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GST - Denial of Input Tax Credit on account of GSTR-3B and GSTR-2A Mismatch - Reliance on mismatch without Invoice-Wise Verification - Appellant claimed Input Tax Credit pertaining to prior financial year invoices in the subsequent financial year. Revenue alleged excess Input Tax Credit based on mismatch between FORM GSTR-3B and FORM GSTR-2A without examining the Appellant's contention that the difference arose because credit pertaining to prior financial year was availed within the time permitted under Section 16(4) of the CGST Act, 2017 - Whether the difference between credit claimed in FORM GSTR-3B and credit reflected ... [Read more]

GST - Denial of Input Tax Credit on account of GSTR-3B and GSTR-2A Mismatch - Reliance on mismatch without Invoice-Wise Verification - Appellant claimed Input Tax Credit pertaining to prior financial year invoices in the subsequent financial year. Revenue alleged excess Input Tax Credit based on mismatch between FORM GSTR-3B and FORM GSTR-2A without examining the Appellant's contention that the difference arose because credit pertaining to prior financial year was availed within the time permitted under Section 16(4) of the CGST Act, 2017 - Whether the difference between credit claimed in FORM GSTR-3B and credit reflected in FORM GSTR-2A can be treated as inadmissible excess without invoice-wise verification – HELD - The statutory provision Section 16(4) as it stood for the transition period permitted a taxpayer to claim credit on prior year invoices up to the due date of the subsequent year return. FORM GSTR-2A was at the relevant time a facilitation tool and not a statutory bar to credit. The Circular No. 183/15/2022-GST specifically directs the Proper Officer to verify, not summarily disallow, cases where prior year credit has been claimed in subsequent year returns - The finding that non-appearance of an invoice in FORM GSTR-2A shows that the supplier did not pay tax is an assumption, not a finding reached after verification. The three precedents relied upon by the First Appellate Authority namely Mahalakshmi Cotton Ginning Processing and Oil Industries v. State of Maharashtra, ALD Automotive Private Limited v. CTO, and Microqual Techno Ltd. v. State of Karnataka rest on facts and statutory provisions materially different from the present case and could not have been relied upon to disallow the credit - The demand cannot be sustained as it stands without invoice-wise verification of the prior year credit - The demand for excess credit raised is not sustainable without proper invoice-wise verification and reconciliation. The matter is remanded to the Proper Officer for de novo adjudication with directions to carry out invoice-wise verification with reference to prior year records - The appeal is allowed by way of remand - Violation of Natural Justice - Mandatory personal hearing - Section 75(4) - Absence of personal hearing before confirmation of demand - The Show Cause Notice issued under Section 73 recorded the date, time and venue of personal hearing as NA and no personal hearing was granted to the Appellant before the Order-in-Original was passed confirming the entire demand - Whether the absence of a personal hearing before confirmation of demand under Section 73(9) vitiates the Order-in-Original – HELD - The Section 75(4) makes a hearing mandatory once an adverse decision is contemplated against the person, irrespective of whether a specific request for hearing was made. The absence of any such hearing before the Order-in-Original was passed is a clear infirmity - The Show Cause Notice itself records the date, time and venue of personal hearing as NA and nothing on the record shows that any hearing was in fact granted before the demand was confirmed. The absence of a personal hearing, by itself, justifies setting aside the Order-in-Original – The Appellant shall be granted a proper opportunity of personal hearing, with the date, time and venue duly communicated, and shall be permitted to produce its books of account, invoices and any further reconciliation statements, before any fresh order is passed. The issue is answered in favour of assessee - Notice under Section 61 / Form GST ASMT-10 - Scrutiny of returns - Independent provisions Section 61 and Section 73 - Absence of notice in FORM GST ASMT-10 - The Proper Officer initiated proceedings under Section 73 read with Rule 142 following an audit assignment, not pursuant to scrutiny under Section 61 - Whether the absence of a notice in FORM GST ASMT-10 under Section 61 renders proceedings initiated directly under Section 73 invalid – HELD - Section 61 and Section 73 are independent provisions. Section 61 provides one particular route for scrutiny of returns which requires a notice in FORM GST ASMT-10. Where the Proper Officer proceeds directly under Section 73 read with Rule 142 without first invoking Section 61, the absence of a FORM GST ASMT-10 notice does not, by itself, invalidate the proceedings. The present proceedings were initiated pursuant to a specific assignment under Section 73 read with Rule 142 following an audit reference, and not pursuant to scrutiny under Section 61. The decisions relied upon by the Appellant on this point are distinguishable on facts and do not invalidate the proceedings under Section 73. However, this ground does not cure the infirmities found on the prior issues which go to the root of the impugned orders. [Read less]

Central Excise - Fraudulent availment of CENVAT Credit - Documentary Evidence - The Appellant manufacturer was alleged to have fraudulently availed CENVAT credit amounting on invoices for raw materials supplied by M/s Bhiwadi Cylinders without actual receipt of goods - Department initiated proceedings based on investigations revealing that the ultimate vendor M/s MAI had not maintained manufacturing facility and had issued invoices without receiving raw materials. Appellant furnished Goods Receipts from the transporter showing delivery to its factory and entries in RG 23A Part-II register showing receipt and usage of the r... [Read more]

Central Excise - Fraudulent availment of CENVAT Credit - Documentary Evidence - The Appellant manufacturer was alleged to have fraudulently availed CENVAT credit amounting on invoices for raw materials supplied by M/s Bhiwadi Cylinders without actual receipt of goods - Department initiated proceedings based on investigations revealing that the ultimate vendor M/s MAI had not maintained manufacturing facility and had issued invoices without receiving raw materials. Appellant furnished Goods Receipts from the transporter showing delivery to its factory and entries in RG 23A Part-II register showing receipt and usage of the raw materials - Whether the Appellant's CENVAT credit should be disallowed on the basis of third-party data and oral statements from investigation when the Appellant produced documentary evidence supporting receipt and usage of goods – HELD - The Appellant had placed sufficient documentary evidence including Goods Receipts from the transporter and RG 23A records establishing receipt of raw materials. The Department had not produced any credible evidence except oral statements recorded during investigation and as per the Indian Evidence Act documentary evidence must prevail over oral evidence - Department had not conducted enquiry from the Appellant or searched its premises and had not followed compliance under Section 9D of the Central Excise Act necessary for admissibility of oral evidence. The burden of proof was on the Department to establish fraudulent availment which stood falsified by the documentary evidence produced by the appellant - The order disallowing the CENVAT credit is set aside and the appeal is allowed [Read less]

Service Tax - Adjustment of excess Service Tax Paid - Succeeding Month or Quarter - Rule 6(4A) of Service Tax Rules - Appellant availed CENVAT credit on service tax paid under Reverse Charge Mechanism on services received from foreign service providers and had made advance tax payments which were utilized against its liability in succeeding years - Department disallowed the adjustment contending that under Rule 6(4A) of the Service Tax Rules such adjustments of excess payment could be made only during the immediate succeeding month or quarter - Whether the adjustment of excess advance service tax paid could be made to a su... [Read more]

Service Tax - Adjustment of excess Service Tax Paid - Succeeding Month or Quarter - Rule 6(4A) of Service Tax Rules - Appellant availed CENVAT credit on service tax paid under Reverse Charge Mechanism on services received from foreign service providers and had made advance tax payments which were utilized against its liability in succeeding years - Department disallowed the adjustment contending that under Rule 6(4A) of the Service Tax Rules such adjustments of excess payment could be made only during the immediate succeeding month or quarter - Whether the adjustment of excess advance service tax paid could be made to a subsequent month or quarter beyond the immediate succeeding month or quarter under Rule 6(4A) of Service Tax Rules – HELD - The Rule 6(4A) does not contain the word immediate and the plain reading of the Rule allows an assessee to adjust the excess amount paid against service tax liability for the succeeding month or quarter. If adjustment could be made only in the immediate succeeding month or quarter, a situation would arise where an assessee has no service tax liability in that immediate period or excess paid is higher than the immediate period's liability making the Rule provision impractical. The Rule intends an assessee to adjust excess payment to liability accrued later thereby avoiding hassles of refund claims and since the excess amount is already in the hands of the Revenue there is no revenue loss in such adjustment and the Revenue is enriched by the interest on the excess amount till adjustment - The adjustment of excess service tax can be made not only in subsequent month or quarter but also in subsequent months or quarters - The impugned order is set aside and the appeals are allowed [Read less]

