Arrest for offences under GST law prior to conviction
Power to arrest, prior to conviction, is specified under Section 69 and can be exercised only by the Commissioner if he has reasons to believe that any of the specified offences were committed.
Penalty quantum for E-Way Bill violation
Section 129 does not require existence of mens rea to impose penalty. This has been watered-down, to an extent, with the issue of Circular No.64/38/2018-GST dated 14.09.2018, which specifies minimum penalty for minor offences. Yet, roving squad officers have been imposing maximum penalty for any violation under Section 129. Therefore, the judiciary has come to the rescue of innocent taxpayers from the clutches of Section 129.
Burden of proof for double movement on the same E Way Bill
Even if the dealer does not cancel the e-way bill within 24 hours of its generation, it would remain a matter of inquiry to determine on evidence whether an actual transaction had taken place or not. It is the duty of the authorities to ascertain whether double movement of goods had taken place.
Can retrospective cancellation of GST registration be mechanical?
Registration cannot be cancelled with retrospective date covering the period when the returns were filed and the taxpayer was compliant. A consequence of cancelling registration with retrospective effect is that the taxpayer’s customers are denied the ITC availed in respect of the supplies made by the taxpayer during such period. Therefore, retrospective cancellation must be based on some objective criteria.
Fate of unsigned GST orders
Omission to sign the order cannot be covered under the safeguards of “any mistake, defect or omission” under Section 160 ibid. An unsigned order is no order in the eyes of law. Mere uploading of the unsigned order would not cure the defect related to validity of the order.
Can cross-examination be refused for ITC denial on purchases from cancelled dealers?
Where ITC is denied on purchases from cancelled dealers, the taxable person should seek cross-examination of witnesses or authors of relied upon documents as a matter of right and use such opportunity judiciously. Denial of the right to cross-examine can cause grave and serious prejudice.
GST circular clarifying taxability of corporate guarantee stayed by P&H HC
CBIC clarification on taxability of corporate guarantee is stayed upon allegation that it forecloses discretion or judgment that may be exercised by the quasi-judicial authorities by clarifying provisions in the nature of adjudication.
Time limit for GST appeal
Any aggrieved person (viz., taxable person) can appeal within 3 months from the date of communication of the decision / order [Ref: Section 107(1) of the CGST Act]. However, the time limit available for the GST Department to file an appeal is 6 months from the date of communication of the decision / order [Ref: […]
No mens rea, no penalty for E-Way Bill violation: Calcutta HC
Penalty cannot be imposed under Section 129 of CGST Act if there is no intention to evade tax.
Reverse charge mechanism & ITC denial to supplier – neither arbitrary nor discriminatory: Delhi HC
Imposing reverse charge mechanism to collect tax on some services cannot be challenged under Article 14. Also, ITC is available only if the statute permits and to the extent that it does. Denying ITC to service providers (who are not liable to pay tax on output services) is founded on a rational basis which has a clear nexus with the classification since such person has no liability against which ITC can be set off.
50% penalty levied for E-Way Bill violation without intent to evade taxes: SC
Appellant cannot shirk responsibility of generating fresh E Way Bill if consignment is delayed. But, the Supreme Court held that the order under Article 142 shall not be treated as precedent.
Consequence of submitting to jurisdiction – Valuable lesson for GST Taxpayers
If a person has submitted to the jurisdiction of the authority, he cannot challenge the proceedings on the lack of jurisdiction of the said authority in further appellate proceedings. It is not a case that the state tax officer lacks inherent jurisdiction but it is a case where the jurisdiction has been exercised by the state tax officer in the absence of any objection or pointing out by the assessee that the case has been assigned to a central tax officer.
