The Petitioners preferred a writ before the Delhi High Court to impugn the passing of a cryptic order that did not take into consideration their reply to the Show Cause Notice served to them.
The Delhi High Court opined that the Proper Officer had to at least consider the reply on merits and then form an opinion if he was of the view that any further details were required, the same could have been specifically sought from the Petitioner.
The Court held that the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with the law.
CANARA BANK [2024-VIL-332-DEL]
We are glad to bring you the 42nd Edition of our ‘Vision 360’ Newsletter in association with TIOL. In this edition, we have covered the key judicial and legislative developments in Direct, Indirect Tax other regulatory areas in the months of March 2024. Following are some key highlights of this Newsletter:
🔹 International landscapes in the field of taxation across the globe witnessed numerous modifications and amendment;
🔹 A detailed comprehensive perspective from an industry expert, covering a variety wide range of topics, including such as recent tax reforms, emerging trends in the industry trends, and updates from the global tax arena;
🔹 Articles discussing the addressing the contentious matter of timely payments to MSMEs as well as the utilization of electronic credit ledger for pre-deposit in filing an appeal under the GST framework and;
🔹 Judicial and Regulatory updates in the Direct Tax, Indirect Tax and Regulatory fronts as took place in March, 2024.
We hope that reading of the newsletter would bring an enriching experience to you! Your valuable feedback is always welcome at consult@gsladvisors.com or updates@gsladvisors.com
The Petitioner had been subjected to an assessment of ITC claim for the period July 2017 to March 2019 by the Central Government authorities. Subsequently, the similar notice for similar set of transactions had been issued by the State authorities. Aggrieved, the Petitioner preferred a Writ before the Rajasthan HC.
Referring to Section 6(2)(b) of the CGST/RGST Act, the HC held that once a notice has been issued u/s. 73 by the Central authorities, the authorities are barred to pursue the same matter. Accordingly, the HC restrained the State authorities to further pursue the matter.
M/s LARSEN AND TOUBRO LIMITED [2024-VIL-300-RAJ]
GLS Comments:
In a similar matter, the Kolkata HC in RE: Raj Metal Industries [W.P.A. 1629 of 2021] had stayed the summons issued and proceedings initiated against the assessee by the State Authorities since the proceedings were already pending on same subject matter under CGST Act. It was held that the summons issued is, prima facie, in violation of Section 6(2)(b) of the WBGST Act.
The Petitioner had filed an appeal against the demand order u/s. 107 of the CGST Act. The said appeal had been disposed by the Additional Commissioner relying upon the judgement of the Orissa HC in the matter of M/s. Jyoti Construction [2021-VIL-715-ORI] on the ground that that the Electronic Credit Ledger(‘ECrL’) cannot be used for the purpose of filing an appeal under the GST and the payment for the pre-deposit must be done through Electronic Cash Ledger (‘ECL’) only. Aggrieved the Petitioner filed a writ before the Gujarat HC.
The Court relying upon the case of M/s. Oasis Realty [2022-VIL-674-BOM] and the CBIC Circular dated July 6, 2022 held that the pre-deposit required under Section 107(6) of the CGST Act can be paid using the ECrL. The HC ruled that amount available in the ECrL can be utilized for payment of IGST, CGST, SGST, or UTGST. The HC further emphasised that it is not necessary to reply upon the case of M/s. Jyoti Construction (‘supra’) because subsequent to the said order the CBIC has issued clarification in the form of a circular which allowed the utilization of the amount available in the ECrL for payment of pre-deposit. Consequently, the impugned order-in-appeal was quashed, and the appeal was restored.
M/s Shiv Crackers [2024-VIL-245-GUJ]
GLS Comments:
It is pertinent to note that in the erstwhile regime, pre-deposit took on the characteristics of tax liability, allowing payment through the CENVAT Credit account. However, under the GST law, the utilization of the ECrL for payment towards output tax is restricted by Section 49(4) of the CGST Act. Sections 107 and 112 of the CGST Act refer to a "sum equal to percentage of tax" rather than explicitly stating "tax" itself. Therefore, it becomes imperative to delve into whether the pre-deposit qualifies as output tax or is merely an amount to be deposited.
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We are glad to bring you the 41st Edition of our ‘Vision 360’ Newsletter in association with TIOL. In this edition, we have covered the key judicial and legislative developments in Direct, Indirect Tax other regulatory areas in the months of February 2024. Following are some key highlights of this Newsletter:
🔹 International landscapes in the field of taxation across the globe witnessed numerous modifications and amendment;
🔹 A detailed comprehensive perspective from an industry expert, covering a variety wide range of topics, including such as recent tax reforms, emerging trends in the industry trends, and updates from the global tax arena;
🔹 An article discussing the recent ruling by the Hon’ble Madras High Court emphasizing the importance of safeguarding ITC in GST despite reporting discrepancies in GST returns, highlighting the need for a balanced approach by tax authorities and;
🔹 Judicial and Regulatory updates in the Direct Tax, Indirect Tax and Regulatory fronts!