GST - Cancellation of GST Registration - Opportunity of Hearing and Procedural Defect - Fixing date of hearing before show cause period expires - The date for personal hearing was fixed on 05.03.2024 while the date for filing show cause was 07.03.2024, meaning the hearing was fixed prior to show cause period expiring. Appellant did not submit show cause response and registration was cancelled ex-parte by order dated 22.04.2024 - Whether proper opportunity of hearing was granted as required under Section 75(4) of CGST Act, 2017 which provides that opportunity of hearing shall be granted where adverse decision is contemplate... [Read more]

GST - Cancellation of GST Registration - Opportunity of Hearing and Procedural Defect - Fixing date of hearing before show cause period expires - The date for personal hearing was fixed on 05.03.2024 while the date for filing show cause was 07.03.2024, meaning the hearing was fixed prior to show cause period expiring. Appellant did not submit show cause response and registration was cancelled ex-parte by order dated 22.04.2024 - Whether proper opportunity of hearing was granted as required under Section 75(4) of CGST Act, 2017 which provides that opportunity of hearing shall be granted where adverse decision is contemplated against person – HELD - As per Section 75(4), opportunity of hearing is required to be fixed only where adverse decision is contemplated against person. When no show cause is filed within given period of 30 days, date of hearing is required to be fixed thereafter or in case show cause is filed but authorities not satisfied then date for hearing is required to be fixed. Fixing date of hearing on 05.03.2024 while show cause filing period was 07.03.2024 was an empty formality and procedurally defective - Permanent cancellation of registration inflicts civil death to livelihood of person. The impugned orders are set aside and competent authority shall consider application for revocation on its own merit without rejecting it on limitation ground alone – The writ application stands allowed [Read less]

Service Tax - Classification of services rendered by shipping agents and freight forwarders - Distinction between taxable support services and non-taxable transportation - Appellant raises invoices on customers including freight component with mark-up along with ancillary charges such as LCL charges, documentation charges, terminal handling charges and delivery order charges - Appellant discharges service tax on ancillary charges but not on ocean/air freight in the belief that the same was not taxable/exempt during the relevant period - Respondent alleges that mark-up charged by appellant on freight charged by shipping com... [Read more]

Service Tax - Classification of services rendered by shipping agents and freight forwarders - Distinction between taxable support services and non-taxable transportation - Appellant raises invoices on customers including freight component with mark-up along with ancillary charges such as LCL charges, documentation charges, terminal handling charges and delivery order charges - Appellant discharges service tax on ancillary charges but not on ocean/air freight in the belief that the same was not taxable/exempt during the relevant period - Respondent alleges that mark-up charged by appellant on freight charged by shipping companies constitutes consideration for taxable service classified - Whether freight component recovered by appellant on principal-to-principal basis with a commercial mark-up constitutes taxable consideration for Business Support Service - HELD - Prior to 01.07.2012 transportation of goods by vessel or aircraft from place outside India to customs station in India did not fall within definition of taxable service - With effect from 01.07.2012 the activity stood expressly excluded by Section 66D(p)(ii) of negative list and continued till its omission with effect from 01.06.2016 - Freight component paid by appellant to shipping lines and airlines recovered from its customers therefore represents consideration for an activity which statute itself has by deliberate design kept outside tax net throughout the period in question. Where principal activity is non-taxable by legislative design the profit or margin earned in course of that very activity cannot be severed and taxed as if it were consideration for distinct service - Rule 5 of Valuation Rules cannot itself be source of taxability nor can it convert non-taxable transaction into taxable one merely because person recovering amount fails to qualify as pure agent - Classification and taxability of activity must be determined with reference to its substance and charging provisions applicable to it not with reference to manner of billing or presence of margin - The mark-up earned by Custom House agent or freight forwarder on ocean or air freight recovered on principal-to-principal basis does not constitute consideration for business support service – The invocation of extended period of limitation is not justified as issue involved is interpretational dispute and ingredients of fraud collusion wilful misstatement or suppression with intent to evade tax are not established - Demand of service tax on freight/mark-up amount for entire period is set aside - Impugned order is set aside and appeal is allowed [Read less]

GST - Refund of Pre-deposit to the extent of dropped demand - Finality of Appellate Proceedings - Scope of Circular No. 125/44/2019-GST - The Adjudicating Authority assessed tax liability which was challenged before the First Appellate Authority who partly allowed the appeal and dropped demand to the extent of 64 percent - Petitioner filed a refund application seeking refund of pre-deposit to the extent of demand dropped - Refund Authority relied on Circular No. 125/44/2019-GST dated 18.11.2019 and rejected the refund application on the ground that the appellate proceedings have not attained finality as the petitioner had ... [Read more]

GST - Refund of Pre-deposit to the extent of dropped demand - Finality of Appellate Proceedings - Scope of Circular No. 125/44/2019-GST - The Adjudicating Authority assessed tax liability which was challenged before the First Appellate Authority who partly allowed the appeal and dropped demand to the extent of 64 percent - Petitioner filed a refund application seeking refund of pre-deposit to the extent of demand dropped - Refund Authority relied on Circular No. 125/44/2019-GST dated 18.11.2019 and rejected the refund application on the ground that the appellate proceedings have not attained finality as the petitioner had expressed intention to challenge the appellate order before the GST Appellate Tribunal – Whether the Petitioner is entitled to refund of pre-deposit to the extent of demand dropped when the Petitioner proposes to challenge only the part of order which has gone against it and proceedings have attained finality to the extent of dropped demand - HELD - The reasoning in the impugned order that proceedings have not attained finality is erroneous as proceedings have attained finality to the extent of the demand dropped. The authority ought to have kept in mind that the petitioner proposes to challenge only that part of the order which has gone against it and to the extent of dropped demand the proceedings have attained finality. The reasoning that proceedings have not attained finality merely because the Petitioner proposes to challenge the part which has gone against it is fallacious - The Petitioner would be squarely covered by Circular dated 18th November, 2019 as refund of pre-deposit is admissible in respect of the dropped demand which has attained finality. Once the demand stood set aside a statutory right accrued in favour of the Petitioner to receive refund of the amount paid towards pre-deposit - The Order-in-Appeal is binding on the Respondent under Section 107(16) of the CGST Act, 2017 and therefore Respondent cannot refuse consequential refund of pre-deposit attributable to the demand set aside - The continued retention of such amount is wholly unauthorized and offends Article 265 of the Constitution - Pre-deposit bears the character only of a security deposit being a statutory condition precedent for hearing of the appeal and needs to be returned to the appellant whether the appellant succeeds fully or partly. The impugned order is quashed and set aside with direction to process the refund application expeditiously – The writ petition is allowed [Read less]

GST - Denial of Input Tax Credit to bona fide purchaser for default of supplier - Appellant was denied Input Tax Credit on the ground that suppliers had not deposited tax and had not filed GSTR-3B and invoices were not reflected in GSTR-2A of recipients - Whether Input Tax Credit can be denied to bonafide purchaser for default of supplier in depositing tax / non-filing of GSTR-3B / non-reflection of invoice in GSTR-2A - HELD - A bona fide purchaser who has received tax invoices from registered suppliers cannot be denied ITC merely because the supplier has defaulted in depositing tax or filing GSTR-3B - The conditions under... [Read more]

