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Bombay High Court Invalidates Registration Amendment Rejection: Lack of Reasons Criticized

editor — Sat, 13 Apr 2024 09:17:23 +0000

Introduction:

The Bombay High Court has invalidated the rejection of an application for registration amendment due to the lack of reasons provided for the rejection.

Facts of the case:

Issue:

Argument by the Petitioner:

Court Judgment:

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Extension of Appeal Filing Time by the Appellate Authority

editor — Fri, 12 Apr 2024 05:00:41 +0000

Introduction:

The authority of the Appellate Authority to extend the period for filing an appeal was deliberated upon in the case of Jyanata Ghosh v. State of West Bengal by the Hon’ble Calcutta High Court.

Facts of the Case:

Mr. Jyanata Ghosh, referred to as the Petitioner, received a Show Cause Notice (SCN) which lacked essential details regarding personal hearing.
Following the SCN, an Order was issued on August 11, 2023, under Section 74 of the Central Goods and Services Tax Act, 2017, demanding a significant sum from the Petitioner for a specified period.
The issuance of this order violated principles of natural justice as it did not grant the Petitioner an opportunity for personal hearing.
Challenging this order, the Petitioner appealed before the Appellate Authority under Section 107 of the CGST Act, only to have the appeal dismissed on the grounds of limitation.

Issue:

Whether the Appellate Authority possesses the jurisdiction to extend the period for filing an appeal.

Held:

The Hon’ble Calcutta High Court directed that the Appellate Authority should have granted the Petitioner a personal hearing and decided the appeal on its merits, emphasizing the violation of the principle of natural justice.
The court cited precedents such as Murtaza B Kaukawala v. State of West Bengal and S.K. Chakraborty & Sons v. Union of India, highlighting that delay can be condoned if the principles of natural justice are violated.
It was further noted that the prescribed period for filing an appeal, initially set at 30 days, can be extended by the Appellate Authority, as mandated by Section 5 of the Limitation Act, 1963.
Consequently, the court condoned the delay in filing the appeal and allowed the writ petition by setting aside the impugned order dated January 17, 2024. Additionally, it ordered a stay on the recovery proceedings pending the disposal of the appeal case, upon the Petitioner’s deposit of the pre-deposit amount, thereby disposing of the writ petition in favor of the Petitioner.

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Revenue Department is not empowered to seize Cash under GST

editor — Sat, 30 Mar 2024 10:09:45 +0000

The Delhi High Court, in the matter of Jagdish Bansal v. Union of India [W.P. (C) No. 16677 of 2023 dated February 26, 2024], granted relief to the petitioner by allowing the writ petition. The court instructed the Revenue Department to return the seized cash along with interest. The judgment emphasized that the Revenue Department lacks authority to seize cash under the applicable GST laws.

Facts of the case:

Search and seizure procedures were conducted at the premises of Jagdish Bansal, resulting in the confiscation of cash by the Revenue Department.

Displeased by this action, Jagdish Bansal filed a writ petition in the High Court, challenging the lawfulness of the cash seizure.

Issue:

The central issue at hand was whether the Revenue Department possessed the legal authority to seize cash under the GST framework.

Held:

In its ruling on W.P. (C) NO. 16677 OF 2023, the Delhi High Court made the following determinations:

Referencing the decision of the Delhi High Court in K.M Food Infrastructure Pvt Ltd Through Its Director Mukesh Kapoor Vs Director General DGGI Headquarters [W.P. (C) 328/2024 dated February 13, 2024], the court construed Section 67 of the Central Goods and Services Tax Act, 2017.
It observed that cash does not fall under the definition of goods but rather under the definition of money as outlined in Section 2(75) of the CGST Act.
The court reiterated that cash cannot be categorized as goods and therefore cannot be subject to seizure.
It concluded that there was no valid reason for the Revenue Department to retain the seized cash.
Consequently, the court deemed the impugned order as null and directed the Revenue Department to return the seized cash along with interest.

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Delhi High Court Alters Retrospective Revocation of GST Registration

editor — Thu, 28 Mar 2024 04:52:32 +0000

In the legal case of Supreme Enterprises versus Principal Commissioner of Goods and Service Tax, North Delhi, the Delhi High Court recently deliberated on the matter of retroactively canceling GST registration.

Facts of the case:

The petitioner contested an order issued on 07.07.2023, which retroactively annulled their GST registration starting from 18.01.2022. This cancellation stemmed from a show cause notice dated 06.06.2023, citing non-compliance with return filing requirements. However, the notice lacked specificity and failed to afford the petitioner adequate opportunity to respond.

The petitioner had previously sought cancellation of their GST registration multiple times due to business closure, but these requests were denied. Subsequently, they received a show cause notice lacking in detailed explanations or justifications.

The order for cancellation lacked clarity and reasoning, casting doubt on its validity. It did not sufficiently explain the grounds for cancellation or the resulting liabilities, nor did it justify the retroactive nature of the cancellation.

Held:

The court stressed that retrospective cancellation of GST registration must be grounded in objective criteria and not solely on non-compliance with return filing obligations. It recognized the significant ramifications of such cancellations for both the taxpayer and their customers, particularly concerning input tax credit.

Taking into account the petitioner’s cessation of business operations, the court amended the contested order to cancel the registration effective from the date of business closure, i.e., 26.07.2022. The petitioner was instructed to adhere to the necessary regulations outlined in Section 29 of the CGST Act, 2017.

Nevertheless, the court clarified that the authorities could still pursue steps for recovering any outstanding dues, including retrospective cancellation, in accordance with the law.

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Consolidation of Adjournment in GST Proceedings

editor — Wed, 27 Mar 2024 08:49:50 +0000

In the legal matter of Pioneer Co-Operative Car Parking Servicing and Constructions Society Ltd. against Senior Joint Commissioner [WPA No. 3092 of 2024 dated March 1, 2024] at the Calcutta High Court, the petition was resolved, establishing that an adjournment granted for Show Cause Notice (SCN) proceedings under Section 73 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) cannot be merged with an adjournment granted for other proceedings under GST.

Facts of the case:

Pioneer Co-Operative Car Parking Servicing and Constructions Society Ltd. (“the Petitioner”) is a cooperative society registered under the West Bengal Cooperative Societies Act, 1973. It operates in collecting parking fees. The Petitioner received an SCN on September 12, 2023, from the Revenue Department (“the Respondent”) under Section 73(1) of the CGST Act. The Petitioner responded to the notice. Subsequently, a Final Order dated November 6, 2023 (“the Impugned Order”) was issued, determining the tax liability under Section 73(9) of the CGST Act.

The Petitioner, dissatisfied with the Impugned Order, filed a writ petition alleging inadequate opportunity for a hearing.

Issue:

Whether adjournment granted for Show Cause Notice proceedings under Section 73 of the CGST Act can be clubbed together with adjournment granted for other proceedings under GST?

Held:

The Calcutta High Court, in the case of WPA No. 3092 of 2024, made the following determinations:

It was observed that under sub-section (5) of Section 75 of the CGST Act, the proper officer may grant adjournment upon sufficient cause shown, with written reasons. However, such adjournments should not exceed three times during the proceedings.
It was reasoned that adjournments granted to the Petitioner concerning proceedings under Section 61 of the CGST Act should not be combined with SCN proceedings. Thus, the Petitioner had adequate opportunities to respond to the SCN issued under Section 73(1) of the CGST Act.
The communication dated February 15, 2024, regarding tax recovery was deemed unsustainable and subject to annulment.
It was directed that the Petitioner must submit a response to the SCN, and the Respondent should schedule a personal hearing accordingly.

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