CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases |

Assessment Order not sustainable when vague in nature

editor — Sat, 23 Mar 2024 05:37:30 +0000

In the legal case of Rainbow Stones (P.) Ltd. versus Assistant Commissioner (ST), as documented in Writ Petition No. 4510 of 2024 dated February 26, 2024, the Madras High Court responded by granting the writ petition. This decision was based on the assertion that the Assessment Order lacked clarity and proper justification.

Facts of the case:

Rainbow Stones (P.) Ltd. initiated a writ petition contesting an assessment order issued on December 31, 2023 (referred to as “the Impugned Order”), which centered around disparities between the Input Tax Credit (ITC) claimed in GSTR-3B and that reflected under GSTR-2A. The petitioner argued that the Impugned Order, issued by the Revenue Department (referred to as “the Respondent”), lacked specificity. The sole observation noted in the Impugned Order was the rejection of the petitioner’s response.

Held:

The Madras High Court, in Writ Petition No. 4510 of 2024, overturned the Impugned Order. The court held that the order lacked specificity, which was the basis for confirming the demand for tax, interest, and penalty. The High Court directed that the matter be reconsidered and a fresh order issued after affording the petitioner a reasonable opportunity to be heard.

category

Central GST Authority cannot initiate proceedings when State GST Authority has already initiated proceedings on the same subject matter

editor — Sat, 23 Mar 2024 05:00:24 +0000

The Gauhati High Court, in the matter of Rajesh Mittal vs Union of India [WP(C) No. 371 of 2024 dated January 25, 2024], based its decision on sub-clause (b) of sub-section (2) of Section 6 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). It ordered a halt to the proceedings initiated by the Revenue Department. The court ruled that the Central GST Authority had improperly issued the Show Cause Notice (SCN) when the State GST Authorities had already issued an SCN on the same issue.

Facts of the case:

Rajesh Mittal, hereinafter referred to as "the Petitioner," was served a Show Cause Notice (SCN) by both the State GST Authorities and the Central GST Authority.
The State GST Authorities issued the SCN on December 01, 2023, while the Central GST Authority issued theirs on December 27, 2023.
The notices accused the Petitioner of wrongfully availing input tax credit (ITC), violating Section 16(4) of the Central Goods and Services Tax Act, 2017 ("the CGST Act").
The Petitioner responded to the notices accordingly.

Held:

The Gauhati High Court, in the case of WP(C) No. 371 of 2024 dated January 25, 2024, based its decision on sub-clause (b) of sub-section (2) of Section 6 of the CGST Act.

category

Prohibition of Concurrent Proceedings for the Same Period under GST Legislation

editor — Fri, 22 Mar 2024 08:15:17 +0000

Introduction:

In a significant judgment, the Hon’ble Guwahati High Court addressed the issue of whether simultaneous proceedings for the same period under both the Central Goods and Services Tax Act, 2017 (CGST Act) and the State Goods and Services Tax Act, 2017 (SGST Act) are permissible. The court, in the case of Subhash Agarwalla v. State of Assam [Case No. WP(C)/ 683/2024 dated February 12, 2024], ruled that the initiation of proceedings under either the CGST Act or the SGST Act precludes the initiation of parallel proceedings for the same period under the other act. Consequently, any order issued under one act remains suspended until the specified returnable date. This article examines the case of Subhash Agarwalla v. State of Assam, providing insights into its background, the court’s decision, and its implications for the broader landscape of GST law.

Facts:

Subhash Agarwalla (“the Petitioner”) received a Demand-cum-Show Cause Notice dated November 23, 2022 (“the Impugned SCN”) from the SGST Authority under Section 73 of the SGST Act, regarding potential liabilities for the Financial Year 2017-2018. Subsequently, another Demand-cum-Show Cause Notice dated April 27, 2023 (“the Impugned SCN”) was issued by the CGST Authority, covering the Financial Years 2017-2018, 2018-2019 & 2019-2020. Both notices alleged the improper utilization of Input Tax Credit (“ITC”) by the Petitioner, violating Section 16(4) of the CGST Act/SGST Act. Following the Impugned SCN, the CGST Authority issued an Order-in-Original on November 14, 2023 (“the Impugned Order”). Subsequently, the SGST Authority passed its own Order-in-Original on December 11, 2023 (“the Impugned Order”).

Issue:

The primary issue at hand is whether initiating two parallel proceedings for the same period is permissible under GST Law.

Held:

The Hon’ble Guwahati High Court, in Case No. WP(C)/ 683/2024, held the following:

Conclusion:

The ruling by the Guwahati High Court establishes a precedent, emphasizing the prohibition of simultaneous proceedings for the same period under the CGST and SGST Acts. This decision reflects the legislative intent to prevent redundancy and ensure an efficient adjudication process. As businesses navigate GST compliance complexities, understanding such legal nuances is crucial to mitigate unnecessary legal complications.

category

Optimizing Tax Planning with Political Party Donations

editor — Fri, 22 Mar 2024 07:21:06 +0000

The difference between tax saving and tax evasion becomes apparent when individuals seek deductions under sections 80GGB/80GGC of the Income Tax Act 1961 for contributing funds to a political party or an electoral trust.

Eligibility for Deductions

Deduction Limits

Tax Savings Example

Gross Total Income	Donation Amount	Deduction Claimed	Tax Savings
Rs. 10,00,000/-	Rs. 2,00,000/-	Rs. 2,00,000/-	Substantial

Risks of Bogus Donations

Consequences of Failure to Prove Genuineness

Steps to Prove Genuineness

Obtain Registration Certificate: Confirm party registration under section 29A.
Verify on Official Website: Check legitimacy on eci.gov.in.
Request PAN Card: Obtain PAN of the political party.
Cross-Verify Bank Details: Use cancelled cheque.
Get Stamped Receipt: Ensure a physical receipt from the party.

Supporting Documentation

Conclusion

Donating to political parties can offer tax benefits but requires careful consideration, documentation, and compliance to avoid penalties. Proper evidence is crucial to substantiate the genuineness of the transaction.

category