GST - Denial of Input Tax Credit to bona fide purchaser for default of supplier - Appellant was denied Input Tax Credit on the ground that suppliers had not deposited tax and had not filed GSTR-3B and invoices were not reflected in GSTR-2A of recipients - Whether Input Tax Credit can be denied to bonafide purchaser for default of supplier in depositing tax / non-filing of GSTR-3B / non-reflection of invoice in GSTR-2A - HELD - A bona fide purchaser who has received tax invoices from registered suppliers cannot be denied ITC merely because the supplier has defaulted in depositing tax or filing GSTR-3B - The conditions under Section 16(2)(a) and 16(2)(b) of CGST Act, 2017 are satisfied when purchaser is in possession of tax invoice issued by supplier registered under Act and has received goods or services - The only dispute under Section 16(2)(c) is whether tax charged has actually been paid to Government. The Department itself admits that proceedings have been initiated against defaulting supplier for non-filing of GSTR-3B. Having done so Department cannot doubly recover once from supplier and again from recipients - Department must first proceed for recovery against defaulting supplier under Section 79 of CGST Act. Mere non-reflection of invoices in GSTR-2A cannot by itself lead to automatic denial of Input Tax Credit to bona fide purchaser - The principle laid down in Suncraft Energy Private Limited which has been affirmed by Supreme Court squarely applies to facts of present case – Further, the Section 74 cannot be invoked mechanically merely to cover up the limitation under Section 73(10). The SCN must specifically allege how fraud was inferred or how concealment was detected - Bare invocation of words fraud willful misstatement and suppression of facts without listing out reasons is not sufficient to invoke extended limitation – The impugned is quashed and set aside and Respondents are directed to revisit issue by reconsidering reply with all documents in light of judgments in Suncraft Energy case - Respondent shall pass a reasoned and speaking order in accordance with law after affording opportunity of personal hearing to petitioners – The writ petition is allowed [Read less]

GST - Issuance of Show Cause Notice in the name of a deceased person - Assessment of tax liability of a deceased person - Appellant issued Show Cause Notice and Order in Original against a deceased proprietor instead of his legal heirs determining tax demand - Whether a Show Cause Notice can be issued in the name of a deceased person for determination of tax liability - HELD - It is a well settled proposition of law that issuance of a notice in the name of a dead person is a nullity non est and void ab initio in the eye of law - A SCN cannot be issued in the name of a dead person for determination of the liability of the d... [Read more]

GST - Issuance of Show Cause Notice in the name of a deceased person - Assessment of tax liability of a deceased person - Appellant issued Show Cause Notice and Order in Original against a deceased proprietor instead of his legal heirs determining tax demand - Whether a Show Cause Notice can be issued in the name of a deceased person for determination of tax liability - HELD - It is a well settled proposition of law that issuance of a notice in the name of a dead person is a nullity non est and void ab initio in the eye of law - A SCN cannot be issued in the name of a dead person for determination of the liability of the deceased without giving an opportunity to the legal representative - The determination of taxes in the name of a non-existing entity or person is not legally permissible and stands vitiated - Section 93(1) is a charging provision which says legal heirs is liable to pay tax due from deceased to the extent estate capable but it does not provide machinery to determine such liability - The machinery for determination remains Section 73 and 74 which require issuance of show cause notice to the person liable - Therefore the correct machinery is to issue Show Cause Notice to legal heirs in their own name describing them as legal heirs of deceased and to determine the liability - Department cannot issue Show Cause Notice to deceased and then direct the legal heirs to give reply to the same - The Show Cause Notice and Order in Original and the recovery notice are quashed and set aside - the writ petition stands disposed of without going into the merits of the case [Read less]

Central Excise - Refund of Education Cess and Secondary and Higher Education Cess - Scope of Section 11B of the Central Excise Act, 1944 - Applicability to amounts paid without authority of law - Appellant rejected refund claims for EC and SHEC that respondents had mistakenly paid for the period October 2013 to June 2017 on crude oil produced under NELP blocks arguing that the refund claims were barred by the limitation period prescribed in Section 11B of the Act, which prescribes a one year period for claiming refund from the relevant date - Whether the time limit prescribed in Section 11B of the Central Excise Act, 1944 ... [Read more]

Central Excise - Refund of Education Cess and Secondary and Higher Education Cess - Scope of Section 11B of the Central Excise Act, 1944 - Applicability to amounts paid without authority of law - Appellant rejected refund claims for EC and SHEC that respondents had mistakenly paid for the period October 2013 to June 2017 on crude oil produced under NELP blocks arguing that the refund claims were barred by the limitation period prescribed in Section 11B of the Act, which prescribes a one year period for claiming refund from the relevant date - Whether the time limit prescribed in Section 11B of the Central Excise Act, 1944 applies to refund claims for EC and SHEC when the same were paid by mistake and do not constitute duties of excise - HELD - Section 11B of the Act prescribes limitation for refund of duty of excise and interest and does not refer to other amounts collected without authority of law - EC and SHEC are not duties of excise as they are levied on the aggregate of excise duties and are not calculated as excise duty proper - The amount paid as EC and SHEC on Oil Industry Development Cess does not take the character of duty of excise but is simply an amount paid under a mistake of law - The provisions of Section 11B of the Act would therefore not be applicable to an application seeking refund of EC and SHEC paid under mistake - Since EC and SHEC are not duties of excise, the limitation prescribed under Section 11B of the Act would not apply and the general provisions under the Limitation Act, 1963 would be applicable - Section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake or could with reasonable diligence have discovered it - The retention of EC and SHEC which have been paid on a mistaken notion by the respondents without any authority of law is not permitted under Article 265 of the Constitution which provides that no tax shall be levied or collected except by authority of law - A mistake does not confer any right on any party and can be corrected - Section 11B of the CEA, 1944 cannot be a bar to refund the EC and SHEC that has been paid mistakenly by the respondents to the appellant - The Revenue appeals are dismissed [Read less]

GST - Transportation of goods without E-Way Bill - Substantive non-compliance versus procedural lapse - During transportation of iron goods under tax invoice, the vehicle was intercepted by Mobile Squad. As E-Way Bill was not available with the driver at that time, tax and an equal penalty were imposed under Section 129(3) of CGST Act - Whether the absence of E-Way Bill at the time of interception constitutes substantive non-compliance establishing intention to evade tax, or whether it is merely a procedural lapse that can be cured by subsequent production of E-Way Bill - HELD - It is an admitted fact that no E-Way accompa... [Read more]

GST - Transportation of goods without E-Way Bill - Substantive non-compliance versus procedural lapse - During transportation of iron goods under tax invoice, the vehicle was intercepted by Mobile Squad. As E-Way Bill was not available with the driver at that time, tax and an equal penalty were imposed under Section 129(3) of CGST Act - Whether the absence of E-Way Bill at the time of interception constitutes substantive non-compliance establishing intention to evade tax, or whether it is merely a procedural lapse that can be cured by subsequent production of E-Way Bill - HELD - It is an admitted fact that no E-Way accompanied the goods at the time of transportation. The requirement of carrying an E-Way Bill during transportation is mandatory under Rule 138(1) of the GST Rules. The E-Way Bill is an integral part of the statutory mechanism for monitoring movement of taxable goods. The non-generation of an E-Way Bill leaves scope for subsequent manipulation of the books of accounts at the convenience of the taxpayer - The E-way bill generation is an online process, whereas the tax-invoice is issued manually by the taxpayer. If the trader generated the E-way bill online, it would have appeared in his outward supply records preventing him from manipulating his books of accounts at his convenience. This fact established the trader's intention to evade tax - Transportation of goods without an E-Way Bill constitutes substantive non-compliance and establishes an intention to evade tax - The original order passed under Section 129(3) imposing tax and penalty is restored - The appeal filed by the revenue is allowed [Read less]

