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2026-VIL-1710-CESTAT-HYD-CU | CESTAT CUSTOMS

Customs - Description of imported goods as Crude Palm Oil or RBD Palmolein - Evidentiary value of loading records, e-mail correspondence and laboratory reports - Appellant declared the entire cargo as Crude Palm Oil under Tariff Item 1511 1000 and claimed the concessional rate under Serial No. 57 of Notification No. 50/2017-Customs. The Department relied on the Loading Time Log, Ship's Ullage Report, e-mail correspondence, statements and reports of three Government Laboratories to allege that part of the cargo was RBD Palmolein loaded in separate tanks. The Appellant contended that beta-carotene deteriorates with time, that the Visakhapatnam laboratory reported the samples as Crude Palm Oil, and that the electronic records were inadmissible - Whether the disputed quantity was Crude Palm Oil and whether the loading records, e-mail correspondence and laboratory reports could be relied upon - HELD - The Loading Time Log and Ullage Report were prepared in the ordinary course of loading operations and contained tank-wise detail. The Appellant produced no contemporaneous document from the foreign supplier, vessel owner, surveyor or Port Authority showing that the disputed tanks held Crude Palm Oil. The consistency between the loading documents and contemporaneous correspondence is a material circumstance which cannot be disregarded. The laboratory reports, though not uniform, corroborate the existence of two distinct categories of Palm Oil. The Visakhapatnam reports represented only a limited number of tanks. The demand is not founded exclusively on beta-carotene content, and the Appellant produced no independent technical opinion that the variations were solely due to delay or storage. Food Safety standards do not by themselves determine classification under the Customs Tariff. Here the finding rests primarily on the vessel and loading records and is corroborated by the test reports. A procedural defect in certification does not destroy the evidentiary value of an electronic record where authenticity is not genuinely in dispute and the record is supported by surrounding evidence. The Department established on the standard of preponderance of probabilities that the disputed quantity was not Crude Palm Oil - The finding is upheld. The appeal is partly allowed - Customs - Eligibility to concessional rate under Serial No. 57 of Notification No. 50/2017-Customs after omission of the explanation prescribing acid value and total carotenoid parameters - Whether the omission entitles refined palmolein to the concessional rate meant for Crude Palm Oil - HELD - Eligibility cannot be denied solely because the goods fail to satisfy conditions which no longer form part of the notification. However, the omission cannot be construed to mean that every form of Palm Oil, including refined, bleached, deodorised or fractionated palmolein, must be treated as Crude Palm Oil. The concession applies only when the goods are first shown to be Crude Palm Oil. The notification did not amend Heading 1511 or the GRI. The legal identity of Crude Palm Oil under the Tariff did not disappear upon deletion of the explanation. A person claiming exemption must first establish that the goods fall within the description covered by the notification - The denial of the concession in respect of the disputed quantity is upheld - Customs - Classification of RBD Palmolein under Tariff Item 1511 9090 - The Adjudicating Authority classified the disputed quantity under Others on the ground that it was mixed with Crude Palm Oil during discharge - Whether the classification can be sustained on that ground - HELD - Once it is found that the goods were RBD Palmolein at the time of importation, classification must be determined according to that identity and condition. A post-import event cannot ordinarily alter the tariff identity of the goods as imported. The observation that the goods became neither RBD Palmolein nor Crude Palm Oil after discharge is not a satisfactory basis for classification. However, the defect in reasoning does not invalidate the classification if RBD Palmolein falls within that entry. Heading 1511 covers Palm Oil and its fractions, whether or not refined, but not chemically modified. The tariff separately identifies Crude Palm Oil and places other forms under the remaining entries - The classification under Tariff Item 1511 9090 is upheld on the ground that the goods were RBD Palmolein at the time of importation - Customs - Applicable rate of Basic Customs Duty and re-computation of differential duty - The Appellant contended that the applicable rate for Tariff Item 1511 9090 was lower than the rate applied - Whether the differential duty has been correctly quantified - HELD - The applicable rate must be determined with reference to the notification and tariff rate in force on the relevant date of importation. A higher rate cannot be applied unless supported by the notification operative on that date. The material before the Tribunal did not contain a complete examination of the competing notifications. The issue is one of notification-based verification and does not require reopening the finding on ineligibility for the concessional rate - The matter is remitted to the Adjudicating Authority for the limited purpose of verifying the rate and re-computing the differential duty after a hearing. Interest under Section 28AA is payable on the recomputed duty. The amount deposited during investigation shall be appropriated to the amounts finally payable and any excess shall be refunded with applicable interest - Customs - Invocation of extended period - The Bills of Entry declared the entire cargo as Crude Palm Oil although the loading records described part of it as RBD Palmolein - Appellant contended that it was a technical dispute on classification with no deliberate mis-declaration or suppression - Whether the invocation of Section 28(4) is sustainable - HELD - The importer was responsible for making a complete and correct declaration under the self-assessment system. The difference was not a debatable choice between two closely competing tariff entries based upon a disclosed description. A substantial part of the cargo was described in the shipping documents as RBD Palmolein, whereas it was declared as Crude Palm Oil for claiming a materially lower rate of duty. No satisfactory explanation was furnished. The cumulative evidence establishes a material mis-declaration resulting in wrongful availment of a concessional rate - There is no reason to interfere with the invocation of Section 28(4) - Customs - Confiscation under Sections 111(m) and 111(o), redemption fine under Section 125 and penalties under Sections 114A and 114AA - Whether confiscation, redemption fine and the penalties are sustainable - HELD - Section 111(m) applies where goods do not correspond in a material particular with the entry made. The description as Crude Palm Oil was material to classification, eligibility to exemption and assessment of duty. Confiscation under Section 111(m) is sustainable. The goods were imported by claiming a conditional concessional rate and the conditions were not fulfilled. Confiscation under Section 111(o) is also sustainable. Redemption fine must bear a reasonable relationship to the value of the goods and the gravity of the contravention. The goods were edible Palm Oil and were not prohibited goods. The dispute relates primarily to description, classification and rate of duty. The fine is excessive and is reduced. The incorrect description resulted in short-payment of duty, so the ingredients for penalty under Section 114A are present. The penalty must correspond to the duty finally determined, and the statutory option of reduced penalty remains available. Every incorrect declaration resulting in a demand under Section 28(4) and penalty under Section 114A does not automatically justify an additional penalty under Section 114AA. The Authority must identify the particular false docume [Read less]

2026-VIL-1704-CESTAT-BLR-CE | CESTAT CENTRAL EXCISE

Central Excise – Short payment of cesses, short payment of interest, utilisation of CENVAT credit for payment of arrears of duty and penalties – Audit noticed short payments, irregular availment of CENVAT credit and short payment of interest. The Order-in-Original confirmed short payment of Education Cess and Secondary and Higher Education Cess with interest and equivalent penalty, and imposed other penalties under the Central Excise Act, 1944. The Commissioner (Appeals) upheld the order. The Appellant had short paid duties in several months and adjusted the amount from CENVAT credit earned in the succeeding months by ... [Read more]

