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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 /2026-27/0043

M/s Kay Arr Engineering Services VS The Assistant Commissioner of GST & Central Excise
GST UPDATE
Hon’ble Court: MADRAS HIGH COURT
Case Title: M/s. Kay Arr Engineering Services VS The Assistant Commissioner of GST & Central Excise
Petition No. & Citation: W.P.No.5854 of 2025
Hon’ble Judge(s) MR.JUSTICE C.SARAVANAN
Date of Order 03.06.2026
Outcome In favour of the Petitioner
 
Brief Facts of the Case
The petitioner, M/s. Kay Arr Engineering Services, was issued a Show Cause Notice by the Directorate General of Goods and Services Tax Intelligence (DGGI) alleging short payment of GST due to incorrect classification under S.No. 234 of the First Schedule to Notification No. 1/2017-Central Tax (Rate) (taxed at 5%, later revised to 12%) regarding maintenance charges for wind-operated electricity generators by invoking the extended period under Section 74 of the CGST Act for the period FY 2017-18 to FY 2022-23. The adjudication was concluded in Order-in-Original passed by the Assistant Commissioner of GST & Central Excise, confirming the proposals contained in the Show Cause Notice. The petitioner challenged the adjudication order before the Madras High Court primarily on the ground of lack of jurisdiction of the adjudicating authority.
Relevant Notification
Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024.
Question before Hon’ble Court 
Whether an Assistant Commissioner was competent to adjudicate a Show Cause Notice issued by DGGI under Sections 73/74 based on Notification No. 02/2022-Central Tax ?
Brief Arguments by Petitioner 
Bona fide Classification Dispute
The petitioner contended that the classification adopted by the petitioner was based on a bona fide interpretation of the applicable GST rate notifications and therefore invocation of the extended limitation period under Section 74 was unjustified. 
 
* Order passed without Jurisdiction
The principal challenge was that. Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024., specifically designated Additional Commissioners or Joint Commissioners to adjudicate notices issued by DGGI officers. Since the impugned order was passed by an Assistant Commissioner, the adjudication was without jurisdiction and liable to be quashed. 
Composite Adjudication of Multiple Years
Reliance was also placed on the decision in Titan Company Ltd. v. Joint Commissioner of GST, wherein it was held that authorities cannot bunch several assessment years together and pass composite orders.
Brief Arguments by Respondent
Write Petition not maintainable
The Department argued that the classification dispute involved factual examination and ought to be adjudicated by the appellate authority under Section 107 of the CGST Act and therefore invocation of Article 226 to file writ where alternate remedy is available is not sustainable.
 
Assistant Commissioner acted within Jurisdiction
It was contended that subsequent amendments merely expanded powers of higher officers without divesting Assistant Commissioners of their adjudicatory authority and therefore Order was rightly passed within Jurisdiction.
Cases Relied Upon
Case Law Citation
Titan Company Ltd vs. Joint Commissioner of GST (W.P. No. 33164 of 2023)
Findings and Judgement 
The Court carefully examined Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024 and noted that Table V expressly vested powers for adjudication of notices issued by DGGI officers upon Additional Commissioners or Joint Commissioners of Central Tax. Consequently, where a Show Cause Notice had been issued by DGGI, the adjudication could be undertaken only by the officers designated under the amended notification. 
The Court held that the impugned Order-in-Original had been passed by an Assistant Commissioner despite the statutory notification conferring adjudicatory powers upon Additional Commissioners/Joint Commissioners. Therefore, the order suffered from a jurisdictional defect and procedural illegality. 
Accordingly, the Court quashed the Order-in-Original and remanded the matter for fresh adjudication by the competent authority in terms of Notification No. 02/2017-Central Tax as amended.
 
Author’s Comment
This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.
 
 
CA Pradeep Jain 
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Opinion


Author’s Comment
This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.
Author’s Comment
This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.
 
Author’s Comment
This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.Comment
This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.
Author’s Comment
This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.
Author’s Comment
This judgment is significant for businesses facing GST investigations, as it emphasizes that GST notifications are mandatory and not merely procedural, and authorities cannot bypass the procedure prescribed under law. The High Court has clarified that when a notice is issued by DGGI, the matter must be decided only by the officer specifically authorized under the Notification No Notification No. 02/2017-Central Tax as amended by Notification No. 02/2022 dated 11.03.2022 and further amended by Notification No. 27/2024 dated 25.11.2024. This provides an important safeguard to taxpayers against orders passed by authorities lacking proper jurisdiction and reinforcing that the Orders passed by officers not legally empowered to decide the cases would not sustain.
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