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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 DELAY IN CONSTITUTION OF APPELLATE TRIBUNAL:- 100/2020-21

GST UPDATE ON DELAY IN CONSTITUTION OF APPELLATE TRIBUNAL:- 100/2020-21
GST Law has celebrated his 3rd Birthday recently and it is expected that it fulfils its objective of “Good and Simple Tax”. There are many advancements pending in its effective implementation, one of being the constitution of Goods and Services Tax Tribunal (GSTAT). As we all know that for any law to be able to operate smoothly, it is utmost necessary that the areas of disputes and litigation are resolved at the earliest as ‘justice delayed is justice denied’. However, one of the important aspect of GST law still remains un-noticed which is the constitution and functioning of the GSTAT. In today’s update, we will discuss about reasons for delay in constitution of GSTAT and its repercussions faced by the taxpayers.
 
The GST Appellate Tribunal is not constituted till date and it is worth mentioning that its constitution itself is being challenged before Madras High Court in the case of REVENUE BAR ASSOCIATION VERSUS UNION OF INDIA [2019 (30) G.S.T.L. 584 (MAD.)] wherein it was held that requirement that GST Appellate Tribunal benches consists of one Judicial Member, one Technical Member (Centre) and one Technical Member (State) are liable to be struck down as administrative members outnumbering judicial member violated Article 14 and 50 of the Constitution of India and Supreme Court judgments. It is submitted that when the composition of members in GSTAT itself is under dispute, its functionality is far from reality in near future. However, due to non-constitution of Tribunal, the taxpayers are facing many problems as recovery proceedings are being initiated against them for not challenging the order passed by the Commissioner Appeals. It is submitted that filing of Writ before High Court in the absence of GSTAT is a costly affair and every taxpayer cannot afford to knock the doors of High Court. However, in this context, reference may be made to Removal of Difficulty Order No. 09/2019-Central Tax dated 03.12.2019 wherein the time limit for filing appeal before GSTAT has been specified as three months from the date of communication of order or three months from the date on which President or the State President, of the Appellate Tribunal after its constitution under section 109 enters the office, whichever is later. Hence, the starting point of the time limit for filing appeal before the GSTAT has been deferred till the date when President/State President enters office. However, till the constitution of the GSTAT, the taxpayers will be facing the rigours of recovery proceedings being initiated against them.
 
According to section 78 of the CGST Act, 2017, any amount payable by a taxable person in pursuance of an order passed under this Act shall be paid by such person within a period of three months from the date of service of such order failing which recovery proceedings will be initiated. It is to be noted that this section can very well be invoked by the revenue authorities as there is no exception to initiation of recovery proceedings wherein the statutory time limit for filing appeal has not expired. The provision contained in section 107(7) and section 112(9) also provides stay against recovery of balance amount only where appeal has been filed along with compliance of the condition of mandatory pre-deposit and there is no other exception regarding non-recovery of dues by the department. In the past also, dispute regards recovery of dues wherein appeal was pending along with stay application before Tribunal arose when draconian Circular No. 967/01/2013-CX, dated 1-1-2013 was issued. The taxpayers were issued recovery notices even during pendency of stay application and taxpayers could get relief only by filing writ petitions before High Courts and ultimately, the circular was quashed. When, in the erstwhile indirect tax regime, recovery proceedings were initiated even during pendency of appeals, then it cannot be expected by the taxpayers that the revenue authorities would not resort to recovery proceedings in cases where there is delay in filing appeal before GSTAT on account of its non-constitution. The above view is supported by the recent decision given by the Hon’ble Delhi High Court in the case of ZONES CORPORATE SOLUTIONS VS COMMISSIONER [2020-TIOL-1168-HC-DEL-GST] wherein it was held that the revenue authorities cannot be allowed to withheld refund due to the fact that department is unable to prefer appeal against the order of Commissioner Appeals allowing refund before GSTAT for its non-constitution. Therefore, when refunds can be withheld, ignoring the principle of judicial discipline laid down by the Apex Court in the case of UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. [1991 (55) E.L.T. 433 (SC)] wherein it was held that mere filing of appeal cannot be grounds for not following the judicial principle, the recovery proceedings can also be initiated by the department against the taxpayers.
 
Hence, it is hoped that the GSTAT is constituted and made operational at the earliest possible so that unnecessary harassment of assessees by initiation of recovery proceedings is avoided as every taxpayer is not competent to file writ petitions before High Courts for getting reliefs. 
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