2026-VIL-372-MAD
  1. Home
  2. 2026-VIL-372-MAD

SGST High Court Cases

GST - Separate registrations of two verticals, Transfer of GST amount from one vertical to another - Petitioner is engaged in the sale of natural gas and the provision of transmission services for natural gas. For administrative convenience, petitioner obtained separate GST registrations for its trading and transmission verticals. The trading vertical collected the GST component on transmission charges from customers as a reimbursement of the amount paid by the transmission vertical - Revenue authorities issued a show cause notice under Section 76 of the CGST Act, alleging that petitioner had collected tax from customers but failed to remit the same to the Government - Whether the show cause notice issued under Section 76 of the CGST Act is maintainable - HELD - The Gujarat authorities had previously examined the same issue and concluded that the GST component on transmission charges was being reimbursed by the customers and that petitioner had duly paid the tax at the applicable rate. The findings recorded in the show cause notice itself indicated that the exact amount collected from customers as the GST component was paid to the government exchequer by the transmission vertical – In this case, the payment is not claimed through another distinct entity registered in another State, but rather through one in the same State. Thus, it is claimed as a payment-and-reimbursement arrangement by the same person. The Section 76 of the CGST Act, which deals with the collection of tax but non-remittance to the Government, cannot be invoked in the present case as there was no discrepancy between the amount collected and the amount remitted. The bifurcation of petitioner’s operations into separate registrations for the trading and transmission verticals was for administrative convenience and accounting clarity. The transactions between the two verticals could not be construed as transactions between two separate persons - The show cause notice was issued without proper appreciation of the facts and the applicable legal position, and accordingly, same is quashed the same – The writ petition is allowed
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTAT Appeal filed wrongly...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

Security-Code
New Code?
New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?