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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 ON IMPORTANCE OF PANCHNAMA 022/2020-21

GST UPDATE ON IMPORTANCE OF PANCHNAMA 022/2020-21
GST UPDATE ON IMPORTANCE OF PANCHNAMA
 
We all know that the investigation proceedings are required to be compiled and documented very precisely as many a times, the entire proceedings get vitiated merely on account of some procedural or technical grounds. In this present update, we wish to discuss the importance of Panchnama in the investigation proceedings.
 
Panchnama is a document that is prepared during the course of investigation proceedings which records evidences and findings that the officer makes at the scene of offence/crime. The document contains the description of the activities during the course of proceedings and also mentions the details of inventory found during physical verification in case of taxation matters. The document called ‘Panchnama’ is required to be signed by the investigating officer who prepares it and at least two independent and impartial witnesses called ‘Panchas’ and also the concerned party whose proceedings are being convened. As far as witnesses are concerned, they should be respectable and should be in their senses at the time of panchnama proceedings. Only majors are to be taken as witnesses.
 
In simple words, a panchnama is a record of the things visually perceived or actually experienced by the Panchas in the course of investigation. In case of search proceedings, the panchnama should record everything that takes place in the course of search. If any documents is being seized then it is necessary to record what are the documents recovered from the premises, brief description of the exact place where the documents were located in the premises, and from where they were seized by the seizing officer. It is also necessary to record as to what steps the seizing officer had taken so as to refrain him and persons accompanying him from causing any damage to the documents and also avoid any interference in any manner with such documents and contents thereof. When any documents are seized, it is necessary to enclose the same in a cover and to seal such cover so that the contents of the document cannot be tampered with.

The panchnama should contain the name, age, parentage and address of the panch witnesses, the authority under which the proceedings have been initiated, describing each and every event and article found during investigation, declaration that during the proceedings no damage has been caused to any property or person and religious sentiments of the people are also not hurt.
 
After discussing about the contents of Panchnama, we now elaborate on the importance of panchnama during the investigation proceedings. It is observed that it is very important that the veracity and authenticity of the panchnama is not doubted as it can lead to declaring the entire investigation proceedings as null and void. It is essential that the copy of panchnama is served to the assessee along with the show cause notice. It is pertinent to place reliance on the decision given by the Hon’ble Delhi Tribunal in the case of SHREE ROHIT SYN FAB (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II [2018 (363) E.L.T. 564 (TRI.-DEL)] wherein it was held that in the absence of panchnama, documents recovered from possession of assessee cannot be relied upon as a piece of evidence. Similarly, in another case, the Hon’ble Chandigarh Tribunal in the case of GOLD PLUS GLASSES INDIA LTD. VERSUS COMMISSIONER OF C.EX., ROHTAK [2018 (363) E.L.T. 381 (TRI.-CHAN.)] it was held that although panchnama was drawn and was signed by the panch witnesses but the panch witnesses filed affidavits saying that they were not part of the proceedings but were only called to sign the panchnama. Consequently, panchnama drawn during the course of investigation had no evidentiary value and demand based on the said panchnama was held as non sustainable. It is also worth mentioning that the panchnama should also record the method prescribed for stock taking and computation sheet of the said stock. In absence of calculation sheet and the methodology adopted for stock verification in panchnama, duty demand was set aside in the case of DAYA SUGAR VERSUS COMMISSIONER OF CENTRAL EXCISE-MEERUT-I [2017 (358) E.L.T. 1006 (TRI.-ALL)].

The above decisions indicate the relevance of panchnama in the investigation proceedings and confirmation of tax demand against the assessee.  

This is solely for educational purpose.

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