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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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PJ/Case Laws/2011-12/1483

Sustainability of Show Cause Notice

Case: A.G. Engineers V/s Commissioner of C. Ex., Ghaziabad.
 
Citation: 2012 (25) S. T. R. 52 (Tri. – Del.)
 
Issue:- Show cause notice issued on the basis of assumptions and presumptions is not sustainable.
 
Brief Facts:- This matter came up for hearing of the stay application. But we looked into the magnitude of the demand that is very small being service tax demand of Rs. 48,886/-. Service tax demand is also followed by equal amount of penalty under Sections 76 and 78 of the Finance Act, 1994. So also there is a penalty of Rs. 1000/- under Section 77 thereof followed by interest under Section 75 of the said Act. Therefore, we took up both the stay application and appeal for common disposal by this order, also noticing that the matter is not that complicated to hear the evidence in detail. The appellants grievance is that show cause notice was issued on the conception that appellant was providing repair and maintenance service as an authorised service provider of a manufacturer. But Department has no evidence to come to that conclusion. Only taking account of some invoices of the appellant, show cause notice was issued.
 
Appellant’s Contention:- The appellant replied to the authority that no doubt that it is providing repair and maintenance service, but that is neither under any contract nor also in the capacity of authorized service provider by a manufacturer. While it was dealing with certain goods as an authorized dealer, it is not an authorised service provider. The appellant made it clear in terms of paras 2 to 7 of reply to show cause notice filed before authorities on 8-11-2008. When the appellant does not fall under the definition of maintenance and repair service under either of the clauses of Section 65(64) of Finance Act, 1994, this small tax payer should not be penalized. It is also small service provider to get relief because it has not exceeded the limit prescribed.
 
Respondent’s Contention:- On the other hand, Id. DR submits that when the appellant could not come out with clear evidence that it is not authorised service provider the department's case based on allegation made in show cause notice. So also when the appellant was service provider of some branded manufacturer the appellant will not get small scale benefit.
 
Reasoning of Judgement:- The thoroughly examined the show cause notice to find out whether there was any evidence with the department to show that the appellant had provided repair and maintenance under any agreement or contract entered into by it with any of the manufacturer. That is not available on 'record. The appellant pleaded its defence in the reply to show cause notice categorically making clear that it is not an authorized service provider. No doubt it is a dealer of certain branded goods. But merely becoming the dealer there cannot be any assumption or presumption or suspicion, however grave may be to impute the appellant to charges. Since the order is based on cogent evidence, there cannot be presumptive taxation. The appellant pleaded that appellant's submission was not been controverted by any evidence available on record of Revenue. Therefore, it appears that the adjudication is being made under presumption, which shall fail to meet justice under law. Considering that there is no evidence on record to show that the appellant acted under any contract or as an authorized service provider, the demand raised by adjudication order including penalty and interest are annulled.
 
Decision:- Appeal allowed.

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