GST - Interlocutory Applications for early hearing of appeals - The appellants filed 21 appeals before the Tribunal claiming refund involving a huge sum of money. The appellants contended that the pendency of such appeals is likely to prejudice their financial interest and urged the tribunal to hear those appeals on priority basis for ends of justice - HELD - Each of the 21 interlocutory applications have been supported by affidavit sworn by the authorized signatory of the appellants and the applications include all the information prescribed in GSTAT FORM-01. The appellants have contended that if their appeals claiming re... [Read more]

GST - Interlocutory Applications for early hearing of appeals - The appellants filed 21 appeals before the Tribunal claiming refund involving a huge sum of money. The appellants contended that the pendency of such appeals is likely to prejudice their financial interest and urged the tribunal to hear those appeals on priority basis for ends of justice - HELD - Each of the 21 interlocutory applications have been supported by affidavit sworn by the authorized signatory of the appellants and the applications include all the information prescribed in GSTAT FORM-01. The appellants have contended that if their appeals claiming refund are not heard on priority basis, they are likely to suffer from huge financial loss - All the 21 appeals are listed together after three weeks for hearing. The interlocutory applications for early hearing are allowed [Read less]

GST – Allegation of reuse of e-Way Bill based on presumption - Reuse of E-Way Bills - During transportation of goods by vehicle, the goods were checked at 01:27 p.m. and again at the same location at 09:52 p.m. on the same day. The officer of Mobile Squad drew inference that the papers were being reused for another transaction to evade tax. A demand including penalties was created - Whether goods can be presumed to be re-transported and liable to penalty on the sole basis of an inference drawn from earlier verification of E-Way Bill without cogent evidence of actual re-transportation - HELD - The finding that the goods w... [Read more]

GST – Allegation of reuse of e-Way Bill based on presumption - Reuse of E-Way Bills - During transportation of goods by vehicle, the goods were checked at 01:27 p.m. and again at the same location at 09:52 p.m. on the same day. The officer of Mobile Squad drew inference that the papers were being reused for another transaction to evade tax. A demand including penalties was created - Whether goods can be presumed to be re-transported and liable to penalty on the sole basis of an inference drawn from earlier verification of E-Way Bill without cogent evidence of actual re-transportation - HELD - The finding that the goods were being “re-transported” is based principally on an inference from the earlier verification of the E-Way Bill. No independent and cogent evidence has been produced to establish that the same goods had already completed an earlier journey and had been delivered - The facts on record do not establish any discrepancy in description, quantity, value or ownership of goods. The goods were accompanied by relevant tax documents including invoice, e-invoice and E-Way Bill. It is settled law that presumption cannot take the place of evidence - Department has not established any cogent material such as crossing of a toll plaza during course of transportation that goods actually underwent an earlier completed transportation or that same goods were being re-transported. The respondent failed to establish that the bill for repairing the concerned vehicle is fake or forged - The appellate order and the original order passed under Section 129 are set aside. The amount deposited by the appellant is refunded in accordance with law – The appeal is allowed [Read less]

Customs duty on pilfered goods - Custody of imported goods under Major Port Trusts Act and Customs Act - Interaction between saving clause in Section 45(1) and non obstante clause in Section 45(3) of Customs Act - Whether the Notification dated 11.10.2000 approving respondent-Port Trust as the custodian of the notified customs area under Section 45(1) of the Customs Act is valid and consequently whether liability for pilfered goods could be fastened on the respondent in terms of Section 45(3) of the Customs Act - HELD - The saving clause in Section 45(1) operates only where another law for the time being in force itself fa... [Read more]

Customs duty on pilfered goods - Custody of imported goods under Major Port Trusts Act and Customs Act - Interaction between saving clause in Section 45(1) and non obstante clause in Section 45(3) of Customs Act - Whether the Notification dated 11.10.2000 approving respondent-Port Trust as the custodian of the notified customs area under Section 45(1) of the Customs Act is valid and consequently whether liability for pilfered goods could be fastened on the respondent in terms of Section 45(3) of the Customs Act - HELD - The saving clause in Section 45(1) operates only where another law for the time being in force itself fastens liability in respect of pilfered goods upon the custodian. The Major Port Trusts Act does not create any specific liability on the Port Trust for customs duty on pilfered goods and deals only with the bailee's civil liability towards the owner of goods under Sections 42 and 43 thereof - The liability under Section 43 of the Major Port Trusts Act is fundamentally different from the liability created under Section 45(3) of the Customs Act - Section 45(3), inserted by Act 22 of 1995 with effect from 26.05.1995, deliberately employed a non obstante clause so as to give it an overriding effect to the liability created thereunder, notwithstanding the saving clause contained in sub-section (1). The expression used in the non obstante clause, notwithstanding anything contained in any law for the time being in force, necessarily includes the Major Port Trusts Act. Pilferage of goods is distinct from general loss or destruction of goods - Section 13 of the Customs Act absolves the importer from liability in respect of pilfered goods, and it is precisely to address the lacuna that Parliament introduced sub-section (3) of Section 45, thereby fastening the liability to pay duty on the person approved under sub-section (1). Section 45(2) of the Customs Act imposes statutory duties upon the custodian to maintain proper records and prevent removal of goods except with permission of proper officer, regardless of the legal source of custody. Pilferage is a consequence of breach of these statutory obligations, and it is for this reason that liability is fastened on the approved custodian for pilfered goods. The Commissioner of Customs was fully justified in issuing the Notification dated 11.10.2000 approving the respondent-Port Trust as custodian under Section 45(1) of the Customs Act. There is no conflict between Section 45 of the Customs Act and Sections 42 and 43 of the Major Port Trusts Act - The fact that the Board may have contractual or statutory rights of indemnity or recovery against another person responsible for the loss does not detract from its primary statutory liability under Section 45(3) of the Customs Act to discharge the customs duty payable to the revenue - The Notification dated 11.10.2000 issued by the Commissioner of Customs (Import) in exercise of the powers conferred under Section 45(1) of the Customs Act is valid. The impugned judgment of the High Court to the extent it held otherwise and quashed the said Notification is set aside - The challenge to the show cause-cum-demand notices pertaining to the period prior to the date of the Notification dated 11.10.2000 is not pressed by appellants as no liability under Section 45(3) could have arisen in the absence of an approval under Section 45(1). Accordingly, the impugned judgment to the extent it quashed the show cause-cum-demand notices prior to 11.10.2000 is not interfered with. The appeal is disposed of accordingly [Read less]

Customs - Detention and seizure of imported vehicle - Distinction between detention and seizure under Customs Act - Petitioner purchased a Toyota Land Cruiser and upon arrival, Bill of Entry was filed with assessable value of 54,000 USD. The petitioner paid applicable customs duty - DRI conducted a search at residential premises and prepared a Panchnama directing petitioner not to deal with the car. A seizure memo under Section 110(1) was issued only on 17.04.2026, i.e., after more than one year, and thereafter show-cause notice was issued on 08.05.2026 under Section 124 of the Act - Whether detention of goods without a pr... [Read more]

