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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 28.01.2016

SECTION 20-PART C REGARDING GENERAL PROVISIONS RELATING TO DEMAND OF TAX

GST DAILY DOSE OF UPDATION:-
 
SECTION 20-PART C REGARDING GENERAL PROVISIONS RELATING TO DEMAND OF TAX:-
 
The Part C pertaining to General Provisions relating to demand of tax in the proposed section 20 of the GST Act, 2016 is being discussed in this update.
 
The sub-section (1) states that where service of notice is stayed by an order of Court or Tribunal, the period of stay shall be excluded in computing the time period of one year, three years or five years, as the case may be.
 
The sub-section (2) states that where any appellate authority or tribunal or court concludes that the notice issued under sub-section B(1) or B(2) is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the show cause notice was issued, the proper officer shall determine the tax payable by such person for the period of three years, deeming as if the notice was issued under sub-section A(1) or A(2). In this regard, it is worth observing that this provision seeks to nullify the effect of number of judicial pronouncements of Supreme Court or High Court which have quashed entire demands on the basis of fact that extended period was wrongly invoked as there was no fraud, collusion or suppression of facts. The above provision also provides liberty to the revenue department to invoke extended period of limitation in every case without fear of losing demands of normal period of limitation. This is a very harsh provision for assessees as practically there will be no harm to the revenue department even in cases where extended period of limitation has been wrongly invoked by them. This provision seeks to remove the significance of invoking normal period of limitation as even otherwise, the demands of normal period of limitation will be confirmed automatically.
 
The other provisions like grant of opportunity of personal hearing and accepting adjournment of hearing for three times are similar to the provisions already prevalent in force. It is pertinent to note that sub-section (6) prescribes that the amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on grounds other than the grounds specified in the notice. This is welcome provision as it is observed often that the demands are confirmed on the grounds that were not alleged in the show cause notice.
 
Furthermore, sub-section (8) mentions that interest on tax short paid or not paid shall be payable whether or not specified in the order determining the tax liability thereby meaning that interest is automatic. However, this is contradictory to section 20 (D)(1) which states that all the provisions of A, B and C mutatis mutandis apply to interest. On one hand, it is being stated that interest is payable whether or not specified in the order whereas on the other hand, it is being prescribed that the period of limitation also applies to interest. Suppose, if in a particular show cause notice, there is no mention of interest, and consequently, no mention in the order, then as per sub-section (8), interest is payable irrespective of the fact that it is not specified in the order. However, if provisions of sub-section (8) are implemented, the provisions of section 20(D)(1) become otiose as when interest is mandatorily payable, where is the need to compute time limit for confirming the same?
 
Finally, the important provision is contained in sub-section (9) which specifies that the officer issuing order shall be different from the officer issuing show cause notice. This is really need of the hour as practically it is difficult for the officer issuing show cause notice to drop the proceedings initiated by him. The assessees can expect a fair decision if the officer issuing notice and that passing order is different. Moreover, sub-section (10) prescribes that the adjudication proceedings shall be deemed to be concluded if the notice to show cause is not decided within one year or eighteen months as provided in sub-section A(7) or B(7). This will definitely entrust responsibility on the revenue officers to expeditiously adjudicate and decide the cases.

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