GST Weekly Flashback for the period 26 January To 1 February 2025.
Table of Contents
Supreme Court
Supreme Court Upholds Bombay High Court Order Reaffirming Quashing Of Personal Penalty Imposed On Authorized Signatories Under GST
Case Title: Union Of India & Ors. Versus Shantanu Sanjay Hundekari
The Supreme Court has upheld the order passed by the Bombay High Court, reaffirming the quashing of the personal penalty imposed on authorized signatories under GST law.
Delhi High Court
Customs Department Can Levy Interest On IGST By way of Notification If Importer Breaches Exemption Condition: Delhi High Court
Case Title: KBS Industries Ltd & Anr. Versus The Customs Central Excise And Service Tax Settlement Commission
The Delhi High Court has held that the customs department can levy interest on IGST by way of notification if the importer breaches the exemption condition.
The bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma has observed that Section 25(1) of the Customs Act empowers the Central Government to impose conditions for exemption from payment of specified duties. And, the Central Government had stipulated payment of interest from the date of clearance of the material if the importer had failed to discharge their export obligations, as one such condition.
DGGI Failed To Provide Copy Of Seized Documents Despite Several Request: Delhi High Court Directs Assessee To Challenge Final Order
Case Title: Garg Exim Versus Directorate General Of GST Intelligence
The Delhi High Court has directed the assessee to challenge the final order passed by the Directorate General Of GST Intelligence (DGGI) as it failed to provide a copy of seized documents despite several requests.
Delhi High Court Directs Release Of Rs. 23.50 Lakhs Seized By DGGI Along With Interest
Case Title: Nand Kishore Gupta Versus The Additional Director General Directorate General Of GST Intelligence
The Delhi High Court while directing the release of Rs. 23.50 lakhs seized by the Directorate General Of GST Intelligence (DGGI) held that cash (Indian currency) is explicitly excluded from the definition of “goods” as it squarely falls within the definition of the term “money” as provided in Section 2(75) of the GST Act.
Parallel Enquiry Can’t Be Conducted By State And Central GST Dept.: Delhi High Court
Case Title: Unity Traders Versus Govt Of NCT Of Delhi
The Delhi High Court has held that the parallel enquiry cannot be conducted by the State and Central GST authorities.
The bench of Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar has quashed the show cause notice in light of the investigation which has been initiated by the Directorate General of GST Intelligence in terms of a SCN. The SCN proceedings are yet to be concluded.
Delhi High Court Quashes Order Resulting In Negative Blocking Of ITC Ledger
Case Title: M/S GOODLUCK ENTERPRISES Versus UOI
The Delhi High Court has quashed the order resulting in negative blocking of Input Tax Credit (ITC) ledger.
Madras High Court
GST Evasion | Gold Transported For Sale Under The Pretext Of Showcasing In Exhibition: Madras High Court Refuses To Quash Confiscation Notice
Case Title: Mukti Gold Private Limited Versus State Tax Officer
The Madras High Court while refusing to quash the Confiscation Notice held that the gold transported for sale under the pretext of showcasing in exhibition with the intention of GST evasion.
The bench of Justice Krishnan Ramasamy has observed that the Officials have come to the conclusion that the goods were transported only with the intention of evading the payment of tax under the pretext that the gold jewelries were carried to showcase the same to its customers, by misusing the provisions of Rules 138 and Rule 55 of the CGST Rules.
GST Registration After Inspection Not A Voluntary Conduct; Amounts To Tax Evasion: Madras High Court Upholds Penalty
Case Title:M/s.Annai Angammal Arakkattalai (Pre Mahal) Versus The Joint Commissioner or GST (Appeals)
The Madras High Court while upholding the penalty has held that GST registration after inspection is not a voluntary conduct and it amounts to tax evasion.
Madras High Court Directs GST Assistant Commissioner To Refund Rs.74.61 Crores To Dell In Cash Subject To Debit Equal Amount From Electronic Credit Ledger
Case Title: Dell International Services India Private Limited Versus Union of India
The Madras High Court has directed the GST assistant commissioner to refund Rs.74.61 crores to Dell in cash subject to debit equal amount from electronic credit ledger.
The bench of Justice C.Saravanan has observed that the petitioner, Dell cannot be burdened with accumulation of ITC as the petitioner is unable to liquidate the same as it is under inverted duty structure. If the system was enabled then and there, the petitioner would have discharged part of its tax liability also from the input that ought to have been allowed to be transitioned in the system.
Gauhati High Court
GST Evasion Amount Not Determined By Commissioner: Gauhati High Court Grants Bail To Accused Of GST Evasion By Falsely Claiming ITC
Case Title: DHARMENDRA AGARWAL Versus Union Of India
The Gauhati High Court while granting bail to the accused of GST evasion by falsely claiming Input Tax Credit (ITC) as the commissioner failed to determine GST Liability of alleged GST evaders which amounted to lack of ‘reasons to believe’.
Show Cause Notice Summary In GST DRC-01 Is Not A Substitute To Show Cause Notice: Gauhati High Court
Case Title: Shri Shambhu Prasad Versus The State Of Assam And Ors
The Gauhati High court has held that the Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act as well as the State Act.
The bench of Justice Soumitra Saikia has observed that irrespective of issuance of the Summary of the Show Cause Notice, the Proper Officer has to issue a Show Cause Notice to put the provision of Section 73 into motion. The Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act or State Act cannot be confused with the Statement of the determination of tax to be issued in terms with Section 73 (3) of the Central Act or the State Act.