2026-VIL-1709-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax – Taxability of portal services as Online Information and Database Access or Retrieval service – Appellant, a joint venture formed to develop and manage the State Government's e-governance portal, provided a network through which citizens and government officers accessed and used government data, and collected fees on behalf of government departments, educational institutions and utility companies – Whether the services provided by the Appellant through the portal are Online Information and Database Access or Retrieval service for the period October 2009 to 30.06.2012 - HELD - OIDAR services can be alleged to have been provided only if the data belongs to the service provider. The service provider cannot provide access to data which it does not itself possess. The Appellant provided only a network through which the data of the State Government could be accessed by the officers of the State Government and by the citizens. Therefore, it cannot be said that the Appellant provided any OIDAR services. This view is supported by the decision of the Tribunal in United Telecom Ltd, against which the Revenue's appeal was rejected by the High Court, and by the decision of the Larger Bench of the Tribunal in Air India Ltd - The demand under OIDAR service is set aside and the appeal is allowed - Service Tax – Taxability of services to Government departments and educational institutions as business auxiliary service or business support service – Appellant collected utility bill payments and fees for Government departments, universities and educational institutions through the portal, and also provided data digitisation services to the State Urban Services Corporation – Whether the services provided to Government departments and to universities and educational institutions before 01.07.2012 are chargeable to service tax under business auxiliary service or business support service - HELD - The services provided to Government departments for collection of utility bills and to universities and educational institutions before 01.07.2012 were support services. These services were not provided to business entities. Therefore, they would not fall under the category of business auxiliary service or business support service. Hence, no service tax was payable on them. The services to corporations such as telecom companies and insurers were chargeable to service tax both before and after 01.07.2012, and the Appellant had paid service tax on the commission received on them. The fees charged from kiosk operators were construed as franchise fee on which the Appellant had paid service tax both before and after 01.07.2012 - The demand on these services is set aside and the appeal is allowed - Service Tax – Exemption to services provided to educational institutions after 01.07.2012 – Appellant provided portal services to universities and educational institutions for admissions and conducting examinations – Whether service tax is payable after 01.07.2012 on the portal income received from educational institutions - HELD - After 01.07.2012, all services became exigible to service tax except those in the negative list. Services provided to universities were covered by Exemption Notification No. 25/2012-ST, Entry No. 9(d). Therefore, no service tax was payable on them even after 01.07.2012 - The demand on portal income from educational institutions is set aside and the appeals are allowed - Service Tax – Taxability of interest on Fixed Deposits – Appellant collected utility bill payments, fees and statutory charges and was required to transfer the amounts to the concerned departments and institutions after one day or five days, and during this period it held surplus funds in fixed deposits which earned interest – Whether interest earned on Fixed Deposits is exigible to service tax during the pre negative list and post negative list regime - HELD - Since the Appellant was required to transfer the amounts collected only after one day or five days, it had at any point of time a lot of money in its fixed deposits and earned interest on the same. Interest is the time value for money. It is the consideration received for the money deposited with the bank and it is not consideration received for any service. Therefore, it is not exigible to service tax either during the pre negative list or post negative list regime - The demand on interest earned on Fixed Deposits is set aside and the appeals are allowed. [Read less]

2026-VIL-1708-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Interest on refund of amounts deposited during investigation – Respondent deposited the amounts during the course of investigation in 2008-2009. The Tribunal later allowed the Respondent's appeal and set aside the confirmed demand. The Revenue's appeal before the Apex Court was dismissed. The refund was sanctioned only in 2024, after more than 16 years from the date of deposit. The Commissioner (Appeals) held that the Respondent is eligible for interest on the refund from the date of deposit till the refund is granted. The Revenue contended that interest, if any, is payable only for the refund claim filed after the issue was finalised at the Apex Court level – Whether the Respondent is entitled to interest on the refund of the deposited amounts from the date of deposit till the date of refund - HELD - The deposits were made in 2008 and the refund was sanctioned only in 2024. The Tribunal had set aside the confirmed demand. This means that the deposit collected from the Respondent was not liable to be paid by it right from day one. After the Tribunal's decision, the Revenue took another 4 years before the Apex Court, which dismissed its appeal. This affirms the decision of the Tribunal holding that the confirmed demand is illegal ab initio. Therefore, the Revenue cannot keep the money belonging to the Respondent from 2008 and return the same without any interest in 2024. The Bench followed its recent decision, which had considered the decisions of the Apex Court in Ranbaxy Laboratories and Sandvik Asia, the High Court decision in Riba Textiles, and the Tribunal decision in Berger Paints. Those decisions hold that the Revenue is liable to pay interest on amounts wrongly withheld from the assessee. The ratio laid down in the said decision is squarely applicable to the facts of the present case - The order of the Commissioner (Appeals) granting interest on the refund from the date of deposit is upheld and the appeal filed by the Revenue is dismissed [Read less]