We hope that reading of the newsletter would bring an enriching experience to you! Your valuable feedback is always welcome at consult@gsladvisors.com or updates@gsladvisors.com
The Petitioner had claimed refund application on export of IT services under LUT, without payment of IGST. While the refund application for the period April 2019 to June 2019 was allowed, the subsequent applications were proposed to be rejected vide SCN on the premise that the specific goods are not consumed in the process of provision of output service. Subsequently, vide orders, the applications were rejected on the ground that the expenses incurred on specific goods were required to be capitalised in the books of accounts as per AS 10. Aggrieved, the Petitioner preferred Writs before the Allahabad HC challenging the rejection of refund applications.
The Petitioners argued that their refund of unutilised input tax credit of was withheld on inconsistent and irrational grounds. The Allahabad HC observed that when the facts and circumstances in a subsequent assessment year are the same, no authority, whether quasi-judicial or judicial can be allowed to take a contrary view. The arbitrary withholding of refund claims for specific periods, despite past precedents and the absence of any material change in circumstances, is contrary to the principles of fairness and equity.Â
The HC observed that any attempt by the issuing authority to expand the scope of inquiry or introduce new allegations beyond those articulated in the SCN would constitute a violation of the principles of natural justice and any action taken beyond the confines of the SCN, is void ab initio and cannot be sustained. The HC set aside the impugned orders.
Samsung India Electronics Private Limited [2024-VIL-239-ALH]
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The transitional credit claimed by the Petitioner had been rejected by the Revenue on the ground that subject invoices booked by the Petitioner on July 31, 2017, were beyond the period of 30 days from the appointed date u/s. 140(5) of the CGST Act. It was the allegation of the Department that the appointed date i.e., July 01, 2017 is to be included for the purpose of computation of time-period of 30 days, contemplated u/s. 140(5).
Aggrieved, the Petitioner preferred a Writ before the Gauhati HC challenging the TRAN-1 rejection. The HC observed that in the absence of any specific provision in the CGST Act, regarding calculation of time, the provisions of Section 9 of the General Clauses Act, is clearly applicable, which provides that if a particular time-period is given from a certain date within which an act is to be done, the day on that date is to be excluded, meaning thereby, that the period is to be calculated by excluding the day from which the period is to be reckoned.Â
Accordingly, for the expression, ‘within a period of thirty days from the appointed day’, occurring in Section 140(5) of the CGST Act, the period has to be reckoned by excluding the appointed day. The subject invoices, booked on July 31, 2017 were within the period of thirty days from the appointed day. Accordingly, the Writ was allowed.
Surendra Steels Private Limited [2024-VIL-234-GAU]
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The Petitioner had filed an Appeal before the GST Commissioner (Appeals) with a delay of 66 days. The said Appeal was rejected on the ground of limitation u/s. 107(4) of the CGST Act, which provides for a period of 30 days beyond the normal limitation for filing of Appeal within three months from the date of receipt of order.Â
Aggrieved, the Petitioner preferred a Writ Petition before the Allahabad HC, relying on the Calcutta HC judgement in RE: S.K. Chakraborty & Sons [2023-VIL-855-CAL] to argue that Section 5 of the Limitation Act, which provides for admission of Appeal in case of sufficient reason, would be attracted, as Section 107 of the CGST Act does not expressly exclude the inclusion of Section 5 of the Limitation Act.
The Allahabad HC judgment held that the judgement in RE: S.K. Chakraborty & Sons (supra) failed to adequately consider the authoritative pronouncements of the SC in the RE: Singh Enterprises [2007-VIL-02-SC-CE] and Hongo India Private Limited [2009-VIL-22-SC-CE], wherein it was held that Section 107 of the GST Act operates as a complete code in itself and specifies the limitation periods for filing appeals and implicitly excludes the application of general limitation provisions such as Section 5 of the Limitation Act. Basis the above observations, the HC dismissed the Writ filed by the Petitioner.
Yadav Steels [2024-VIL-173-ALH]Â
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The Petitioner had challenged an order of the Department, on the ground of violation of principle of natural justice. The Department had inadvertently served personal hearing notices to the Petitioner on incorrect e-mail ID.
The HC observed that the Petitioner had, much in advance brought to the notice of the Department so far as his correct email address is concerned. The HC opined that because of technicalities, the notices for personal hearing were not served upon the Petitioner and he has not been provided with a fair opportunity of personal hearing. Basis the said observation, the HC set aside the order, and directed the Respondents to grant a personal hearing opportunity.
Raghava HES Navayuga JV [2024-VIL-155-TEL]
The Finance Minister Smt. Nirmala Sitharaman commenced the Union Budget ’24 speech by highlighting the achievements of the Government in the past 10 years! With an aim to make India ‘Viksit Bharat’ by 2047, the Government is now working with an approach to development that is all-round, all-pervasive and all-inclusive. Given that the Lok Sabha elections are approaching, not much changes were expected in the tax front. Nonetheless, this Interim Budget, is a well-balanced in lines with the ‘Sabka Saath, Sabka Vikas, Sabka Vishwas’ initiative.
Attached is the detailed analysis of the Union Budget 2024-25 in association with TIOL, covering key areas of Policy Initiatives, proposals in Direct Tax, Indirect Tax, excerpts from the Industry leaders and much more…..
We hope that reading of the Newsletter on Budget would bring an enriching experience to you! Your valuable feedback is always welcome at consult@glsadvisors.com or updates@glsadvisors.com
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