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Bombay HC Invalidates Tax Order Without Personal Hearing

editor — Wed, 03 Apr 2024 09:35:47 +0000

In the case of Cowtown Software Design Pvt. Ltd. versus Union of India, heard in the Bombay High Court under Writ Petition (L) No. 31152 of 2023, the court addressed the crucial issue of whether the denial of a personal hearing to the petitioner by tax authorities was in compliance with Section 75(4) of the GST Laws.

Facts of the Case & Timelines:

Issue:

Petitioner’s Argument:

Respondent’s Argument:

Held:

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Decision by High Court Allows Refund of Reversed ITC When Supplier Pays Tax

editor — Tue, 02 Apr 2024 04:23:57 +0000

The Delhi High Court, in the matter of Pedersen Consultants India Pvt. Ltd. v. Union of India and Ors. [W.P. (C) 1039/2024 dated March 19, 2024], resolved the writ petition, permitting registered entities to submit refund applications for reversed Input Tax Credit (ITC) when the supplier has subsequently filed returns and paid taxes.

Facts of the case:

In the matter of Pedersen Consultants India Pvt. Ltd. v. Union of India and Ors. [W.P. (C) 1039/2024 dated March 19, 2024], the petitioner, Pedersen Consultants India Pvt. Ltd., filed a writ petition. The petition sought direction for granting Input Tax Credit (ITC) benefits on invoices where the recipient had filed subsequent returns and paid taxes.
The petitioner argued that they were compelled by the Revenue Department to pay taxes on invoices where the supplier hadn't filed returns on time. However, the supplier later filed returns and paid taxes, potentially leading to double taxation. Hence, the petitioner sought a refund for the taxes paid on such invoices.
Responding to objections, the petitioner proposed filing a refund application under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act). Additionally, they cited Notification No. 13/2022 dated July 05, 2022, advocating the exclusion of the period between March 1, 2020, and February 28, 2023, from the limitation for filing refund applications. The petitioner also requested exclusion of the period between filing the writ petition and the court's order.

Held:

The Delhi High Court, in W.P. (C) 1039/2024, dismissed the writ petition, allowing the petitioner to file a refund application under Section 54 of the CGST Act. The court directed the respondent to adjudicate the petitioner's claim in accordance with the law. Notably, the court recognized the petitioner's eligibility under the Notification, excluding the period from March 1, 2020, to February 28, 2022, for computing the limitation period for filing refund applications.

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CBIC Declares March 29-31, 2024 as Working Days for All Customs Field Formations

editor — Fri, 29 Mar 2024 07:06:36 +0000

The Central Board of Indirect Taxes and Customs (CBIC) has announced that March 29th, 30th, and 31st, 2024 will be considered as working days for all Customs field formations. This decision is communicated through a letter dated March 28, 2024, with reference number F.No.401/118/2016-Cus.III (Pt.).

All Customs field offices are required to remain operational during these days, and officers and staff are expected to report for duty as usual. It is requested that this information be disseminated among all personnel for compliance.

The directive has been issued with the approval of the relevant authority.

The full letter can be accessed at: https://www.nyca.in/wp-content/uploads/2024/03/Letter_Customs_Working_Day_280324.pdf

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CBDT notifies changes in ITR Form V and Acknowledgement for AY 2024-25

editor — Thu, 28 Mar 2024 10:28:31 +0000

The CBDT, through Notification No. 37/2024 dated March 27, 2024, has introduced revisions to the ITR form V and Acknowledgement for Assessment Year 2024-25. These changes align with amendments made in the Income Tax Act, 1961, and the Income Tax Rules, 1962, following the Finance Act, 2023.

For further details, the full notification can be viewed at: https://www.nyca.in/wp-content/uploads/2024/03/CBDT_37-2024-27.3.2024.pdf

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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.

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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.

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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.

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Madras HC Instructs Revenue Authority to Expedite GST Rectification Process

editor — Thu, 21 Mar 2024 11:24:13 +0000

In the matter of M. Venkataraj versus Assistant Commissioner (ST) [W.P. No. 18949 of 2023 dated November 8, 2023], the Honorable Madras High Court instructed the Revenue Department to address the rectification application submitted by the Petitioner within a timeframe of three months from the issuance of this order.

Facts:

The petitioner, Venkataraj, operates a business registered under the GST with the name M/s. Sri Malleswara Enterprises. The Revenue Department, also known as the Respondent, issued a Show Cause Notice under Section 74(5) of the Central Goods and Services Tax Act, 2017 (CGST Act). The notice alleged that the petitioner was liable to pay taxes under Sections 9(1) and 9(3) of the CGST Act due to the purported failure to disclose the correct turnover concerning the disposal of minerals and seigniorage fee (royalty paid to the government for mineral removal or consumption). Consequently, the Respondent proposed to demand taxes on both forward and reverse charge basis for the alleged suppression of aggregate turnover and seigniorage fees. The Petitioner contested these figures, asserting their accuracy based on the annual returns, and subsequently filed a rectification application on May 30, 2023. However, the Respondent argued that the rectification application was not submitted due to a discrepancy in the dates of receipt and application.

Held:

Upon review, the Honorable Madras High Court in W.P. No. 18949 of 2023 observed that the petitioner’s submission was limited to addressing the rectification application. Consequently, the High Court disposed of the writ petition and instructed the Respondent to address the rectification application filed by the Petitioner within three months from the date of receiving a copy of this order.

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