Customs - Detention and seizure of imported vehicle - Distinction between detention and seizure under Customs Act - Petitioner purchased a Toyota Land Cruiser and upon arrival, Bill of Entry was filed with assessable value of 54,000 USD. The petitioner paid applicable customs duty - DRI conducted a search at residential premises and prepared a Panchnama directing petitioner not to deal with the car. A seizure memo under Section 110(1) was issued only on 17.04.2026, i.e., after more than one year, and thereafter show-cause notice was issued on 08.05.2026 under Section 124 of the Act - Whether detention of goods without a proper seizure order under Section 110(1) is valid and whether the limitation period under Section 110(2) for issuance of show cause notice applies from the date of detention or from the date of formal seizure order - HELD - Section 110 of the Customs Act uses the expression "reason to believe" that any goods are liable to confiscation, the proper officer may seize the goods. The first proviso uses the expression "where it is not practicable to remove, transport, the proper officer may give custody on execution of an undertaking". The second proviso further mentions "where it is not practicable to seize the goods". In either scenario, the proper officer is legally bound to satisfy a two-fold statutory obligation before passing a seizure order: first, he must explicitly record reasons that the goods are liable for confiscation, and second, he must record clear satisfaction by passing the order regarding the nature of goods under the respective provisos - The Panchnama cannot satisfy the ingredients of Section 110 of the Act, and an order is mandatory under the proviso to Section 110 for paving way for issuance of notice under Section 124 within a period of six months unless extended. The proper officer cannot consume a considerable period, such as over one year, to pass the seizure order under Section 110(1) after Panchnama was prepared by continuing the detention of the vehicle. When the seizure memo travels beyond the period of one year, the time limit of six months as mentioned in Section 110(2) and the further period of six months as envisaged under the proviso to sub-section (2) of Section 110 will get consumed – The respondents have detained the car vide Panchnama dated 07.02.2025, and in fact the seizure order under Section 110(1) has been passed after a period of one year on 17.04.2026, and in order to escape the limitation of six months, the Notice for confiscation under Section 124(a) of the Act has been issued on 08.05.2026. The order of provisional release dated 18.05.2026 is also illegal, as the conditions mentioned are premised on paragraph No. 2 of Circular No. 35/2017 dated 16.08.2017, which has been struck down by the Delhi High Court - The respondents are directed to release the vehicle. Costs of 10,000 rupees are imposed on the respondents – The petition is allowed [Read less]

Service Tax - Export of services, Services provided by e-commerce marketplace operator to foreign affiliate - Determination of location of service use - Appellant provides services to affiliate eBay International AG such as promotion coordination with vendors marketing market data collection remittance of revenue operation of helpdesk and other administrative services for eBay India website - Appellant contends that services qualify as export since they are provided to recipient located outside India and payment received in foreign exchange and benefit of services accrue to foreign affiliate - Whether services provided in ... [Read more]

Service Tax - Export of services, Services provided by e-commerce marketplace operator to foreign affiliate - Determination of location of service use - Appellant provides services to affiliate eBay International AG such as promotion coordination with vendors marketing market data collection remittance of revenue operation of helpdesk and other administrative services for eBay India website - Appellant contends that services qualify as export since they are provided to recipient located outside India and payment received in foreign exchange and benefit of services accrue to foreign affiliate - Whether services provided in relation to business activities in India for foreign affiliate constitute export of services - HELD - Export of Services Rules 2005 provides three categories of services - Category I applies to services with nexus to immovable property - Category II applies to services where place of performance can be established - Category III applies to remaining services generally including knowledge or technique based services not linked to identifiable immovable property or whose location of performance cannot be readily identified - For Category III services which include BAS the relevant factor is location of service receiver and not place of performance. For Category III services export of service may take place even when all relevant activities take place in India so long as benefits of these services accrue outside India - Board's circular dated 24.02.2009 clarifies that for Category III services the phrase used outside India is to be interpreted to mean that benefit of service should accrue outside India - Board's circular dated 13.05.2011 further clarified that words accrual of benefit are not restricted to mere impact on bottom-line of person who pays for service. All activities extended by appellant to foreign subsidiary including marketing research consultancy promotion of sales through advertisement take place in India. Appellant did not conduct any market research or activity outside India while providing BAS – The services failed to satisfy essential qualification of service being delivered and used outside India. However Revenue concluded that services provided were not export of services they were provided within taxable territory in India. In absence of any notice for recovery of service tax due from appellant in respect of services not considered to be export of services in appropriate proceedings the refund claims filed in terms of Rule 5 of CCR, 2004 cannot be rejected. Revenue cannot have two stands in respect of same services - If Revenue's case is that activities undertaken do not amount to export of service then proceedings need to be initiated for demanding service tax in respect of taxable services provided. By not initiating any such proceedings, Revenue itself has allowed these taxable services as export of services. Having done so Revenue cannot in proceeding under Rule 5 for refund take contrary stand and deny refund treating services not to be export of services - Impugned order is set aside and appeals are allowed [Read less]

GST - Writ Appeal against dismissal of Writ Petition - Assessment order challenge - Appellant filed a writ petition challenging the assessment order. The Writ Court dismissed the Writ Petition and granted liberty to file appeal against the assessment order - Whether the direction under order dismissing the writ petition would be effective with the observations on merits made by the Writ Court or whether clarification is needed that those observations would not influence the appellate authority's decision - HELD - The appellant does not very seriously object to the conclusion of the Writ Court directing them to file an appe... [Read more]

GST - Writ Appeal against dismissal of Writ Petition - Assessment order challenge - Appellant filed a writ petition challenging the assessment order. The Writ Court dismissed the Writ Petition and granted liberty to file appeal against the assessment order - Whether the direction under order dismissing the writ petition would be effective with the observations on merits made by the Writ Court or whether clarification is needed that those observations would not influence the appellate authority's decision - HELD - The appellant does not very seriously object to the conclusion of the Writ Court directing them to file an appeal. In order that the direction be effective, it is necessary that the observations on merits made by the Writ Court are set aside or at least a direction given to the appellate authority that those observations would not influence the decision in appeal - The direction under order dated 08.06.2026 relegating the appellant to appellate remedy is confirmed with clarification that the observations of the Writ Court on the merits of the assessment shall not stand in the way of an independent adjudication of the appeal in accordance with law - The Writ Appeal is dismissed [Read less]

GST - Imposition of penalty not proposed in show cause notice - Confusion of penalties between taxpayer and handler/operator - Show cause notice proposed penalty against the petitioner under Section 122(1)(ii) and 122(1)(vii) of the CGST Act. A separate penalty under Section 122(1A) was specifically proposed against the handler/operator. However, in the impugned order, the adjudicating authority has imposed both the penalties including that of the handler/operator under Section 122(1A) on the petitioner, which was never proposed in the show cause notice - Whether the penalty imposed on the petitioner is in accordance with ... [Read more]

GST - Imposition of penalty not proposed in show cause notice - Confusion of penalties between taxpayer and handler/operator - Show cause notice proposed penalty against the petitioner under Section 122(1)(ii) and 122(1)(vii) of the CGST Act. A separate penalty under Section 122(1A) was specifically proposed against the handler/operator. However, in the impugned order, the adjudicating authority has imposed both the penalties including that of the handler/operator under Section 122(1A) on the petitioner, which was never proposed in the show cause notice - Whether the penalty imposed on the petitioner is in accordance with the show cause notice and whether the petitioner is liable for penalties never proposed against him. - HELD - The show cause notice specifically proposed separate penalty on the handler/operator under Section 122(1A) of the CGST Act. However, in the impugned order in original, the adjudicating authority has imposed both the penalties including that of the handler/operator under Section 122(1A) on the petitioner - The respondents have not specifically controverted the facts of mixing up the proposed penalties as specified in show-cause notice while passing the final order in the case of the petitioner. In the similar matter of the handler/operator, this Court has set aside the impugned order of penalty and matter is remanded to the respondent authorities for fresh consideration - The impugned order is quashed and set aside. The matter is remanded back to the adjudicating authority to pass a fresh order, after hearing the petitioner – The petition is disposed of [Read less]

Customs - Judicial Review of Settlement Commission Order - Challenge to Show Cause Notice on Ground of Limitation after Settlement - Petitioner filed application before Settlement Commission for settlement of proceedings arising from Show Cause Notice demanding duty along with interest. Instead of pursuing statutory appellate remedy against adjudication order petitioner consciously elected to invoke jurisdiction of Settlement Commission. Settlement Commission passed order determining duty liability at reduced amount - Settlement Commission directed jurisdictional Commissioner to verify and quantify interest liability and i... [Read more]

