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 |

Understanding the Implications of the Kerala High Court’s Decision on Extension of Limitation for Issuance of Show Cause Notice

editor — Wed, 12 Jun 2024 07:15:06 +0000

Introduction:

In a recent landmark case, Faizal Traders Private Limited v. Deputy Commissioner, Central Tax and Central Excise, Palakkad, the Hon’ble Kerala High Court deliberated on the validity of Notifications extending the period of limitation for the issuance of Show Cause Notices under Section 168A of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). This article aims to dissect the facts of the case, explore the pertinent issue, and analyze the court’s decision.

Facts of the Case:

Faizal Traders Private Limited, operating in the IHK Service to the southern railway and supplying Top-up Coupon and Recharge Coupon of M/s. BSNL as a Franchisee, contested an assessment order-in-original dated June 21, 2023 (“the Impugned Order”). The Petitioner argued that the Impugned Order was barred by limitation and challenged Notification No. 13/2022-Central Tax dated July 05, 2022, and Notification No. 09/2023-Central Tax dated March 31, 2023 (“the Impugned Notifications”), which extended the time limit for the Revenue Department to issue Show Cause Notices.

Issue:

The central issue before the court was whether the Revenue Department had the authority to issue Notifications for extending the period of limitation under Section 168A of the CGST Act due to COVID-19 for the issuance of Show Cause Notices.

Held:

The Hon’ble Kerala High Court, in WP (C) No. 24810 of 2023, upheld the validity of the Impugned Notifications and dismissed the writ petition challenging them. The court observed that the Notifications were issued by the Central Government based on the recommendations of the GST Council, considering the impact of the COVID-19 pandemic on the Department’s operations. Noting the recommendation, the court highlighted that the limitation under Section 73 of the CGST Act was extended for the FY 2017-2018 until September 30, 2023, pursuant to the powers envisaged under Section 168A of the CGST Act, 2017. The court opined that the government had the authority to extend the limitation period for conducting proceedings under Section 73 of the CGST Act through the issuance of the Impugned Notifications, considering COVID-19 as a force majeure event.

Conclusion:

The Kerala High Court’s decision in Faizal Traders Private Limited v. Deputy Commissioner, Central Tax and Central Excise, Palakkad, sets a significant precedent regarding the extension of limitation for the issuance of Show Cause Notices under the CGST Act. By upholding the validity of the Impugned Notifications, the court recognizes the exceptional circumstances posed by the COVID-19 pandemic and affirms the government’s authority to address such situations through regulatory measures.

category

Madras High Court Quashes GST Discrepancy Order

editor — Fri, 19 Apr 2024 07:07:43 +0000

Introduction

The case of Subh Sri Agencies vs Deputy State Tax Officer before the Madras High Court revolves around a discrepancy identified in GST returns and the subsequent legal proceedings initiated by the petitioner. This article aims to dissect the key aspects of the case, including the arguments presented by both parties and the pivotal judgment delivered by the High Court.

Facts of the Case

The petitioner, Subh Sri Agencies, received a show cause notice on 26.12.2022, regarding a disparity between their GSTR 1 and GSTR 3B returns. Responding to the notice on 17.03.2023, the petitioner clarified that the discrepancy arose due to an error in reflecting amounts towards CGST and SGST instead of IGST. Despite this explanation, an impugned order was issued on 09.06.2023, prompting the petitioner to seek legal recourse.

Issue

The central issue at hand was whether the petitioner’s explanation for the disparity in their tax returns was valid and whether the impugned order issued by the tax authority was justified.

Petitioner’s Argument

The petitioner contended that the disparity in their GST returns stemmed from a genuine error in reflecting amounts for CGST and SGST instead of IGST. They argued that if the correct amounts were added and compared, it would elucidate the apparent discrepancy.

Respondent’s Argument

Contrary to the petitioner’s stance, the respondent emphasized that the impugned order was issued within the stipulated timeframe and that the petitioner’s approach to the court was belated. The respondent asserted that no interference in the order was warranted.

Court Judgment

In its verdict, the Madras High Court quashed the impugned order, subject to the petitioner remitting 10% of the disputed tax demand. The Court directed the respondent to afford a reasonable opportunity to the petitioner, including a personal hearing, before issuing a fresh order.

category

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:

category

Delhi High Court Orders Refund of ₹35 Lakh to GST Petitioner, Emphasizing Voluntary Compliance and Due Process

editor — Fri, 12 Apr 2024 06:45:30 +0000

Introduction:

The Delhi High Court’s decision mandates a refund of ₹35 lakh to a GST petitioner, underscoring the significance of voluntary compliance and adherence to due process.

Facts of the Case:

Issue:

Held:

Petitioner's Argument: Citing precedent cases, the petitioner argued that the deposit was made involuntarily under coercion, warranting a refund with interest.
Respondent's Argument: The respondent contended that the deposit was voluntary and proceeded with recovery under Section 73 of the GST Act through a Show Cause Notice.
Court Judgment: The Delhi High Court ruled in favor of the petitioner, directing the refund of ₹35,00,000 with 6% interest per annum from the date of deposit. The court deemed the deposit as non-voluntary and contrary to guidelines issued by the CBIC.

category

GST Penalty Overturned by Calcutta High Court Due to Emergency Vehicle Substitution, Showcasing Compliance Flexibility

editor — Fri, 12 Apr 2024 06:23:41 +0000

Introduction:

The Calcutta High Court’s decision to quash a GST penalty related to an emergency vehicle change highlights the court’s recognition of flexibility in enforcing compliance.

Facts of the Case:

The petitioner lodged an appeal against the dismissal of their writ petition by the Calcutta HC, which was filed 20 months following an adverse order on June 14, 2022. The delay was attributed to non-receipt of the original order and the demise of the petitioner's first lawyer.
The controversy arose from a tax and penalty imposition concerning the transportation of goods without a valid e-way bill on November 20, 2021. This was due to an emergency vehicle change, preventing the timely amendment of the e-way bill.

Issue:

The central issue revolved around the justification for imposing tax and penalty for the absence of a valid e-way bill during the transportation of goods.

Held:

Petitioner's Argument: The petitioner contended that the delay in filing the writ was genuine and challenged the penalty, citing an emergency vehicle change that hindered the timely amendment of the e-way bill.
Respondent's Argument: The respondent upheld the penalty, highlighting the lack of a valid e-way bill as a compliance failure.
Court Judgment: The High Court ruled in favor of the petitioner, acknowledging the absence of intent to evade tax and the genuine circumstances causing the appeal's delay. Consequently, the tax and penalty were ordered to be revoked.
Non-resident taxpayers
Persons subject to TDS under section 51 of the CGST Act.

category

Delhi High Court Invalidates Demand Order Due to Lack of Recorded Personal Hearing

editor — Fri, 05 Apr 2024 06:05:12 +0000

The Delhi High Court recently ruled on a GST case involving Electra Power Transmission Systems and the Commissioner of Delhi Goods and Service Tax.

Facts of the Case

Held

The main issue was whether the demand was justified given the petitioner's claim of appearance and attempted compliance, marred by administrative errors.
The petitioner argued that they did attend the hearing and submitted a reply, but due to an office error, crucial documents weren't uploaded. They sought another chance to present their case fully, with all necessary documentation.
The respondent maintained that the petitioner's response was unsatisfactory and noted their absence at the hearing, justifying the demand based on procedural defaults.
The Delhi High Court set aside the impugned order and remitted the case for re-adjudication. The court instructed the petitioner to submit all relevant documents and be given another hearing. No comment was made on the merits of the arguments, preserving all rights.

category