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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 ON CLARIFICATION REGARDING EXTENSION OF LIMITATION UNDER GST LAW IN TERMS OF ORDER OF SUPREME COURT

GST UPDATE ON CLARIFICATION REGARDING EXTENSION OF LIMITATION UNDER GST LAW IN TERMS OF ORDER OF SUPREME COURT
In the view of the Covid 19 situation the Supreme Court had issued an order dated 23rd March 2020 and on 27th April 2021 declaring that the period from 15th March 2020 till further orders, shall not be taken into consideration for counting the period of limitation prescribed under any general or special laws. Further, The Central Government, exercising its power under Section 168A of the CGST Act, 2017, vide Notification No. 35/2020-CT dated 03.04.2020, granted general extension for compliance under the CGST Act, 2017, IGST Act, 2017 and UTGST Act, 2017.Extension has been made applicable to appeals which were due to be filed between20th March, 2020 to 29th June, 2020. Many authors have opined that notification cannot go beyond Apex Court verdict. Hence, the impugned notification is not legally sustainable. Many associations have made representations in this regard to CBIC.
CBIC recently vide circular no. 157/13/2021-GST dated 20th july,2021 have given the clarification regarding extension of time limit in GST Law in terms of decision of Supreme Court dated 27.04.2021.The council has provided following clarifications :-
1.     The extension granted by Supreme Court extend only to the judicial and quasi- judicial proceedings in the nature of appeal/suits/petitions etc. and does not extend to every action or proceedings under CGST Act.
2.     The order of Supreme Court apply to the appeals, reviews, revisions etc., and not to original adjudication i.e. in case of any SCN is issued to  taxpayer than this extension of time limit will not apply.
3.     This Verdict of Highest Court of India will apply only to the judicial and quasi-judicial proceedings which need to be pursued within a time limit as provided in law. In case there is no limit given in the law than the order of extension will not apply.
4.     The proceedings which are under process (judicial or quasi-judicial which requires to be heard and disposed off) are need to disposed off via physical/virtual mode based on prevailing policies within the time limit.
5.     The following actions such as scrutiny of returns, issuance of summons, search, enquiry or investigations and even consequential arrest in accordance with GST law would not be covered by the judgment of the Hon’ble Supreme Court.
6.     It will not apply with regard to issuance of SCN, replies and passing order as the order applies only to the petition/applications/suits etc.
 
The circular says that the proceedings need to be initiated and compliances that are need to be done is to be done within specified time given in statue. The tax authorities will continue to dispose the proceedings like application of refund or application related to revocation or cancellation of registration without any extension of time limit.
              The board by providing the such kind clarification have invited the     litigation as the time limit has been extended only to the appeals reviews and revision and no limit has been extended for SCN, replies, order passing of petition etc. even though the assesses was facing same problem due to COVID -19. This is not logical as well as legally sustainable. Taxpayers, who are going to file appeal, will be giving extension in limitation due to COVID pandemic. But taxpayers, who are filing refund or reply to show cause notice or revocation of cancellation of registration or filing returns, are not suffering from pandemic and has to do compliance within time limit. CBIC is inviting unnecessary litigation and the technical interpretation of this judgement will invite litigation.  Moreover, such relaxations have been provided only to the assesse not to the department in case of departmental order or appeal. Govt. should have taken a liberal view by covering other situations in providing extension of time limit and follow the ratio decindandia of Apex Court decision.
 

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