Customs - Judicial Review of Settlement Commission Order - Challenge to Show Cause Notice on Ground of Limitation after Settlement - Petitioner filed application before Settlement Commission for settlement of proceedings arising from Show Cause Notice demanding duty along with interest. Instead of pursuing statutory appellate remedy against adjudication order petitioner consciously elected to invoke jurisdiction of Settlement Commission. Settlement Commission passed order determining duty liability at reduced amount - Settlement Commission directed jurisdictional Commissioner to verify and quantify interest liability and intimate Petitioner if further amount was payable. Subsequently, interest was quantified at higher amount. Petitioner challenged order of Settlement Commission seeking to set aside interest direction from remaining part of order and challenged validity of Show Cause Notice on ground of limitation – HELD - The scope of judicial review over orders of Settlement Commission is narrow and restricted to grounds such as contravention of statutory provisions, prejudice, fraud, bias or malice. Sufficiency of material placed before Settlement Commission and conclusions drawn therefrom ordinarily fall outside scope of judicial review - Once Petitioner consciously invoked jurisdiction of Settlement Commission and had settlement order passed, they cannot thereafter reopen validity of underlying Show Cause Notice by challenging it on ground of limitation. Petitioner cannot isolate direction regarding interest computation and under guise of challenging interest determination reopen validity of Show Cause Notice. Liability to pay interest is statutory consequence of liability to pay duty and does not stand extinguished merely because quantum of duty is settled – The mere fact that interest ultimately quantified is higher than amount initially computed by Petitioner cannot constitute ground for interference with Settlement Commission's order. Petitioner's challenge to Show Cause Notice on ground of limitation cannot be permitted to be indirectly raised by isolating direction relating to interest from settlement order as whole. Writ petition was dismissed as no ground existed to interfere with the order passed by the Settlement Commission [Read less]

Central Excise - Scope of Judicial Review of Settlement Commission Orders - Sufficiency of Evidence - The Petitioner approached the Settlement Commission for adjustment of CENVAT credit reversal in respect of its manufacturing activities during 2005. The Settlement Commission rejected the claim for adjustment on the ground that the documentary evidence furnished by the petitioner was insufficient to establish the reversal - Whether the High Court could interfere with the Settlement Commission's order on grounds of sufficiency and adequacy of evidence placed before it – HELD - The jurisdiction of the High Court under Arti... [Read more]

Central Excise - Scope of Judicial Review of Settlement Commission Orders - Sufficiency of Evidence - The Petitioner approached the Settlement Commission for adjustment of CENVAT credit reversal in respect of its manufacturing activities during 2005. The Settlement Commission rejected the claim for adjustment on the ground that the documentary evidence furnished by the petitioner was insufficient to establish the reversal - Whether the High Court could interfere with the Settlement Commission's order on grounds of sufficiency and adequacy of evidence placed before it – HELD - The jurisdiction of the High Court under Article 226 while examining an order of the Settlement Commission does not exercise appellate jurisdiction and the question is not whether the material placed before the Settlement Commission was sufficient in the Court's opinion but whether the order suffers from an infirmity warranting judicial interference within narrow parameters recognised by law - The sufficiency, adequacy and evidentiary value of material placed before the Settlement Commission are matters within the domain of the Settlement Commission and the High Court cannot undertake re-appreciation of such material as if sitting in appeal. The absence of an appellate remedy against the order of the Settlement Commission does not enlarge the scope of judicial review and the exercise of such jurisdiction remains subject to well-settled limitations governing judicial review of orders passed by specialised statutory bodies. The Court declined interference with the impugned order – The Writ Petition is dismissed [Read less]

Service Tax - Joint Venture operations – Demand under Manpower supply and Business Support Services - Scope of taxable service - Appellant as designated Operator for three petroleum exploration blocks allotted under NELP entered into Joint Operating Agreements with co-venturers and raised cash calls upon JV partners towards manpower and BSS rendered by appellant as Operator – Respondent-Dept alleged that gross amounts recovered by appellant from respective JVs towards manpower and business support services constitute consideration for taxable services rendered by appellant and are exigible to Service Tax - Whether cash... [Read more]

Service Tax - Joint Venture operations – Demand under Manpower supply and Business Support Services - Scope of taxable service - Appellant as designated Operator for three petroleum exploration blocks allotted under NELP entered into Joint Operating Agreements with co-venturers and raised cash calls upon JV partners towards manpower and BSS rendered by appellant as Operator – Respondent-Dept alleged that gross amounts recovered by appellant from respective JVs towards manpower and business support services constitute consideration for taxable services rendered by appellant and are exigible to Service Tax - Whether cash calls raised by operator of joint venture on its co-venturers for allocation of manpower costs and office expenses constitute consideration for taxable services - HELD - Contributions made by co-venturers towards execution of common venture do not constitute taxable consideration for services rendered inter se between Joint Venture and its constituents - In a joint venture the arrangement amongst parties is contractual for undertaking common enterprise for profit with joint control over strategic financial and operative decisions. Whatever a partner does for furtherance of business of partnership he does so only for advancing his own interest as he has a stake in success of venture. There is neither intention to render a service to other partners nor is there any consideration fixed as quid pro quo for any particular service - A contractor-contractee or principal-agent relationship which is an essential element of any taxable service is absent in relationship amongst co-venturers or between co-venturers and joint venture. The element of consideration which is necessary ingredient of any taxable service is absent in such arrangement - The activities undertaken by appellant as designated Operator do not constitute taxable service within meaning of Finance Act 1994. They merely represent discharge of contractual obligations undertaken by co-venturer in furtherance of common enterprise and allocation of resultant expenditure amongst participating members in accordance with their agreed participating interests – Further, extended period of limitation under proviso to Section 73(1) of Finance Act 1994 was invoked in purely mechanical manner without establishing indispensable statutory ingredients of fraud collusion willful misstatement or suppression of facts with intent to evade payment of Service Tax – The impugned demand of service tax together with interest thereon are set aside – The appeal is allowed [Read less]

GST - Interest and penalty on returns filed after due date, Maintainability of writ petition - Claim for refund of over-deposited taxes - Petitioner filed returns for financial year 2017-18 at the rate of 18 per cent instead of statutory rate of 12 per cent and subsequently issued credit notes to correct the inadvertent error in March 2018 - Despite the full discharge of tax liability by the petitioner and correction through credit notes, respondent authorities issued Show Cause Notice for alleged delayed filing of returns and imposed interest under Section 50 of CGST Act - Whether interest is sustainable when there is no ... [Read more]

GST - Interest and penalty on returns filed after due date, Maintainability of writ petition - Claim for refund of over-deposited taxes - Petitioner filed returns for financial year 2017-18 at the rate of 18 per cent instead of statutory rate of 12 per cent and subsequently issued credit notes to correct the inadvertent error in March 2018 - Despite the full discharge of tax liability by the petitioner and correction through credit notes, respondent authorities issued Show Cause Notice for alleged delayed filing of returns and imposed interest under Section 50 of CGST Act - Whether interest is sustainable when there is no tax arrear and only an inadvertent error in rate has been committed and corrected - HELD - The Court is prima facie satisfied with regard to the point of maintainability. The present Writ Petition is maintainable despite existence of alternative remedy when impugned orders suffers from lack of jurisdiction and violation of natural justice - the issue involved herein cannot be decided without exchange of affidavits. The respondent authorities are directed to file an Affidavit in Opposition. Let the matter be listed on 1st October 2026 - In the meantime the respondent authorities are directed not to give effect to the impugned orders till the next date of hearing – Ordered accordingly [Read less]

