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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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Publish Date: 02 Mar, 2013
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SECTION 73(2A) : REVENUE TO FOLLOW “SOMETHING IS BETTER THAN NOTHING”

 

An article by:-
CA. Pradeep Jain
CA. Preeti Parihar
CA. Neetu Sukhwani
 
Backdrop:-
Section 73 of the Finance Act, 1994 relates to the issue of show cause notice and confirmation of demand. Under existing provisions where the appellate authority finds that the demand is confirmable on merits, however, extended period is not invokable, then the entire demand raised in the show cause notice is quashed. Thus, it is only on the grounds of limitation, the entire demand is quashed, even though it was genuinely raised on the basis of merits. In order to bridge this lacuna, hon’ble Finance Minister has proposed the insertion of sub-section 2A to section 73 which says that where the extended period is held as not invokable, then the Central excise officer will re-quantify the demand and demand of 18 months will have to be paid by the assessee.
 
Proposed section 73(2A):-
This section has been proposed as follows:-
“(2A) Where any appellate authority or tribunal or court concludes that the notice issued under the proviso to sub-section (1) is not sustainable for the reason that the charge of –
(a)Fraud; or
(b)Collusion; or
(c)  Suppression of facts; or
(d)Contravention of any provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax.
has not been established against the person chargeable with the service tax, to whom the notice was issued, the Central Excise officer shall determine the service tax payable by such person for period of eighteen months, as if the notice was issued for the offences for which limitation of eighteen month applies under sub-section (1).”
 
Implications of proposed section:-
Till now, where the show cause notice was issued on the grounds of fraud, suppression or willful mis-statement, etc. by invoking extended period of limitation; and it was concluded that none of these elements are present and extended period is not invokable; the entire demand was quashed even if it was sustainable on the merits. However, now by virtue of this section, if the demand was found genuine on merits but quashed on the grounds of limitation, the central excise officer is required to re-quantify the demand of normal period. Thus, now, as soon as this provision is enacted, the assessees cannot enjoy the full waiver from demand merely on the grounds of limitation.
 
While concluding:-
By introducing this section, the government has proposed to secure at least the demand of normal period of limitation if not the extended period; as “something is better than nothing”. Although, the demand for the normal period would not provide complete contentment to the government but it would definitely increase its revenue which would add to its total revenue as it is common proverb that “Many a little, makes a mickle” and collection of demand for normal period would definitely add to the efforts of increasing overall revenue of the government. However, it is worth mentioning here that this kind of provision has been inserted in the service tax law only. No such parallel provision has been inserted in the Central Excise Law. The manufacturers and importers will be thanking the government for this relief, whether or not given knowingly. Also, you never know, when this benefit may be snatched from these assessees. If it is done in subsequent years, there will be a beginning of new trend as till now, service tax law was importing the sections from Central excise law. But if the above possibility turns out in reality, the situation will be reversed with beginning of new era.

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PRADEEP JAIN, F.C.A.

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