GST Exemption on Educational Institutions
Sl. Nos. 22(c) and 66 in the Table under Notification No.12/2017-Central Tax (Rate) dated June 28, 2017 (as amended) exempts GST on certain services to and by educational institutions. While the initial exemption entries were simple, insertion of provisos to Sl.No.66 ibid led to some difficulty in understanding by people who were not conversant with […]
Interpretation of Exemption Entry
The Hon’ble High Court of Gujarat observed[1] that an exemption entry should be liberally construed in accordance with the object sought to be achieved. That is, whether such provision is intended to grant incentive for promoting education or has some other beneficial reason behind it. The exemption notification should be given a literal meaning. Recourse […]
GST ITC on goods/services procured for sales promotion
Assessee is a manufacturer of ghee and other food products. It procured certain goods / services (like televisions, air-coolers, gold coins, trips to Dubai, etc.). Such goods / services were awarded to its customers (viz., retailers) based on target quantity and value of purchases made by them. Hence, there was no consideration for such activities […]
Evidence not necessary to prove technical glitch in GST TRAN-1 filing
The Hon’ble High Court of Allahabad observed that there was no necessity under either the GST Act or the Rules to furnish evidence of attempt(s) to submit Form GST TRAN-1 or TRAN-2. Rather, this was done vide a Circular. Consequently, such action is arbitrary and unenforceable.
Inverted Rate GST ITC Refund Allowed on Traded Goods
The Gauhati High Court observed existence of a conflict between Section 54(3) of CGST Act and Circular No.135/05/2020-GST. Consequently, it held that paragraph 3.2 of the aforesaid circular should be ignored. This ruling would be helpful especially for taxpayers who faced significant changes in tax rates during the first two years under the GST regime.
GST | When should a Writ Petition be Filed before the Jurisdictional High Court?
A writ petition can be entertained under exceptional circumstances like: (i) breach of fundamental rights; (ii) violation of principles of natural justice; (iii) excess of jurisdiction; and (iv) challenge to the vires of the statute or delegated legislation.
ITC on Mandatory Canteen Facility Provided to Employees
Even if it is obligatory (under law) for the employer to provide canteen facility to its employees, ITC cannot be availed citing the proviso under Section 17(5)(b)(iii). Provision of canteen facility by the employer to the employee is a “supply” within the meaning of CGST Act.
GST Registration Cannot be in Suspended State Indefinitely
How can the cancellation proceedings be concluded if the registered person belatedly replies to the show-cause notice? What if the assessee altogether fails to reply to the show-cause notice? On purposive construction, it appears that if the registered person fails to reply within the stipulated time limit, the proper officer should conclude the cancellation proceedings within 30 days thereof.
GST on Intermediary Services – Taxpayers’ Surprise!
If location of supplier of intermediary service is in India and location of recipient of such intermediary service is outside India, taxpayers find it hard to digest that such supply becomes taxable merely since the Place of Supply is in India.
Can Refund of Incorrect Head of GST, owing to Technical Glitch in GSTN Portal, be Rejected?
If the claim of refund was erroneously consolidated under the head of SGST owing to technical glitch in the GSTN portal, petitioner cannot be expected to produce any proof. In case of refund of un-utilised ITC, the order of debit is specified under paragraph 37 of Circular No.125/44/2019-GST. Paragraph 38 thereto provides relief that for applications where such order is not adhered to, no adverse view may be taken by the tax authorities.
Can Bank Account Held Jointly with Third Party be Provisionally Attached?
Section 83 of CGST Act permits provisional attachment of property belonging only to the taxable person. In instances where bank account (jointly held with third party) is attached, the aggrieved (third) party should duly file their objections under Rule 159(5) ibid and may seek judicial remedy if there is no response or belated response on the part of Revenue.
Can Refund of Erroneous / Excess Payment of Tax be Obtained Without Limitation?
Background: The petitioner paid certain dues through web portal. However, due to failure of web portal system, receipt was not generated. Hence, it was forced to again pay the dues. It applied for refund of the dual payment. The statute (Section 19 of Lighthouse Act, 1927) provided that where Light Dues were paid more than […]
Are Variable Payments to Whole Time Directors Liable to GST?
Whole-time directors were paid remuneration in the form of commission (based on percentage of profits). The Revenue demanded service tax on such variable pay. A whole-time director is one who is in full-time employment of the company, for which he is entitled to receive remuneration. Hence, it was held[1] by the Hon’ble CESTAT (Kolkata) that […]