GST – West Bengal AAR - Passenger Transportation Service - Place of supply and taxability of passenger transportation services on international passenger air transportation where passenger boards from outside India and travels to India – Applicant contended that where a passenger boards from Dhaka, Bangladesh and travels to Kolkata, India, the place of embarkation is outside India and therefore the supply is not taxable in India - Whether the place of supply being outside India, the transaction falls outside the charging provisions of the GST Acts - HELD - The place of supply of passenger transportation service is dete... [Read more]

GST – West Bengal AAR - Passenger Transportation Service - Place of supply and taxability of passenger transportation services on international passenger air transportation where passenger boards from outside India and travels to India – Applicant contended that where a passenger boards from Dhaka, Bangladesh and travels to Kolkata, India, the place of embarkation is outside India and therefore the supply is not taxable in India - Whether the place of supply being outside India, the transaction falls outside the charging provisions of the GST Acts - HELD - The place of supply of passenger transportation service is determined with reference to Section 13(10) of the IGST Act, 2017 where the location of the supplier or recipient is outside India. The place of supply is the place where the passenger embarks on the conveyance for a continuous journey. In this scenario, the place of embarkation is outside India. Since the place of supply is outside India, the transaction does not fall within the ambit of the GST charging provisions. No GST is leviable in India on such supplies – Accordingly, no GST is applicable on passengers boarding from outside India and coming to India - GST - Place of supply and taxability of passenger transportation services - Whether GST is leviable on international passenger air transportation where passenger boards from India and travels to foreign country - Petitioner contended that where a passenger boards from Kolkata, India and travels to Dhaka, Bangladesh, the supply originates in India through the Indian branch and the place of embarkation is Kolkata - Whether the place of supply being within India, CGST and SGST are leviable - HELD - Section 12(9) of the IGST Act, 2017 applies where both the supplier and recipient are located in India. The place of supply is the place where the passenger embarks on the conveyance for a continuous journey, which in this case is Kolkata, West Bengal. Since the location of the supplier and the place of supply are both in West Bengal, the supply is treated as an intra-state supply under Section 8 of the IGST Act. The supply is accordingly liable to CGST and SGST at the applicable rate - For a passenger travelling in economy class where the supplier does not avail the corresponding input tax credit, the applicable tax rate is 5% GST. For a passenger travelling in any class other than economy class, the applicable rate is 18% GST - The Advance Ruling is issued holding that CGST and SGST are applicable on passengers boarding from India for flights to foreign countries - GST - Place of supply and taxability of passenger transportation services - Continuous journey with single ticket - Whether GST is leviable on international passenger air transportation where passenger holds a single ticket from a foreign country to India with a transit stop in an intermediate location - HELD - Section 13(10) of the IGST Act, 2017 applies where either the supplier or the recipient is located outside India. The place of supply is determined with reference to the place where the passenger embarks on the conveyance for a continuous journey - A transit stop for a short duration does not constitute a stopover as defined in the explanation clause to Section 2(3) of the IGST Act. A stopover involves a break in the journey with a change of aircraft and transshipment of luggage, whereas a transit stop is an intermediate landing where the aircraft briefly stops without the passenger disembarking to leave the airport. The transit stop does not break the continuity of the journey undertaken by the passenger from the point of embarkation to the final destination. Since the first point of embarkation is London, which is outside India, the place of supply is outside India. The transaction does not fall within the ambit of the GST charging provisions and no tax is leviable - The Advance Ruling is issued holding that no GST is applicable on passengers on continuous journey with single ticket from a foreign country to India with a transit stop - GST - Place of supply and taxability of passenger transportation services - Continuous journey with single ticket - Whether GST is leviable on international passenger air transportation where passenger holds a single ticket from India to a foreign country with a transit stop in an intermediate location - HELD - Section 12(9) of the IGST Act, 2017 applies where both the supplier and the recipient are located in India. The place of supply is determined with reference to the place where the passenger embarks on the conveyance for a continuous journey - A transit stop for a short duration does not break the continuity of the journey. It cannot be equated with stopover as defined in the explanation clause to Section 2(3) of the IGST Act. The transit stop in no way breaks the continuity of the journey undertaken by the passenger from Kolkata to London. The first point of embarkation is Kolkata, which is within West Bengal, India. The place of supply is accordingly Kolkata. Since the location of the supplier and the place of supply are both in the same State, the supply is treated as an intra-state supply under Section 8 of the IGST Act. The supply is accordingly liable to CGST and SGST at the applicable rate - For a passenger travelling in economy class where the supplier does not avail the corresponding input tax credit, the applicable rate is 5% GS. For a passenger travelling in any class other than economy class, the rate is 18% GST - The Advance Ruling is issued holding that CGST and SGST are applicable on passengers on continuous journey with single ticket from India to a foreign country with a transit stop - GST - Place of supply and taxability of passenger transportation services - Continuous journey with single ticket - Whether GST is leviable on international passenger air transportation where passenger holds a single ticket from one foreign country to another foreign country with a transit stop in India - HELD - Section 13(10) of the IGST Act, 2017 applies where either the supplier or the recipient is located outside India. The place of supply is determined with reference to the place where the passenger embarks on the conveyance for a continuous journey. A transit stop for a short duration does not constitute a stopover as defined in the explanation clause to Section 2(3) of the IGST Act. The transit stop in no way breaks the continuity of the journey undertaken by the passenger from Dhaka to London. Here both the supplier and the recipient are located outside India. The place of supply is the place of embarkation, namely Dhaka, which is outside India's taxable territory. The transaction does not fall within the ambit of the GST charging provisions and no tax is leviable - The Advance Ruling is issued holding that no GST is applicable on passengers on continuous journey with single ticket between two foreign countries with a stop in India - GST – Scope of Supply - Transportation of human remains by air - Whether transportation of human remains falls within the definition of supply under Section 7 of the CGST Act, 2017 - HELD - Section 7 of the CGST Act, 2017 includes all forms of supply for consideration in the course or furtherance of business. Schedule III appended to the CGST Act, 2017 specifies activities or transactions which shall be treated neither as a supply of goods nor a supply of services. Clause 4 of Schedule III refers to services of funeral, burial, crematorium or mortuary including transportation of the deceased. The services mentioned in Clause 4 are all related to services offered to a person after he passes away. It includes transportation of the deceased - Since transportation of the deceased is neither a supply of goods nor a supply of services, it does not come under the ambit of Section 7(1) of the CGST Act, 2017 and hence there is no question of any tax being imposed on such services - Transportation of human remains does not constitute a supply within the mea [Read less]

GST - Cancellation of GST registration - Limitation in filing appeal - Whether cancellation of registration can be upheld on the ground of delay in filing appeal beyond 30 days when the Commissioner has no power to condone delay - HELD - The provisions of GST enactment cannot be interpreted so as to deny right to carry on trade and commerce to any citizen. The Constitutional guarantee is unconditional and unequivocal and must be enforced regardless of shortcomings in the scheme of GST enactment - The right to carry on trade or profession cannot be curtailed contrary to the Constitutional guarantee under Article 19(1)(g) an... [Read more]

GST - Cancellation of GST registration - Limitation in filing appeal - Whether cancellation of registration can be upheld on the ground of delay in filing appeal beyond 30 days when the Commissioner has no power to condone delay - HELD - The provisions of GST enactment cannot be interpreted so as to deny right to carry on trade and commerce to any citizen. The Constitutional guarantee is unconditional and unequivocal and must be enforced regardless of shortcomings in the scheme of GST enactment - The right to carry on trade or profession cannot be curtailed contrary to the Constitutional guarantee under Article 19(1)(g) and Article 21 of the Constitution of India. If the person is not allowed to revive the registration, the State would suffer loss of revenue and the ultimate goal under GST regime will stand defeated - Since it is merely a matter of cancellation of registration, the question of limitation should not bother the court since it cannot be said that any right has accrued to the State which would rather be adversely affected by cancellation - The orders canceling the GST registration are quashed and set aside. The registration is valid from 29.02.2024 onwards subject to the condition that the petitioner files up to date GST returns and deposits entire pending dues along with applicable interest, penalty, late fees in terms of Rule 23(1) of the MGST Rules 2017 – The Writ Petition is allowed [Read less]

