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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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Whether cash underlying in electronic cash ledger amounts to payment of tax without fulfilling any offsetting requirement? #035/2020-21

Whether cash underlying in electronic cash ledger amounts to payment of tax without fulfilling any offsetting requirement? #035/2020-21

Whether cash underlying in electronic cash ledger amounts to payment of tax without fulfilling any offsetting requirement?
Since July 2017, implementation of GST in India is successful due to GSTN. But still there are many issues and scope of improvement in functioning and technical performance of GSTN. Taxpayers face numerous problems while filing returns, statements, replying to SCNs etc on online portal. Time and again, taxpayers have made representations to the government to improve the competency and potential of GST portal.
Taxpayers struggled with delays in receiving the one-time-password (OTP), maybe due to the malfunctioning of email service providers or local internet issues. Apart from that, there are complaints like payments not getting reflected on the taxpayer’s dashboard, the GSTN system is not efficient of handling last moment heavy traffic onboard, the system is taking longer to feature the payments on the dashboard, several OTPs are received for single return filing, data uploading takes longer than usual, returns when previewed are showing incorrect numbers, data uploaded using ASP/GSP takes additional time to reflect and the system frequently logs out the user.
Recently, a case has been pronounced dealing with technical glitch occurred while filing GSTR 3B and its associated legal consequences (Vishnu Aroma Pouching Pvt. Ltd. Vs Union of India (Gujarat High Court).
The matter under consideration was whether assessee was liable to pay interest on the amount of tax liability pertaining to the month of August 2017 which was filed in September 2017 but the tax payment was declared in the return filed for the month of September 2019 (filed in October 2019). 
Against the said tax liability, requisite cash payment was made well within the due date of payment i.e. 21st September 2017 but the liability was declared in the GSTR 3B return filed for September 2019. The asseesee received notice from the department that they are liable to make payment of interest for the period 21.09.2017 to 20.10.2019.
The assessee contended that while filing GSTR 3B return for the August 2017 on 20.09.2017, the common portal was not running properly   due   to   heavy   load   because   millions   of registered   persons   were   trying   to   upload   their returns.   Owing to the said technical glitch, entire GSTR-3B was uploaded with zero amounts. Although the tax liability was uploaded as zero, the actual cash liability (after ITC) of around Rs. 114 Crore was duly deposited in cash ledger of the assessee well within the due date.
The   asseesee,   therefore,   immediately informed the concerned Assistant Commissioner incharge   of   its   unit   about   the   payment   and discharge   of   its   liability   for   August   2017   and also about the inability to correct the GSTR­3B return   submitted   on   the   GSTN   portal.   The petitioners   were   advised   to   approach   the   Help Desk forum to sort out the issue. Thereafter, the petitioners, time and again, made representations to   the   concerned   officers,   however,   despite eighteen   months   having   been   passed   and   since there   was   no   progress,   the assessee was constrained to file the captioned petition.

He pleaded that he attempted to declare correct tax liability but could not upload the same due to technical glitch and duly deposited entire cash liability in cash ledger as well. However, he could not offset the tax liability with the cash/credit balance as the liability was uploaded as zero. Thus, the liability payable in cash was left unutilised in the cash ledger only and it never got set off. As the liability was not knocked off against the cash ledger balance within the due date, Department insisted upon interest liability.
 Hon’ble High court held in the favour of assessee that assessee had duly discharged his tax liability by depositing the requisite funds in Cash ledger and without any of the fault of assessee but because of the technical glitch the same could not be offset, therefore it will be in interest of justice not to fasten interest liability upon the assessee. Moreover, assessee has tried to contact different authorities for help in this matter but it got delayed without any mistake of assessee every time.
Gujarat High Court accordingly, allowed the petition and permitted to file manually GSTR3B for August 2017 with correct and true details and   the   respondents   are   directed   to   accept   and acknowledge   such   GSTR­3B   manually   filed   by   the assessee for   August   2017.
This judgment is really a path breaking judgment in case of various technical issues faced by the taxpayers. The department has always questioned assessee in cases where though the cash was duly deposited in the cash ledger but due to issues in GST portal, the return is filed incorrect and the liability remains unoffsetted. This is truly a remarkable judgment to heal the wounds of assessee caused while making payment of interest without their mistake. We hope that the department follows the court ruling and start avoiding sending undue notices to assessee.

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