2026-VIL-168-GSTAT-BLR | Tribunal SGST

GST - Dismissal of first appeal without hearing the Appellant under Section 107(8) - The First Appellate Authority rejected the adjournment sought on behalf of the Appellant and dismissed the appeal without a hearing on the grounds of delay, defective authority of the signatory and non-payment of an admitted amount - Whether the First Appellate Authority could dismiss the appeal without hearing the Appellant - HELD - Section 107(8) is short and unqualified. It draws no line between a decision on the merits and a decision on a threshold objection - The First Appellate Authority reasoned that a hearing is unnecessary where the appeal fails for “absence of authority to entertain” it. The statute does not support that view - Even if the adjournment was rightly refused, the First Appellate Authority had to give the Appellant another date before dismissing the appeal. The adjournment could not be refused because the authorisation in favour of the consultant firm was not signed by all the persons named. That document concerns the relationship between the company and its advisers and has nothing to do with the right of the company to be heard - The Order-in-Appeal was passed in breach of Section 107(8) and the principles of natural justice and cannot stand - Condonation of delay in filing the first appeal under Section 107(4) - The first appeal was filed beyond three months by a period within the further one month allowed. The Appellant filed a petition for condonation along with the appeal stating that the delay was due to the illness of the consultant and the time taken to gather documents. The First Appellate Authority held that no application for condonation was filed along with an affidavit - Whether the delay ought to have been condoned - HELD - Section 107(4) empowers the Appellate Authority to condone a delay up to one month beyond the three months if sufficient cause is shown. The finding that no application for condonation was filed is contrary to the record. Form GST APL-01 itself asks whether the appeal is filed late and the reasons for the delay - Neither the Act nor Rule 108 prescribes a separate application or an affidavit. The First Appellate Authority imposed a requirement that has no statutory source and did not consider the petition filed. Sufficient cause must receive a liberal construction to advance substantial justice. The length of delay is not decisive and what matters is whether the explanation is acceptable. Condonation is not a matter of right, but the Appellant made out its own case. The cause shown was ordinary, plausible and uncontradicted. Nothing suggested a dilatory motive and the Revenue suffered no prejudice - The delay in filing the first appeal is condoned - Validity of signing and verification of the first appeal on behalf of a company by its General Manager - The First Appellate Authority held that the General Manager signed the appeal without a certified board resolution or a notarised power of attorney. The Appellant relied on a General Power of Attorney executed by its Managing Director authorising the General Manager to represent, sign and file applications on all tax matters before tax authorities - Whether the appeal was validly signed and verified on behalf of the company - HELD - Rule 108 read with Rule 26 provides that the appeal of a company is to be signed by its Chief Executive Officer or authorised signatory and verified by digital signature - The appeal was filed on the portal under the Appellant's own registration. The General Manager held a General Power of Attorney executed for the company by its Managing Director. The company has prosecuted the second appeal through him - A company can ratify the act of an officer who has signed and verified on its behalf, and ratification may be inferred from its conduct in pursuing the proceeding. Procedural defects which do not go to the root of the matter should not defeat a just cause. The decision on the authority of a person to institute a suit on behalf of a company is distinguishable as there the authority was not shown to flow from the company. The fact that another authorised signatory signed the reply does not show that the General Manager lacked authority. The observation that he could not depose to the facts confuses the merits of a plea with the authority of the person who makes it. If the First Appellate Authority doubted the authority, the proper course was to point out the defect and call for proof - The appeal was validly signed and verified. Any omission to file proof of authority was a curable defect - Whether the appeal is barred under Section 107(6) for non-payment of an “admitted” amount or pre-deposit where only interest was confirmed - HELD - The reply to the show cause notice, read as a whole, is not an admission. It opened by stating that the appellant was “not liable to pay interest or penalty” - A statement made during the audit, in answer to a higher figure and while seeking relief from the whole interest, accepts the method of computation but does not concede that interest is owed. It is not an admission in a pleading and is not conclusive. The adjudicating authority adopted the arithmetic does not turn it into an admission of liability. Clause (b) of Section 107(6) requires a sum of ten per cent of the remaining amount of tax in dispute. Interest is not tax. As no tax was confirmed, no pre-deposit was payable - The Appellant admitted no amount within the meaning of Section 107(6)(a) and no pre-deposit was payable under Section 107(6)(b). The first appeal was validly filed - Power of the Tribunal under Section 113(1) to decide the merits of the first appeal instead of remanding - The First Appellate Authority dismissed the first appeal on threshold grounds. The Tribunal set aside that order. The record was complete and the parties had argued the merits - Whether the Tribunal should decide the merits of the first appeal - HELD - Section 113(1) empowers the Tribunal to confirm, modify or annul the order appealed against. The power to refer the case back is discretionary and is to be used where the record does not allow a decision on merits. The audit report, the show cause notice, the reply with annexures and the computation in the Order-in-Original were on record. No fact was in dispute and no further inquiry was required. Neither party asked for a remand. The dispute concerned a single year and interest alone and had been pending for a long time - The Tribunal decides the merits of the first appeal in the order - Interest under Section 50(1) on differential tax paid late through Form GST DRC-03 after the rate of tax on works contract services was increased - The Appellant contended that its customer did not pay the differential tax, that it paid from its own funds, that the supply was continuous with tax falling due as payment fell due, and that the consideration should be treated as cum-tax under Rule 35 - Whether interest is payable on the differential tax paid through DRC-03 and whether Rule 35 reduces it - HELD - Liability to interest arises from the failure to pay tax within the period prescribed. Interest is compensatory and makes good to the exchequer the use of money it should have had. Payment of differential tax through DRC-03 does not extinguish the liability to interest. The Appellant accepted the higher rate and paid tax at that rate. The customer's failure to pay does not affect liability. Tax falls due at the time of supply fixed by the Act and not when the customer pays - The Act does not give any authority the power to waive interest on the ground of hardship. The only statutory waiver is in Section 128A and it is confined to the period from 01.07.2017 to 31.03.2020. The parties to a contract may agree on who finally bears the tax, but this does not alter liability to the Government - Where the invoice is issued within the prescribed period, Section 13(2)(a) fixes the time of supply as the date of invoice or receipt [Read less]

2026-VIL-169-GSTAT-SRT | Tribunal SGST

GST - Leviability of GST on assignment of leasehold rights in industrial plot allotted by State Industrial Development Corporation - Department filed appeals against Orders-in-Appeal which upheld the orders dropping the demand raised on the Respondents for transferring, for consideration, leasehold rights in plots of land allotted on lease by the Corporation to a third party - Whether GST is leviable on assignment of leasehold rights of plots allotted by the Corporation - HELD - The Authorised Representative did not dispute that the case is squarely covered by the judgment of the jurisdictional High Court. The Court held t... [Read more]

2026-VIL-170-GSTAT-AGR | Tribunal SGST

GST - Demand under Section 74 on the ground that supplier firm was bogus or non-existent - The Respondent's inward supply was shown from a firm which, on verification on the GST portal, was found to be bogus or non-existent - Revenue alleged that no goods were purchased and the supply was shown only to claim input tax credit - The First Appellate Authority allowed the Respondent's appeal, holding that the proper officer had passed an erroneous order without considering the relevant papers - Whether the First Appellate Authority was right in allowing the appeal and setting aside the demand of tax and penalty - HELD - A firm... [Read more]

2026-VIL-1155-DEL-CU | High Court CUSTOMS

Customs – Finalisation of provisional assessment and release of bank guarantees –Petitioner imported goods and cleared them on provisional assessment under Section 18 of the Customs Act, 1962 on furnishing bonds and bank guarantees. The Petitioner approached the High Court complaining that the provisional assessments had remained unfinalised for more than nine years. It sought release of the bank guarantees and a writ of prohibition against finalisation. During the pendency of the Writ Petition, Orders-in-Original were passed in respect of the remaining Bills of Entry. An Order-in-Original directing absolute confiscation and imposing penalties had already been passed in respect of one Bill of Entry before the Writ Petition was filed, and it was not disclosed - Whether to keep Writ Petition pending in view of the Supreme Court order in GMR Airport Infrastructure Ltd on delay in adjudication - HELD - The direction of the Supreme Court has to be understood in the context in which it was made, namely a challenge to the High Court judgment on delay in adjudication and a large number of connected matters. It cannot be construed as a direction that every proceeding in which delay had at any stage been alleged must be kept pending irrespective of subsequent developments. The present case has travelled considerably beyond the stage of mere pendency of adjudication, as adjudication orders have already been passed. The controversy before the Supreme Court and the controversy which now survives are not identical - No useful purpose would be served by keeping the Writ Petition pending to await the outcome of the proceedings before the Supreme Court - Customs – Maintainability of Writ Petition when Orders-in-Original are passed – Alternative remedy of appeal under Section 128(1) of the Customs Act, 1962 – Non-disclosure of material fact – Whether the Petitioner ought to be relegated to the statutory appellate remedy and whether a writ of mandamus for release of bank guarantees or a writ of prohibition can be granted - HELD - Once an adjudication order has been passed, the Act provides a statutory appellate mechanism under Section 128(1). The adjudication orders are not merely formal orders recording finalisation of provisional assessments, as in one case absolute confiscation was ordered and penalties were imposed. The controversy now involves the legality of adjudicatory determinations, which are ordinarily required to be examined first by the statutory appellate authority. The question of delay is not rendered incapable of examination merely because adjudication orders have been passed, and the Petitioner can urge it before the appellate forum - The relief of mandamus for release of the bank guarantees cannot be considered in isolation from the adjudication orders. A party invoking jurisdiction under Article 226 must make full and candid disclosure of all material facts. The non-disclosure of the Order-in-Original passed before the institution of the Writ Petition is material, since prohibition was sought against finalisation of the very assessment already adjudicated. The Court expressed no opinion on the merits of the orders or on the consequence of the delay, which are left open - The Writ Petition is dismissed as not maintainable in its present form, with liberty to avail the statutory remedy of appeal under Section 128(1). [Read less]

