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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 63rd on detention of goods due to expiry of E-Way Bill

GST Update no 63rd on detention of goods due to expiry of E-Way Bill
The presence of valid e-way bill with the goods is extremely important as even a minor mistake either in e-way bill or its expiry may lead to invocation of the provisions contained in section 129 of the CGST Act, 2017. At times, the validity of e-way bill gets expired on account of genuine reasons but the detaining officer takes the situation very strictly without even considering the adverse consequences of detention on the assessee. Recently, a similar situation was observed in the case of NE Equipment Solutions Pvt Ltd, wherein the goods were detained by the GST officers on the allegation that the validity of e-way bill had expired inspite of the fact that the new e-way bill was already generated by the assessee. The outcome of this decision is the subject matter of discussion of our present update. The petitioner is an engaged in the business of dealing in TATA Hitachi Construction Machinery. In the course of the business, the petitioner sold one TATA Hitachi Hydraulic Excavator and issued tax invoice with appropriate GST & generated e-way bill with a validity period. The same machinery was transported in truck and during the transportation of the vehicle, the transport department of the State of Tripura detained the vehicle on the ground that the excavator had no registration in the State of Tripura which was violative of Section 192A of the Motor Vehicles Act and petitioner paid the penalty amount to get their vehicle released. In the meantime, the validity of the e-way bill had expired and GST Department also checked e-way bill at the same check post. GST Department has detained the vehicle on the ground that the driver did not have a valid e-way bill for the machinery being brought in the State. The Petitioner has also generated fresh e way bill but GST department has refused to accept the same. Hence, the petitioner approached the High Court for the release of the machinery. The division bench noted that the government has earned substantial tax as the machinery is worth Crore and there is no allegation of tax. As such, detaining such machinery at the check post would expose it to deterioration particularly in the present season of heavy rainfall. The purchaser of goods has also suffered for not getting the delivery as its projects must be at hault. The Hon’ble High Court opined that asthere is option of releasing the machinery on provisional basis, the same should be done immediately; with determination of total liability to be done after providing the opportunity of personal hearing and issuance of show cause notice to the petitioner. Therefore, the Hon’ble High Court has ordered to release the machinery upon the petitioner filing an undertaking before this Court that eventually subject to appeal and further right to challenge the order of assessment, if any tax or penalty liability is crystallized, the petitioner would discharge the same. The above decision depicts the harassment suffered by the assessee inspite of genuine intention of complying with the laws. In the present case, due to unforeseen and unavoidable circumstances that were beyond the control of the assessee, the validity of eway bill expired and extension could not be sought by them. As a result, since there was no remedy available on expiry of e-way bill to the assessee, new e-way bill was generated but inspite of this, the machinery was detained. There was no suspicion of evasion of tax but goods are being detained without considering the genuine practical difficulties faced by the assessees. Detention of goods for frivolous grounds is a serious concern of assessees which should be adequately dealt by the government by issuing suitable clarification in this regard. It is pertinent to mention that there is circular wherein it has been clarified that for minor breaches in e-way bill such as typographical error in 2 digits of invoice/vehicle number should be condoned and provisions of section 129 should not be invoked against assessee but the favourable clarifications are seldom followed by the departmental authorities.
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