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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 323 on allegations of fake invoice not mentioned in show cause notice

GST Update No 323 on allegations of fake invoice not mentioned in show cause notice
It is well settled principle that a show cause notice issued by the revenue department should contain all the ingredients prescribed under statue failing which makes it invalid. There had been plethora of cases in the past as well wherein the departmental officers had to face the agony of Courts on having a carelessness attitude. However, once again the one case on similar subject matter was reported before Bombay High Court in the case of Archana Textile Corporation V/s The State of Maharashtra and Ors. The decision imparted in this case is subject matter of our present update.The petitioner challenged the impugned order on various grounds wherein it was allegations as regards to fake invoices and fake norms were raised against the assessee. The petitioner submitted that the show cause notice did not contain any of these allegations and details. Hence, there is violation of principle of natural justice since the order is passed without giving an opportunity of hearing to the assessee.
The Court agreed to the submissions of the assessee and stated that the show cause notice issued dated 05.11.2019 was a bald show cause notice. Further, the copy of show cause notice tendered across the bar and taken on records was marked as “X” for identification. No details of claims or deductions made by petitioner were mentioned in the show cause notice. It was held that it was duty of the revenue department to provide all the details appropriately. Therefore, the procedure adopted is totally incorrect. The show cause notice issued should mandatorily contain all the details so that the petitioner can respond to same effectively. It was held that it is a serious lapse on the part of departmental officers which needs to be adhered to without any excuse. This happened because of the fact that the departmental officers are neither aware about the legal provisions nor they follow the principles of natural justice Therefore, the impugned order along with the show cause notice was quashed and set aside. It was directed to issue a fresh show cause notice to petitioner mentioning every detail and allegations. The above decision is once again another example demonstrating and highlighting the importance of issuing proper show cause notice. There had been various judicial pronouncements in the past as well wherein the show cause notice was quashed wither being improper or not served properly or not updated on the portal etc. The need of the hour is that a proper mechanism should be developed to streamline the process of issuance of show cause notice failing which the subject matter will be prone to unnecessary litigations. Even the author of this update has come across various show cause notices particularly relating to refunds wherein the allegations are given in 60 to 120 words. Nobody is able to understand the same and then poor taxpayer of his consultant approaches the department and ask about the details of show cause notice. Thereafter they are able to file the reply. Even after reading this judgement, in our view, every taxpayer is not able to move to High Court and as such one has to understand the same from the department only. This was not the case in erstwhile Excise and service tax regime. A proper and detailed show cause notice was issued to taxpayers. Either the portal is giving limited space to department officer or it provides a general show cause notice to officer and they issue the same. Even the order is being issued in the same fashion.
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