2026-VIL-261-GSTAT-CHD
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  2. 2026-VIL-261-GSTAT-CHD

SGST Tribunal

GST - Validity of a combined Show Cause Notice and Order-in-Original covering multiple financial years - Appellant was issued an SCN following audit and Final Audit Report covering several financial years, which was adjudicated by a consolidated Order-in-Original, and the Appellate Authority rejected the appeals filed for each financial year - Appellant contended that a separate SCN was required for each financial year and that the impugned proceedings were liable to be quashed, relying on a decision of the Hon'ble High Court at Bombay - Whether issuance of a combined SCN and Order-in-Original covering multiple financial years is legally permissible - HELD - The issue had already been dealt with at length by the Bench in an earlier order, and following that decision the contention of the Appellant is rejected - Issuance of a combined or consolidated SCN and Order-in-Original covering multiple financial years is legally valid and permissible. The proceedings are not liable to be quashed on that ground - Territorial jurisdiction of the GST authorities over tax on rental income from immovable property situated in another State - Sections 2(71) of the CGST Act, 2017 and 2(15) and 12(3) of the IGST Act, 2017 - Appellant, registered in one State, received rent for immovable property situated in another State, and a demand of GST was raised on such rental income - Appellant contended that under Section 12(3) of the IGST Act the place of supply of immovable property is the location of the property, so that the GST authorities where it is registered had no jurisdiction - Whether the demand of GST on rental income can be struck down for want of territorial jurisdiction because the property is located in another State - HELD - The location of the property determines the place of supply, but for the purpose of jurisdiction of the GST authorities it is the location of the supplier of services that is relevant. Under clause (a) of Section 2(71) of the CGST Act and Section 2(15) of the IGST Act, where a supply is made from a place of business for which registration has been obtained, the location of the supplier is the location of such place of business - The service of renting was therefore made from the Appellant's registered place of business, and the fact that the place of supply is in another State only makes the supply an inter-State supply attracting IGST without taking away the jurisdiction of the authorities with whom the Appellant is registered - The findings of the Appellate Authority are upheld and the demand cannot be struck down for want of territorial jurisdiction - Invocation of Section 74 of the CGST Act, 2017 - Appellant contested the demands on the ground that there was no fraud, wilful misstatement or suppression of facts - The SCN sought to invoke Section 74 for the freight demand, for the difference between ITC availed in Form GSTR-3B and credit available in Form GSTR-2A, and for blocked credit - Whether Section 74 could be invoked for demand of tax, recovery of credit and imposition of penalty - HELD - The foundational facts leading to the inference of fraud, wilful misrepresentation or suppression must be evident from the notice itself, and the words cannot be mechanically recited to enable recovery outside the normal limitation. The SCN contained no allegation showing how the Appellant committed fraud, made wilful misstatement or suppressed facts with intent to evade tax, since the relevant amounts were duly declared in the statutory returns on the basis of which the audit was conducted - The difference between the two returns was always apparent in the statutory returns, and the Department did not allege that the credit was availed with intent to evade tax. The Adjudicating Authority had itself recorded that the availment of credit was revenue neutral, and was therefore not justified in invoking Section 74 - Invocation of Section 74 and imposition of penalty on non-declared rental income - Explanation 2 to Section 74 of the CGST Act, 2017 - Appellant received rental income which was detected by the audit team from the Income Tax Forms and was not declared in the GST returns - Whether Section 74 is justified for demand of tax and penalty on rental income not declared in the GST returns - HELD - As per Explanation 2 to Section 74, suppression means non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under the Act or the Rules. The Appellant had not even claimed that the rental income was declared in its GST returns. The non-declaration of the receipt amounts to suppression of facts attracting Section 74 - The demand of tax and imposition of equal penalty under Section 74 are upheld, and the Appellant is liable to pay interest under Section 50 of the CGST Act - Denial of Input Tax Credit merely because invoices are not reflected in Form GSTR-2A and reversal of blocked credit - Appellant contended that the excess credit had been reversed through Form DRC-03 while filing the Annual Return, that credit cannot be denied merely because invoices are not reflected in Form GSTR-2A - The Adjudicating Authority recorded that only the integrated tax along with interest was deposited through Form DRC-03 and had appropriated it, and had made no findings on the subsequently produced invoice - HELD - ITC should be allowed if the conditions of Section 16 are fulfilled, regardless of whether it is reflected in Form GSTR-2A. The ground that credit cannot be denied where the supplier has not paid tax need not be addressed, since the SCN made no such allegation and the Adjudicating Authority did not deny the credit on that ground. There being no findings of the Adjudicating Authority on the subsequently produced invoice, the claim has to be considered on merits - The matter regarding the alleged ineligible or excess credit and the alleged blocked credit is referred back to the Adjudicating Authority to decide the admissibility of Input Tax Credit afresh.
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