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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 RECTIFICATION IN GSTR-1 and 3B

GST UPDATE ON RECTIFICATION IN GSTR-1 and 3B
As per CGST ACT any registered person who has furnished the details under sub-section (1) for any tax period and which have remained unmatched under section 42 or section 43 can rectify such error or omission upon discovery and shall pay the tax and interest (if any) in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period. Such rectification of error or omission in respect of the details furnished under sub-section (1) is allowed till furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier. In the view of above provision of Act The Hon’ble Calcutta High Court in its recent decision in case of Abdul Mannan Khan v. the GST Council & Ors dismissed the petition of assessee to rectify GTSR -1 after the specified time limit in the law. Here the assesse inadvertently uploaded the sale invoice in name of unregistered person instead of registered person and made an application after one and half year for rectification in GSTR-1 due to restriction of ITC availment by buyer. Court ruled “the statute has provided a period of limitation for seeking rectification and the Court cannot condone the limitation period provided for rectification of GSTR-1 Form as per Section 37 of the under CGST Act and condoning such delay would make the provision otiose and open the floodgates for similar cases”. On the contrary Madras HC has recently allowed the writ petition in case of Pentacle Plant Machineries Pvt. Ltd. v. Office of the GST Council and others. It was allowed on the reasoning that the asseesee can correct the human error in the GSTR -1. Court said that correction should be allowed for the inadvertent human error. Here the asseesee, while filing the GSTR -1 instead of GST number of purchaser in Aandhra Pradesh mentioned the GST number Uttar Pradesh. This writ petition has been allowed by Madras HC on the basis of decision in case of SUN DYE CHEM where the assessee while filing the GSTR-1 have wrongly filed the output tax as IGST instead of CGST, SGST and credit of the buyer was blocked. The error was noticed by buyer only after the last date of correction in GSTR -1 i.e. 31st march 2019. Court ruled that since the aseesee was not able to track mistake as the form GSTR -1A and and GSTR-2 was not operationalized. Therefore credit should not be blocked on the basis of inadvertent human error and the court directed permitting the petitioner to resubmit the annexures to GSTR-3B. The petitioner should not be mulcted with any liability on account of the bonafide, human error and the petitioner must be permitted to correct the same. In line with the above view Delhi HC in case of BHARTI AIRTEL LIMITED VERSUS UNION OF INDIA & ORS where there was short claimed input of assessee was amounted to Rs 923 crore and the main reason of such non detection was non-operationalization of Forms GSTR-2A, GSTR-2, and GSTR-3. The High Court also affirmed that since the validations and verification checks proposed in CGST Act, 2017 could not be practically implemented due to lack of proper IT infrastructure, the petitioner could not be denied the opportunity of correcting its mistake in reflection of input tax credit, particularly when there is no mechanism to claim refund of tax paid by them in cash. Circular prescribing rectification of mistakes in subsequent returns is contrary to the return mechanism contained in section 39 of the CGST Act, 2017. Restriction can be introduced by way of circular only if it is in conformity with the scheme of the Act and provisions contained therein. As the circular is going contrary to the scheme of the Act, the same should not be implemented. High Court allowed the petitioner to rectify GSTR-3B for the period July, 2017 to September, 2017. Based on the above case laws, we can say that authorities should also take lenient view in case of genuine and inadvertent human error by allowing the assesee to rectify the GST returns. Consequently, it will not block ITC of purchaser. If it is not done then it would be harsh on assessee as the purchaser will not pay the GST amount to supplier as credit is not available to him. But the amount has been paid in Government exchequer. Simply non- rectification of mistake for a period will deprive the taxpayer of its legitimate credit though the same has been deposited to Government. Such an approach coupled with technical glitches in portal will be very harsh for poor taxpayers in these difficult period of pandemic.
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