2026-VIL-1703-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise – Exemption to Bhujia under Serial No. 37 of Notification No. 12/2012-C.E. – Appellant manufactured Bhujia classifiable under Tariff Item 2106 9099 and cleared it in sealed retail packages. The Revenue denied the nil rate of duty under Serial No. 37 and contended that the goods are covered only by Serial No. 38, which applies to food preparations not cleared in sealed containers. Demand of duty with interest and penalties under Section 11AC was confirmed – Whether Bhujia cleared in sealed retail pouches is entitled to the nil rate of duty under Serial No. 37 of Notification No. 12/2012-C.E. dated 17.03.2012 - HELD - Bhujia finds specific and express mention in Serial No. 37, which covers sweetmeats, namkeen, Bhujia, mixture, chabena or similar edible preparations in ready-to-consume form. The entry does not incorporate any condition that the goods must not be cleared in sealed containers. In the presence of a more specific entry, there is no merit in the claim of the Revenue that the goods would be covered only by Serial No. 38. The issue has already been considered by the Tribunal in the Appellant's own case on the same exemption entry and the same commodity, and the issue is no more res integra. The demand was raised by importing into Serial No. 37 a restriction which is not there - The demand along with interest and penalties is set aside and the appeals are allowed - Central Excise – Exemption to Cheese Balls under Serial No. 29 of Notification No. 03/2006-C.E. – Appellant manufactured Cheese Balls classifiable under Tariff Item 2106 9099 and cleared them in sealed retail pouches. The Revenue treated the goods as ready-to-eat packaged food under Serial No. 30 and denied the nil rate of duty under Serial No. 29 – Whether Cheese Balls cleared in sealed retail pouches are covered by the specific nil-rate entry in Serial No. 29 or by Serial No. 30 for the period governed by Notification No. 03/2006-C.E. dated 01.03.2006 - HELD - The question cannot be determined merely by noticing that the goods are ready-to-eat and packaged. Serial No. 29 itself employs the expression similar edible preparations in ready for consumption form, which condition is satisfied by the goods. The fact that such preparations are subsequently placed in retail packaging cannot obliterate the specific description under which the goods otherwise fall. The distinction sought to be drawn by the Revenue would render the latter part of Serial No. 29 otiose wherever the goods are commercially packaged for sale. In Parle Products, the Tribunal held a similar product to be namkeen in common parlance and, in the alternative, covered by the wider expression similar edible preparations in ready-for-consumption form. As per the Board Circular, Serial No. 30 operates as the residual entry for ready-to-eat packaged food which does not answer the specific description in Serial No. 29. It does not displace Serial No. 29 merely because the goods are packaged. Having regard to the nature of the product, its composition and manufacturing process and its ready-to-consume character, the goods are covered by Serial No. 29 - The Cheese Balls are entitled to the nil rate of duty under Serial No. 29, the demand with interest and penalties is set aside and the appeals are allowed - Central Excise – Exemption to Cheese Balls under Serial No. 37 of Notification No. 12/2012-C.E. – Appellant cleared Cheese Balls in sealed retail pouches during the period governed by Notification No. 12/2012-C.E. The Revenue denied the exemption under Serial No. 37 and also held that the goods do not satisfy Serial No. 38 as they were cleared in sealed containers – Whether Cheese Balls cleared in sealed retail pouches are entitled to the nil rate of duty under Serial No. 37 independent of Serial No. 38 - HELD - Serial No. 37 reproduces, in substance, the same description which appeared under Serial No. 29 of the erstwhile notification. Where the same description is carried forward into the successor notification, the exemption cannot be construed as having undergone a substantive restriction in the absence of language expressly manifesting such an intention. A restriction which the notification does not contain cannot be imported into it by interpretation. The requirement that the goods should not be cleared in sealed containers occurs in the distinct and separately worded Serial No. 38. Such a condition cannot be read into Serial No. 37. The Appellant's entitlement under Serial No. 37 is independent of the availability of Serial No. 38. Serial No. 38 is not a gateway through which the Appellant is required to pass before claiming Serial No. 37. If the goods satisfy the description of Serial No. 37, the fact that they may not satisfy the separate conditions of Serial No. 38 does not disentitle them from the specific exemption. The Revenue's reasoning proceeds on an erroneous conflation of two distinct exemption entries - The Cheese Balls are entitled to the nil rate of duty under Serial No. 37, the demand with interest and penalties cannot be sustained and the appeals are allowed - Central Excise – Scope of Tariff Sub-heading 2106 90 in exemption entries vis-à-vis Tariff Item 2106 9099 – The Revenue contended that the specific exemption entries referring to Tariff Sub-heading 2106 90 do not extend to goods classified under Tariff Item 2106 9099 – Whether goods classifiable under Tariff Item 2106 9099 are outside the scope of the expression 2106 90 occurring in Serial No. 29 of Notification No. 03/2006-C.E. and Serial No. 37 of Notification No. 12/2012-C.E. - HELD - The departmental interpretation does not appreciate the hierarchical structure of the Central Excise Tariff. Heading 2106 covers food preparations not elsewhere specified or included. Sub-heading 2106 90 covers the other goods falling within that heading. Tariff Item 2106 9099 is an eight-digit tariff item situated within and forming part of the said sub-heading. The two expressions are not mutually exclusive classifications. Supplementary Note 6 to Chapter 21 provides that Tariff Item 2106 9099 includes products commonly known as namkeen, mixture, Bhujia and chabena, or called by any other name. The Revenue's construction would require reading into the entries a restriction which is not expressed therein. Had the legislative intention been to confine the benefit to a particular tariff item, the notification could have employed the specific eight-digit description. Having used the broader expression 2106 90, the exemption cannot be curtailed by importing a limitation which the notification does not contain - Classification under Tariff Item 2106 9099 does not take the goods outside the scope of the exemption entries, provided the goods answer the substantive description stipulated therein. The impugned order is set aside and the appeals are allowed. [Read less]

2026-VIL-1153-RAJ | High Court SGST

GST - Limitation for filing appeal under Section 107(1) of the CGST Act, 2017 - Uploading of order on GST portal, Communication of order – Cancellation of registration with retrospective effect for non-filing of returns. On coming to know of the cancellation, the Petitioner filed all pending returns, discharged the dues and filed an appeal under Section 107(1). The Appellate Authority dismissed the appeal as barred by limitation, computing the delay from the effective date of cancellation - Revenue contended that uploading of the order on the common portal under Section 169 is sufficient compliance and the Petitioner is deemed to have knowledge of the order - Whether uploading of order on GST portal amounts to communication of order - HELD - Section 107(1) provides limitation of three months from the date on which the order is communicated to the person aggrieved. The expression "communication" is not defined, and must be given contextual meaning. Where the provision is intended to provide a remedy to the person adversely affected, limitation commences from the date of communication of the order - The Adjudicating Authority is obliged to comply strictly with Section 107(1) read with Section 169(1) and to communicate the order - Where the manner of doing an act is prescribed by statute, it must be done in that manner or not at all. Merely uploading the order on the GST Portal does not amount to communication of the order in terms of Section 107(1) - The petitioner was never communicated with the order passed by the Adjudicating Authority in order to enable him to file the appeal. As such, the period of limitation of three months would not start running unless the order in question is served by the Adjudicating Authority - The Statute under Section 107 mandates communication of the order to the person aggrieved by registered post/ e-mail, etc. The Rules cannot circumscribe the modes provided under the Statute, and cannot be limited to electronic modes - The provision for communication is mandatory, and limitation does not start running unless the order is communicated - The provision contained in Section 107(1) of the Act of 2017 qua communication to the affected party is mandatory in nature and unless the order is communicated to affected person, the period of limitation would not start running - The order of the Appellate Authority holding the appeal barred by limitation is set aside, the delay is condoned and the matter is remanded for deciding the appeal on merits – The writ petition is allowed [Read less]