Customs - Recovery of drawback erroneously paid - Limitation period for recovery of drawback - Whether recovery proceedings initiated more than ten years after drawback was availed can be sustained when no statutory period of limitation is prescribed in Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules - HELD - It is a settled principle of law that fraud vitiates all solemn acts and that a person cannot be permitted to take advantage of his own fraud, irrespective of the passage of time. However, in the present case, there is no allegation that petitioner fraudulently obtained the drawback or suppres... [Read more]

Customs - Recovery of drawback erroneously paid - Limitation period for recovery of drawback - Whether recovery proceedings initiated more than ten years after drawback was availed can be sustained when no statutory period of limitation is prescribed in Rule 16 of Customs, Central Excise Duties and Service Tax Drawback Rules - HELD - It is a settled principle of law that fraud vitiates all solemn acts and that a person cannot be permitted to take advantage of his own fraud, irrespective of the passage of time. However, in the present case, there is no allegation that petitioner fraudulently obtained the drawback or suppressed any material facts. The only allegation is that petitioner had not produced proof of realisation of export proceeds - Where the statute does not prescribe a period of limitation, the proceedings must nevertheless be initiated within a reasonable time. What constitutes a reasonable time would depend upon the facts and circumstances of each case. The drawback was availed during the period from 2004 to 2007 and last payment was made on 28.12.2007. The show cause notice was allegedly issued only in 2018 and the impugned order was passed in 2022. No reason has been assigned for the delay in initiating the recovery proceedings. There is also no explanation for the considerable delay between the alleged issue of the show cause notice and passing of the impugned order - Recovery proceedings initiated after such an inordinate delay cannot be sustained - The impugned order passed for recovery of drawback is set aside. Consequently, the attachment of the petitioner's bank account is also set aside - The Writ Petition is allowed [Read less]

GST - Issuance of show cause notice and demand order against deceased taxpayer - Validity of proceedings against dead person - Whether show cause notices and demand orders issued against a deceased taxpayer on GSTN portal only can bind the legal heir when the legal heir was unaware and not involved in the business - HELD - The petitioner is a housewife of the deceased assessee who passed away during Covid Pandemic on 03.05.2021. The petitioner was not remotely connected to the proprietorship and ultimately, the registration was cancelled on 16.07.2021 of the proprietorship. After the period of almost three years, on 14.06.... [Read more]

GST - Issuance of show cause notice and demand order against deceased taxpayer - Validity of proceedings against dead person - Whether show cause notices and demand orders issued against a deceased taxpayer on GSTN portal only can bind the legal heir when the legal heir was unaware and not involved in the business - HELD - The petitioner is a housewife of the deceased assessee who passed away during Covid Pandemic on 03.05.2021. The petitioner was not remotely connected to the proprietorship and ultimately, the registration was cancelled on 16.07.2021 of the proprietorship. After the period of almost three years, on 14.06.2024, the respondent authority issued the pre-show cause notice intimation to the deceased assessee under the provisions of Section 73(5) of the CGST Act intimating about the proposed tax liability. Thereafter, the proceedings further continued and the notices were issued and affixed at the factory premises of the deceased assessee. Since no one appeared, as the taxpayer was deceased, the respondent authority passed the impugned order confirming the demands - It is true that the respondent authority was not aware about the death of the husband, who was connected with the business activities of the proprietorship. However, the petitioner, being a housewife, was not even remotely connected with the business and was unaware of the niceties of the GSTN portal - The show cause notices as well as the impugned orders passed thereafter are quashed and set aside. It will be open for the respondent to initiate proper proceedings in accordance with law against the petitioner for the outstanding demand - The present petition is allowed [Read less]

Service Tax - Maintainability of Appeal under Section 35G of Central Excise Act - Classification of Taxable Services - Revenue preferred an appeal under Section 35G of the Central Excise Act against the CESTAT's order which had allowed the Respondent's appeal and set aside the demand on the ground that the services rendered were not taxable under Section 65(105) of the Finance Act - Whether an appeal involving determination of classification of services falls within the prohibition against appeals on grounds of rate of duty or value of goods under Section 35G(1) of the Central Excise Act – HELD - The questions relating t... [Read more]

Service Tax - Maintainability of Appeal under Section 35G of Central Excise Act - Classification of Taxable Services - Revenue preferred an appeal under Section 35G of the Central Excise Act against the CESTAT's order which had allowed the Respondent's appeal and set aside the demand on the ground that the services rendered were not taxable under Section 65(105) of the Finance Act - Whether an appeal involving determination of classification of services falls within the prohibition against appeals on grounds of rate of duty or value of goods under Section 35G(1) of the Central Excise Act – HELD - The questions relating to classification of services and whether they are taxable fall within the expression determination of any question having relation to rate of duty. Section 35L(2) of the Central Excise Act clarifies that determination of disputes relating to taxability or excisability of goods is covered under the term determination of any question having relation to rate of duty and hence appeals in such matters should lie before the Supreme Court under Section 35L and not before the High Court under Section 35G - The amendment inserting Section 35L(2) is clarificatory in nature and does not create any new legal position but merely gives statutory expression to what was already the natural consequence of reading Sections 35G and 35L collectively. The phrase ‘shall include’ denotes inclusive and expansive definition clarifying the scope of an existing expression rather than adding a new category. The appeal under Section 35G is not maintainable and dismissed. Revenue would have to prefer the appeal before the Supreme Court under Section 35L if it intends to – The appeal is dismissed [Read less]

Andhra Pradesh General Sales Tax Rules, 1957 - Applicability of Rule 6(3)(i) to Works Contracts spread beyond One Year - Petitioner executed three different works contracts, two of which extended beyond one year. Department assessed the value of goods purchased considering Rule 6(3)(ii) instead of Rule 6(3)(i) applicable for works spread beyond one year - Whether in respect of contracts spread over a period of more than one year, the provision of Rule 6(3)(i) of the APGST Rules, 1957 would be applicable – HELD - The Rule 6(3)(i) merely provides another method of determining the turnover liable to tax for works spread bey... [Read more]

Andhra Pradesh General Sales Tax Rules, 1957 - Applicability of Rule 6(3)(i) to Works Contracts spread beyond One Year - Petitioner executed three different works contracts, two of which extended beyond one year. Department assessed the value of goods purchased considering Rule 6(3)(ii) instead of Rule 6(3)(i) applicable for works spread beyond one year - Whether in respect of contracts spread over a period of more than one year, the provision of Rule 6(3)(i) of the APGST Rules, 1957 would be applicable – HELD - The Rule 6(3)(i) merely provides another method of determining the turnover liable to tax for works spread beyond one year, based on the value of goods purchased and supplied or used in the execution of the works contract in that year, instead of the method prescribed in Rule 6(2) of arriving at turnover by deducting certain items of expenditure from gross receipts - The value of goods under Rule 6(3)(i) includes not only the cost of acquisition of goods but also transportation charges to deliver the goods to the situs of the works, cost of establishment relatable to supply of material, other charges incurred till incorporation in the works and profits relatable to the value of goods. The profit element may be estimated considering factors like profits ordinarily made by other contractors in similar works, profits earned by the contractor in previous years and profit percentage norms accepted in the industry - The deemed turnover under Rule 6(3)(i) would exclude profits on labour component and actual cost of incorporation in the works - The issue involved in the present writ petitions is covered by Full Bench decision of High Court of Andhra Pradesh in the case of State of Andhra Pradesh v. Seven Hills Constructions - The impugned order is set aside and the matter is remanded for fresh computation taking into consideration the provision of Rule 6(3)(i) after verifying whether the works executed by the petitioner actually spread over beyond one year – The writ petition is allowed [Read less]