claim without assigning proper reasons is not legally tenable in the eyes of law. The analysis of this decision is the subject matter of discussion of our present update.
This writ petition is filed under Article 226 of the Constitution of India for quashing of order dated 16.03.2022 passed by respondent and rejecting the refund application of the petitioner for the period from July, 2017 to March, 2018. Petitioner further seeks a direction to the respondents to grant refund of Rs. 88,89,113/- along with applicable interest being excess
payment of tax by the petitioner for the aforesaid period.
Petitioner is registered under the Goods and Services Tax (GST) and is engaged in the business of textiles and sale of readymade garments. Petitioner has been filing GSTR-3B returns regularly, including for the period from July, 2017 to March, 2018. For the aforesaid period, petitioner filed refund application dated 14.01.2022 before respondent claiming refund of Rs.88,89,113/-, the breakup of which is as under -
Integrated Goods and Services Tax (IGST) - Rs.76,08,563.00;
Central Goods and Services Tax (CGST) - Rs.6,40,275.00; and
State Goods and Services Tax (SGST) - Rs.6,40,275.00
The refund application was made on the ground that there was excess payment of GST by the petitioner for the aforesaid period. A show cause notice dated 09.03.2022 was issued to the petitioner by the respondent stating that the refund application was barred by limitation as the petitioner ought to have claimed the refund within twoyears from the relevant date i.e., from the date of excess payment made in terms of Section 54 of the Central Goods and Services Tax Act, 2017. Therefore, respondent proposed to reject the claim of refund. Petitioner was called upon to file objection, if any, with documentary evidence. Petitioner submitted a detailed objection before respondent on 10.03.2022 wherein petitioner specifically pointed out that the refund application was within time and could not be construed to be beyond limitation. Thereafter, respondent passed the impugned order dated 16.03.2022 rejecting the claim of refund made by the petitioner. The reason for the refund amount being inadmissible, was "delay in refund application".
The hon'ble High Court held that the order is a non-speaking order as no reasons have been assigned for rejecting the refund application of the petitioner. Consequently, the impugned order dated 16.03.2022 was set aside and the matter was remanded back to the respondent to pass a fresh order on the refund application of the petitioner dated 14.01.2022 after giving reasonable opportunity of hearing to the petitioner.
The above decision depicts that departmental authorities pass non-speaking and non-reasoned order which ultimately leads to quashing of the said orders by the High Court. The departmental authorities should ensure that proper reasoning is provided to the taxpayers so that they are able to contest the same before higher judicial forum. Practically, it is observed that since the GST portal allows limited text to be mentioned in the order, the reasoning is not clear to the taxpayer due to which they have to knock the doors of High Court in the absence of GST Appellate Tribunal. It is hoped that the government considers the lacunae in the GST portal and allow the authorities to pass detailed adjudication orders.
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