2026-VIL-103-SC | Supreme Court VAT

M.P. Commercial Tax Act, 1994 - Taxable event and relevance of form of goods at the time of sale - Classification on form of good and not end use – Respondent-assessee manufactured and marketed powder and biscuit products, which the Appellants-Department sought to classify as non-alcoholic drinks and beverages on the ground that the packaging required the consumer to dilute the product with milk or water, while the Respondent contended that, being sold across the counter as powder and biscuit, the goods fell under the residuary entry - High Court upheld classification under the residuary entry - Whether the taxing authorities are required to levy tax based on the form of the good at the time of sale or on the end product - HELD - Taxing statutes are strictly construed and nothing can be read in or implied beyond the plain language. The taxable event is the act of supply and the incidence of taxation is determined by the nature of the good in the form in which it is sold. The tax authorities are bound to look at what is supplied and not at its end use, and the subsequent use by the consumer in mixing the powder with water or milk does not alter the taxable event, as liability is determined at the point of supply. Classification must be based on the form of the good at the time of sale and not on the manner in which the consumer may later choose to use it, as a powder mix is taxed as a powder while a ready-to-drink beverage is taxed as a beverage - The authorities must levy tax on the basis of the form of the good at the time of sale - Classification of ‘GRD Powder’ and ‘GRD Mix’ under entry for non-alcoholic drinks and beverages or residuary entry - Whether the goods can be classified as non-alcoholic drinks and beverages or fall in the residuary entry - Appellants relied on common parlance, functional character and basic nature tests, the use of the word "including" in the entry, and decisions on powders and tea, while the Respondent relied on the plain language of the charging provision and the absence of any reference to use in the entry - HELD - The expression "beverages" is followed by syrups, cordials, distilled juice, ark and essences, all of which denote liquids or liquid preparations, and under the rule of ejusdem generis the general word derives its meaning from the class constituted by the associated words and cannot be interpreted to encompass goods of a different physical form. The entry makes no reference to end use but classifies goods by physical characteristic and form, and the common parlance, functional or basic nature tests cannot be applied to import the end use concept to override clear and unambiguous language - The expression "including" cannot be taken to mean all encompassing. The decisions relied on by the Revenue are distinguishable - Goods which do not answer the description of a specific entry must fall within the residuary entry and cannot be forced into an inapposite specific entry merely to attract a higher rate of tax - At the time of the taxable event the goods exist in the form of powder and biscuit and do not fall within the expression beverage. While it is possible that the goods may ultimately be used to make a beverage or a solid preparation, at the point of taxable event, they remain in powder form. Consequently, they do not fall within the expression ‘beverage’ - The appeals are dismissed [Read less]

2026-VIL-1707-CESTAT-DEL-ST | CESTAT SERVICE TAX

Service Tax - Taxability of amount claimed on premature cancellation of lease agreement - Appellant, owner of a hotel, leased it to a lessee for eleven years on monthly rent with a condition that either party cancelling the agreement could recover the rent for the entire period. The lessee vacated the premises well before the term. The Appellant served a legal notice claiming the rent for the remaining period. The matter was finally settled by a compromise agreement under which no compensation, claim or damages were payable by either party. The Revenue demanded service tax on the claimed amount and contended that agreeing to tolerate an act or situation is a declared service under Section 66E(e) of the Finance Act, 1994 - Whether service tax is leviable on the amount claimed on premature cancellation - HELD - The amount was never received, and a compromise agreement was reached under which neither party was to pay any damages to the other. An amount received for default of a contract is in the nature of compensation for breach of contract and is not in the nature of rent. The nature of the payment cannot be rent because the premises would have already been vacated when the agreement was breached. The amount is, in essence, compensation for reneging on the contract. At any rate, when the amount has not been paid, service tax cannot be demanded on such amount - The demand on the legal claim is set aside - Service Tax - Taxability of rent accrued from lessee who vacated premises - Threshold exemption - The Appellant had paid service tax on rent actually received for part of the period after claiming the threshold exemption available to small service providers. For the month in which the lessee vacated, no rent was paid. The Revenue contended that non-recovery of consideration does not negate taxability once the rent has accrued - Whether service tax is payable on rent not received and whether the threshold exemption is to be reckoned - HELD - There is no evidence that rent was paid for the month in which the premises were vacated. Service tax cannot be charged on rent not paid. If the Appellant is entitled to the exemption available to small service providers, it cannot be denied. The service tax payable, after considering the rent actually received and the exemption available, needs to be re-computed, subject to verification - The demand for the month in which no rent was received is set aside, the threshold exemption is to be reckoned and any service tax already deposited is to be appropriated towards the confirmed demand - Service Tax - Undervaluation of rent under rival agreements with second lessee - The Revenue relied on an agreement providing a higher monthly rent and the statement of the lessee's director confirming it. The Appellant relied on a subsequent agreement showing a much lower rent and contended that the higher rent agreement was not enforceable - Whether service tax is payable on the higher rent - HELD - Both agreements are on stamp papers and bear the signatures of the parties. The lessee confirmed in his statement that the higher rent was correct. The rent was substantially higher when the hotel was let to the first lessee. After the premises were vacated, the rent could have been reduced to attract another tenant. A rent nowhere comparable to the previous rent is not realistic, while the higher rent appears more realistic - The demand on the higher rent paid by the second lessee is upheld - Service Tax - Extended period of limitation - Revenue alleged that the Appellant suppressed the actual lease agreements, filed incorrect returns and created agreements to undervalue the services - Whether extended period of limitation is invocable and whether interest and penalty are sustainable - HELD - In the factual matrix of the case, there are sufficient grounds to invoke the extended period of limitation. As the demand stands reduced, the interest and penalty under Section 78 shall be reduced proportionally - The extended period is upheld and the appeals are partly allowed. [Read less]