Rajasthan High Court
Rajasthan High Court Refuses Bail To Person Accused Of Wrongfully Availing ITC Based On Manipulated Bills
Case Title: Vineet Jain Versus Union Of India
The Jaipur Bench of Rajasthan high Court has refused to grant bail to Input Tax Credit (ITC) amounting to 10.87 crores, on the basis of forged transactions and also manipulated the bills showing transportation of goods from Delhi to Jaipur.
The bench of Justice Praveer Bhatnagar has observed that the seizure of the fake rubber stamps of the transport company, fake E Bills purported to be demonstrated as transportation of scrap from Delhi to Jaipur coupled with the statement of the transport company owner, stating the actual route through which his truck has moved on such dates, the report of the concerned authority confirming the non-existence of the firms from whom the petitioner had received so-called scrap affirmatively validates that petitioner fraudulently caused loss to the government revenue by claiming input tax credit in tune to 10.67 crores.
Jharkhand High Court
Non-Compliance With Sections 107(8) and 107(12) Of GST Act: Jharkhand High Court Imposes Cost Of Rs. 25,000 On GST Dept.
Case Title: Mukesh Kumar Singh Versus The Commissioner
The Jharkhand High Court has imposed the cost of Rs. 25,000 on the GST department to be paid to assessee for the non-compliance with Sections 107(8) and 107(12) Of GST Act.
The bench of Chief Justice M.S. Ramachandra Rao and Justice Gautam Kumar Choudhary has observed that under Section 107(8) of the GST Act, it is the duty of the Appellate Authority to give an opportunity to the appellant of being heard. There is no evidence that such an opportunity of hearing was provided to the appellant by the Joint Commissioner.
Himachal Pradesh High Court
Plea Challenging Eligibility Criteria For Appointment Of GSTAT Technical Member: Himachal Pradesh High Court Restraints Govt. To Make Appointment
Case Title: Amit Kashyap Vs. Principal Secretary & Ors.
A petition has been filed in the Himachal Pradesh High Court challenging the eligibility criteria for appointment of the Technical Member of Goods and Service Tax Appellate Tribunal (GSTAT).
A bench of Justice Jyotsna Rewal Dua while admitting a petition from a petitioner with over 25 years of Group A service has restrained the state government from appointing a Technical Member in the GST Appellate Tribunal.
Madhya Pradesh High Court
Madhya Pradesh High Court Stays GST Demand For Grant Of Mining Lease/Royalty
Case Title: Treders Through Propwright Harsh Khedia Vs The State Of Madhya Pradesh
The Jabalpur Bench of Madhya Pradesh High Court has stayed the GST demand for grant of mining lease/royalty.
The bench of Justice Sanjeev Sachdeva and Justice Vinay Saraf while reserving the right of the respondent-department to move for vacation of ad interim stay, the court directed that in the proposed recovery of GST on royalty shall remain stayed.
Calcutta High Court
Non-Disclosure Of Sensitive Information By DGGI Forming The Basis Of Search Operation Is Not Violative Of Principles Of Natural Justice: Calcutta High Court
Case Title: Deltatech Gaming Limited Vs. Union of India & Ors.
The Calcutta High Court has held that the non-disclosure of sensitive information gathered by Directorate General of Goods and Services Tax Intelligence (DGGI) forming the basis of search operation is not violative of principles of natural justice.
The bench of Justice Rajarshi Bharadwaj has observed that sensitive information gathered by the Intelligence Department, forming the basis of a search operation, should not be disclosed to the petitioners. Withholding sensitive information does not violate the principles of natural justice. The source of information collected by the Intelligence Department of Revenue is crucial for maintaining confidentiality and the integrity of investigative processes.
Gujarat High Court
GST Evasion | DGGI Empowered To Transfer SCN Adjudication: Gujarat High Court
Case Title: S. Kushalchand International Pvt. Ltd. & Anr. Versus
The Additional Director, Directorate General Of Goods And Service Tax Intelligence & Anr.
The Gujarat High Court has held that the Directorate General Of Goods And Service Tax Intelligence (DGGI) is empowered to transfer adjudication of Show cause notice (SCN) in GST evasion case.
The bench of Justice Bhargav D. Karia and Justice D.N.Ray has observed that show cause notice issued by DGGI shall be adjudicated by the competent Central Tax Officer of the Executive Commissionerate in whose jurisdiction the noticee is registered. Therefore, it is necessary to refer to the main noticee/s who are situated at Kannauj and who would fall within the jurisdiction of Commissioner, Kanpur as per Entry No.54 of Table II of Notification No.2 of 2017 and Principal Commissioner, Kanpur would have the territorial jurisdiction of District of Kannauj.
Andhra Pradesh High Court
Non-Filing Of Monthly Return Amounts To Wilful Suppression Of Fact Under GST: Andhra Pradesh High Court Uphold Penalty
Case Title: M/s. Sriba Nirman Company Versus The Commissioner (Appeals)
The Andhra Pradesh High Court has upheld the penalty and held that non-filing of monthly return amounts to wilful suppression of fact.
The bench of Justice R. Raghunandan Rao and Justice Maheswara Rao Kuncheam has observed that the defense of the petitioner is that his sole client, viz., M/s. Vijay Nirman Company had not paid its dues, due to which the petitioner could not remit the necessary taxes along with returns. The appellate authority held that the petitioner had been paid certain amounts by his main client M/s. Vijay Nirman Company and as such, there was no impediment for the petitioner to remit the necessary taxes. On this basis, the appellate authority held that there was wilful suppression and upheld the penalty.