2026-VIL-1705-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise – Clandestine removal and undervaluation – Evidentiary value of private records, computer printouts and statements – Appellant, a manufacturer of Non-Alloy Steel Ingots, was alleged to have cleared goods without payment of duty and to have undervalued goods, based on documents and computer printouts recovered during search from its office premises and from the premises of a dealer, statements recorded during investigation, excess electricity consumption and an FIR for theft of electricity. The Commissioner confirmed the demand of duty with interest and imposed penalty under Section 11AC – Whether the charge of clandestine manufacture and clearance and under-invoicing is established on the basis of such documents, printouts, statements and electricity consumption - HELD - The mere retrieval of a document from the premises or the computer system of an assessee, without more, cannot by itself be treated as conclusive proof of clandestine clearance or undervaluation. The records were maintained under a separate caption and were retrieved as printouts from a computer in the Appellant's office. The Revenue relied principally on the statement of one employee, who had severed his connection with the Appellant shortly after the statement was given. Suspicions, howsoever strong, cannot take the place of proof. The Revenue made no corroborative exercise to establish the identity, existence and transactions of the separately captioned entity. The other documents did not bear the name of the Appellant. The link with the Appellant was sought to be established only through the certification and statement of its authorised signatory. A document recovered from the premises of a dealer with whom the Appellant has no ownership or organisational nexus was treated as the Appellant's document without independent verification of authorship, source or identity of the parties named therein. A statement made for one set of documents cannot be extended to an unconnected set recovered from third-party premises. The conditions of Section 36B of the Central Excise Act, 1944, including the requisite certificate identifying the manner of production of the computer output, were not complied with. Electronic records, in the absence of the procedural safeguards mandated under Section 36B, cannot be accorded evidentiary value to found a demand of this nature. Power consumption can vary on account of fluctuations in voltage, load-shedding, machine efficiency, idle running and other operational variables. In the absence of a scientifically verified norm of consumption per MT of finished goods for the particular furnace, a comparison of units consumed with the quantity recorded does not constitute cogent evidence of unaccounted production. An FIR alleging theft of electricity, without anything linking it to a quantified figure of unaccounted manufacture and clearance, remains collateral to the proceedings. The demand founded on electricity consumption had also been dropped by the Department in de novo proceedings in the Appellant's own case. A charge of clandestine manufacture must be tested against the physical capability of the plant to produce the quantum of goods alleged. The Appellant had intimated the department in 2005 and 2006 that its second furnace had become operational. Even on the combined capacity of both furnaces, the Revenue did not demonstrate how the alleged production could have been achieved. No case was set up that the Appellant had any third or fourth furnace or any other undisclosed manufacturing facility. The statements relied upon were not tested in the manner mandated under Section 9D(1) of the Act, and the adjudicating authority did not apply its mind to this requirement. Such untested statements cannot be read in evidence. Clandestine removal cannot be presumed merely on the basis of note-book entries, private records or third-party computer printouts unless corroborated by independent and tangible evidence such as verification of excess production with reference to installed capacity and consumption of raw materials or power, movement of goods through transporters and identifiable flow-back of funds. None of these corroborative parameters was satisfied. The charge of under-invoicing was also not satisfactorily established. As the charge of clandestine removal and under-invoicing does not sustain, no penalty can be imposed - The demand of duty along with interest is set aside, the penalty under Section 11AC read with Rule 25 of the Central Excise Rules, 2002 is dropped and the appeal is allowed. [Read less]

2026-VIL-1144-DEL | High Court SGST

GST - Limitation under Section 74(2) of the CGST Act, 2017 - Date of Form GST DRC-01 versus date of substantive show cause notice - Petitioner contended that the proceedings were initiated only on the date appearing on Form GST DRC-01, which was later than the last date for issuance of notice under Section 74(2), while the substantive show cause notices under Section 74(1) bore earlier dates within the period - Whether the date appearing on Form GST DRC-01 renders the substantive SCN barred by limitation under Section 74(2) - HELD - Section 74(2) requires the proper officer to issue the notice under Section 74(1) at least ... [Read more]

2026-VIL-1698-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Cess on Tea paid under registration of sister unit - Cross-adjustment across distinct registrations - Appellant, a manufacturer of tea holding two Central Excise registrations, filed ER-1 returns for clearances from its expansion unit but, owing to an unintentional clerical error of its accountant, deposited the corresponding Cess on Tea under the registration of its sister unit - Department demanded the Cess under Section 11A under the registration of the expansion unit - Whether the Cess paid under the registration of the sister unit can be adjusted against the demand raised under the registration of the... [Read more]

2026-VIL-1697-CESTAT-ALH-CE | CESTAT CENTRAL EXCISE

Central Excise - Interest on refund of amount deposited during adjudication - Adjudicating Authority granted the refund with interest at 6% from three months after filing the refund claim, - Commissioner (Appeals) rejected the claim of interest at 12% from the date of deposit - Whether the Appellant is eligible for interest from the date of deposit to the date of refund - HELD - The Allahabad High Court has affirmed the view of the Tribunal that Section 11B of the CEA, 1944 would not be applicable where the applicant is not claiming refund of duty but refund of a revenue deposit - In case of refund of revenue deposit, wher... [Read more]

2026-VIL-1154-MEG | High Court VAT

Meghalaya VAT Act, 2003 - Scrutiny of returns under Section 39 of the Meghalaya VAT Act - The Petitioner, challenged the Scrutiny Reports and Notices for curing defects in returns issued under Section 39 for the period from 2007 to 2017, contending that no notice under Section 35 was issued - The Respondents relied on a notice calling for production of books of account issued in 2017 and alleged suppression of that notice by the Petitioner - Whether scrutiny under Section 39 can be validly initiated without notice under Section 35, and whether such notice can be issued to a registered dealer in view of Section 35(3) - HELD - The language of Section 39(1) is clear and unambiguous, it mandates scrutiny of returns furnished by a registered dealer to whom notice has been issued by the Commissioner under Section 35. This is not a mere procedural formality but a condition precedent that goes to the root of authority and jurisdiction to undertake scrutiny - The words "to whom notice has been issued" qualify the class of registered dealers whose returns can be scrutinised, and reading Section 39 as allowing scrutiny of every return irrespective of notice is a misreading - Where a statute prescribes a particular manner for doing an act, it must be done in that manner alone, and an authority cannot assume jurisdiction in a manner not authorised - Section 35(3) provides for notice only to dealers other than a registered dealer. A registered dealer is bound to file returns under Section 35(2) without notice. The only harmonious construction is that Section 39 applies to registered dealers who were previously unregistered and were brought under the tax net by notice under Section 35(3). It does not apply to a dealer who was always registered and filed returns without notice - The specific provision cannot be ignored or read down – Further, the notice calling for books of account was for assessment purposes and not a notice to furnish returns. Even if treated as such, it would be invalid as Section 35(3) does not authorise notice to registered dealers - The mandatory precondition of notice under Section 35 is not satisfied, and the Scrutiny Reports and Notices under Section 39 are set aside and quashed - The writ petition is disposed of - Applicability of limitation under Section 57 to scrutiny of returns under Section 39 of the Meghalaya VAT Act - Notices for curing defects in returns for the period from 2007 to 2017 were issued in 2023. The Petitioner contended that no assessment can be made after five years from the end of the tax period under Section 57 and that the scrutiny was barred by limitation - Whether the five-year limitation under Section 57 applies to scrutiny proceedings under Section 39 - HELD - The scheme of the Act providing the five-year period of limitation under Section 57 is also to be applied in respect of Section 39. Authorities cannot be allowed to circumvent the limitation provisions for completing assessment by recourse to the powers of summary adjustment under the scrutiny provision. The Respondents' argument based on specific provisions prevailing over general provisions supports the Petitioner - The scrutiny proceedings and notices issued in 2023 for the period from 2007 to 2017 are beyond limitation and are set aside - Delegation of power to exercise scrutiny under Section 39 of the Meghalaya VAT Act - The Petitioner challenged the competence of the Superintendent of Taxes to initiate scrutiny proceedings under Section 39, contending that the power was not delegated by notification. The Respondents contended that the Superintendent was delegated the power under the Act read with the Rules and relied on internal orders and circulars - Whether the Superintendent of Taxes had jurisdiction and authority to initiate proceedings under Section 39 - HELD - Section 26 of the Act read with Rule 3 of the Rules mandates that the Commissioner "shall" delegate powers by a notification in the Official Gazette. The Respondents did not place on record any notification published in the Official Gazette delegating Section 39 powers to the Superintendent of Taxes. Reliance on internal orders and circulars does not satisfy the statutory requirement - The delegation is not established, and the proceedings under Section 39 are set aside. [Read less]

2026-VIL-164-GSTAT-GZB | Tribunal SGST

GST - Maintainability of appeal before the Tribunal where the penalty is below the monetary limit prescribed under Section 112(2) - Appellant challenged the Order-in-Appeal upholding the penalty under Section 129 imposed for not entering vehicle details in Part B of e-way bills. The penalty was below the monetary limit specified for appeals before the Tribunal - Whether the Tribunal can hear an appeal where the penalty is below the monetary limit specified in Section 112(2) - HELD - Section 112(2) gives the Tribunal discretion to refuse admission of an appeal below the specified monetary limit. It does not completely bar such an appeal. The appeal raises a question about an express exception in the Rules governing the movement of goods and the legality of the penalty. The Tribunal therefore exercises its discretion to hear and decide the appeal on merits - Penalty under Section 129 for not filling Part B of e-way bill during initial movement from consignor's place of business to transporter's premises within the State - Goods were sent from the Appellant's additional place of business to the transporter's receiving premises in the same State, a distance of less than 30 km, to be brought together before onward dispatch to the consignee - The vehicle number was not entered in Part B of the two e-way bills. The adjudicating authority imposed penalty under Section 129 - Whether leaving Part B unfilled during that journey is a breach attracting Section 129 - HELD – The third proviso to Rule 138(3) permits vehicle details to be left unfilled in Part B where goods are transported up to fifty kilometres within the State from the consignor's place of business to the transporter's place of business for further transportation. It does not exempt every journey of less than 50 km. The party claiming the benefit must prove that the conditions of the proviso are met. The recorded facts about the originating depot, the identified transporter's warehouse and the initial journey for consolidation bring the movement within the proviso - Explanation 2 to Rule 138(3) expressly preserves the exceptions in the third proviso, so the contention that every road movement without Part B is invalid overlooks them. The proviso to Rule 138(5) deals with a different situation, namely the final journey to the consignee's premises. An omission expressly permitted by the Rules cannot be treated as a breach of those Rules - The decisions on mens rea do not justify a penalty where the omission falls within an applicable statutory exception. This finding is confined to the initial journey, and any later movement remains subject to the requirements applicable to it. The objections on DIN, authentication and Rule 142 summaries are not decided - The Order-in-Appeal and the Order-in-Original are set aside. The penalty is cancelled - The appeal is allowed [Read less]

2026-VIL-1695-CESTAT-ALH-ST | CESTAT SERVICE TAX

Service Tax - Refund of service tax paid under mistake of law on Goods Transport Agency service - Applicability of Section 11B of the Central Excise Act, 1944 - Appellant, a manufacturer of yeast, paid service tax under reverse charge on Goods Transport Agency service, although it was eligible for exemption for food stuff under Notification No. 25/2012-ST as amended, and had not claimed the exemption in its returns - Commissioner (Appeals) rejected the refund on the ground that exemption was not claimed at the time of self-assessment and ignorance of law is no excuse - Whether the amount paid by the Appellant by mistake of law is refundable to the Appellant - HELD - The Commissioner (Appeals) did not dispute that the Appellant was entitled to exemption, so the service tax paid under reverse charge was not payable and was admittedly paid under mistake of law. An amount paid under mistaken notion of law does not take the colour of duty and remains only a deposit, Section 11B refers to claim for refund of duty only and not to other amounts collected without authority of law, and the provisions of Section 11B and its limitation are not attracted. The principle of unjust enrichment does not apply and the Revenue has no authority to retain the amount - The refund of the amount paid is admissible to the Appellant – The appeal is allowed - Service Tax - Interest on refund of amount paid under mistake of law - Rate of interest - Appellant sought interest from the date of respective deposit till the date of refund of the amount paid by mistake of law, which was treated as a deposit - Whether the Appellant is entitled to interest and, if so, at what rate - HELD - Since Section 11B is not applicable to the refund of an amount paid under mistake of law, Section 11BB and the notification prescribing the rate of interest thereunder are also not applicable. Following the decisions of the Tribunal granting interest at twelve per cent per annum on such refunds, the decisions of the High Court upheld by the Supreme Court, and the Tribunal's decision in the Appellant's own case granting interest at the same rate, the Appellant is eligible for interest at twelve per cent from the date of deposit till the date of payment of the refund - The impugned order is set aside, the Revenue is directed to refund the amount along with interest at twelve per cent per annum from the date of respective deposits. [Read less]

2026-VIL-1137-DEL | High Court SGST

GST - Section 6(2)(b) of the CGST Act, 2017 - Bar on parallel proceedings on the same subject matter - Petitioner was proceeded against by the Central authorities under Section 74 for availing ITC on invoices without receipt of goods from a supplier, while the State authorities had earlier initiated separate proceedings under Section 73 for different financial years in respect of ITC from the same supplier - Whether the Central proceedings are without jurisdiction in view of Section 6(2)(b) of the CGST Act because the State authorities had earlier initiated proceedings concerning the same supplier - HELD - The bar under Section 6(2)(b) operates only where the subsequent proceedings are in respect of the same subject matter. The Supreme Court in in M/s Armour Security case has explained that the subject matter has to be identified with reference to the particular tax liability, deficiency or obligation arising from the alleged contravention. Whether two proceedings concern the same subject matter cannot be determined merely by identifying a common supplier or by observing that both relate to ITC, but requires examination of the tax period, the particular transactions and invoices, the precise ITC involved, the allegations in the respective notices and the liability each authority seeks to determine - The State proceedings were initiated separately for different financial years and under Section 73, whereas the Central proceedings were under Section 74 on allegations of fraud, wilful misstatement or suppression. The State proceedings initiated or concluded after the Central initiation cannot render the Central proceedings without jurisdiction. The exercise is essentially factual and requires examination of the respective notices, replies, orders and transaction-wise material, and the appellate authority is better placed to examine whether, to the extent of any particular liability, the bar is attracted - The contention that the Central proceedings are wholly barred by Section 6(2)(b) is not accepted, and the Petitioner is not precluded from raising the objection before the appellate authority - Writ jurisdiction under Article 226 against an Order-in-Original under Section 74 despite statutory appellate remedy - Petitioner challenged the Demand-cum-Show Cause Notice and the Order-in-Original confirming ITC demand, interest and penalty - Whether the High Court should interfere under Article 226 notwithstanding the availability of the statutory appellate remedy - HELD - The mere description of an objection as one of jurisdiction or natural justice does not by itself require the Court to exercise writ jurisdiction, and the Court must examine the substance of the objection and the nature of the adjudication. The order rests independently on the finding of non-receipt of goods and availment of ITC on goods-less invoices recorded with reference to Section 16(2)(b), and the invocation of Section 74(1) is based on the conclusion of fraud, wilful misstatement or suppression, so it is not established that the demand is founded on a new and unrelated ground - The order records that opportunities of personal hearing were granted and that replies were considered, and an apparent date discrepancy cannot by itself establish that no hearing was granted but at the highest calls for verification of the record – Further, clubbing of more than one financial year does not by itself render the proceedings void, and limitation and the sufficiency of material to establish the ingredients of Section 74 are matters for the appellate authority. Writ jurisdiction is not intended to substitute the statutory appellate examination of the merits - The challenge to the show cause notice cannot survive independently once a reasoned Order-in-Original has been passed - The Writ Petition is dismissed [Read less]

2026-VIL-1141-GUJ | High Court SGST

GST - Confiscation under Section 130 of the CGST Act, 207 - Rule 138B of the CGST Rules, 2017 - Petitioner challenged the show-cause notice in Form GST MOV-10 and the order in Form GST MOV-11 confiscating goods in transit, issued afresh after an earlier round of litigation in which the notices and orders were quashed and the matter remanded for reconsideration – Petitioner contention that Rule 138B was violated as the proper officer was not empowered by the Commissioner, and that the notice and the order were issued by the same proper officer who could not be the judge in his own case - Whether the notice and order are liable to be quashed for violation of Rule 138B of the CGST Rules - HELD - Rule 138B provides for verification of documents and conveyances by the Commissioner or a proper officer empowered by him. On examination of the documents on record, there is no violation of the said provision, as the physical verification of the conveyance was carried out by the proper officer authorised by the Commissioner - A similar contention under Rule 138B was examined in the earlier judgment, where the Court set aside the orders and directed fresh orders. Pursuant thereto the proper officer issued a fresh show-cause notice, supplied the documents of spot visit of the suppliers and the statement of the driver, and asked the Petitioner to remain present for a personal hearing, but the Petitioner chose to file a reply instead - After considering the reply, the authority passed the order after threadbare investigation, concluding that the dealers were carrying out illegal trading by receiving invoices from fake dealers without actual supply of goods, and the orders cancelling their registrations were also supplied to the Petitioner - No violation of Rule 138B is found and the contention is rejected - The orders in Forms GST MOV-04 and MOV-06 were supplied to the person in charge of the conveyance, Form GST MOV-10 was supplied to the Petitioner, and the documents relating to cancellation of registration of the party with whom the Petitioner was transacting business were also supplied - Mere dissatisfaction with the manner in which the adjudicating authority has dealt with the record cannot by itself furnish a ground to bypass the statutory remedy - The petitioner is relegated to the alternative remedy of appeal before the appellate authority – The writ petition is dismissed [Read less]

2026-VIL-1138-ALH | High Court SGST

GST – Application for Anticipatory bail - Maintainability where only summons under Section 70 of the CGST Act, 2017 has been issued and no order of arrest under Section 69 has been passed - Applicant sought anticipatory bail in an investigation into alleged clandestine manufacture and clearance of goods without payment of GST - Respondent contending that the application is premature as only summons had been issued - Whether the application for anticipatory bail is premature merely because the Applicant has been summoned under Section 70 and no formal order of arrest exists - HELD - Section 69 deals with power of arrest, whereas Section 70 confers power to summon a person to give evidence or produce documents in an inquiry, and mere issuance of summons does not establish that the person is under arrest or that an order of arrest has been passed. However, the absence of an existing order of arrest is not an absolute bar to the exercise of jurisdiction for anticipatory bail where the applicant demonstrates a real, genuine and reasonable apprehension of arrest founded on the facts of the case - Searches had been conducted at several premises, machinery and material seized, the alleged revenue evasion quantified and the co-accused connected with the activity already arrested, so the apprehension cannot be characterised as fanciful or imaginary - The application cannot be rejected merely on the ground that no formal order of arrest has yet been placed on record - Grant of Anticipatory bail - Grant of extraordinary protection in alleged organised clandestine manufacture and clearance - Applicant, though not the principal person identified, was summoned on several occasions and allegedly did not cooperate, while the co-accused had been arrested - Whether the Applicant has made out a case for anticipatory bail - HELD - The existence of an apprehension of arrest is a condition for invoking the jurisdiction and is not by itself a sufficient ground for grant. The Court considers the nature and gravity of the allegations, the material collected, the role attributed, the stage and requirement of investigation, the possibility of influencing witnesses or tampering with evidence and the necessity of custodial interrogation - An undertaking to cooperate is a relevant circumstance but cannot foreclose the statutory authority to interrogate where necessary. The necessity of custodial interrogation, though not an end in itself, cannot at this stage be completely ruled out having regard to the nature of the allegations, the magnitude of the alleged evasion, the arrest of the co-accused and the alleged non-cooperation despite repeated summons. Personal liberty must be balanced against the legitimate requirement of investigation, and the Court is not required at this stage to record findings on guilt or innocence - The Applicant has failed to establish circumstances warranting anticipatory bail and the application is rejected. [Read less]

2026-VIL-1139-DEL | High Court SGST

GST - Withholding of refund under Section 54(11) of the CGST Act of an amount arising from an Order-in-Appeal - Petitioner, an exporter who paid IGST, succeeded before the Appellate Authority in respect of refund claims - Department reviewed the order and decided to appeal before the GSTAT, and the Commissioner thereafter withheld the refund under Section 54(11) relying on a pending anti-evasion investigation and findings of fraud and malfeasance - Whether the Commissioner rightly invoked Section 54(11) to withhold the refund in the absence of a pending appeal or a stay - HELD - Section 54(11) rests on two distinct, cumulative ingredients: first, the order giving rise to the refund must be the subject matter of an appeal, further proceedings or any other proceedings pending under the Act, and second, the Commissioner must independently form an opinion after hearing that grant of refund is likely to adversely affect the revenue on account of malfeasance or fraud - The expression ‘any other proceedings under this Act is pending’ is deliberately wide and is not confined to a formally instituted appeal. The provision is a self-contained safeguard for protection of revenue operating independently of any stay granted by a Court or Tribunal - The decisions holding that Revenue cannot withhold refund merely on the strength of a proposed or contemplated appeal turned on the singular fact that the case rested only on the first limb with no independent material of malfeasance or fraud. Here the anti-evasion investigation was already underway, the Commissioner examined the tier-wise supply chain, found suppliers non-existent or cancelled, and noted denial of movement of goods by transporters, so the opinion of fraud was based on contemporaneous material and not on a mere apprehension. The subsequent issuance of the show cause notice merely crystallised the allegations arising from the investigation - The challenge to the order withholding the refund cannot be sustained - The Writ Petition is dismissed - Order of the Commissioner under Section 54(11) - Whether appealable under Section 107 and effect on judicial review - Petitioner contended that the order was passed by the Commissioner in an administrative capacity and not by an Adjudicating Authority, so that no alternative remedy under Section 107 was available - Whether absence of appeal under Section 107 against an order under Section 54(11) bars judicial review - HELD - Section 54(11) expressly confers the power to withhold refund upon the Commissioner, which is distinct from the adjudicatory mechanism under Sections 73 and 74 and the appellate remedy under Section 107. The absence of an appeal under Section 107 does not exclude judicial review under Article 226. However, since it is an admitted position that an appeal against the Impugned Order already stands filed before the GSTAT, it is not appropriate or necessary in writ jurisdiction to adjudicate disputed questions concerning the genuineness of the suppliers, actual movement of goods or the correctness of the findings in the Impugned Order and the show cause notice - The Petitioner is left at liberty to raise all contentions before the GSTAT. [Read less]

2026-VIL-175-AAR | Advance Ruling Authority SGST

GST - Transfer of business to a Private Limited Company without consideration, Scope of supply - Applicant, a partnership concern proposed to transfer its entire business as a going concern, with all assets, liabilities and employees, to a private limited company promoted by the same persons, without consideration, and thereafter to cease business and surrender its GST registration - Whether the transaction of transfer of business by way of merger of two registrations/distinct persons would constitute supply under the GST law - HELD - The concept of scope of supply under Section 7 of the CGST Act is an inclusive provision which goes beyond the expression 'all forms of supply of goods or services or both made for a consideration by a person in the course or furtherance of business'. Transfer of business is done neither in the usual course of business nor for furtherance of business, yet by virtue of the inclusive nature of the scope of supply, it can be regarded as supply - As per the proposed MoU, all rights, title, ownership, interest in the business, assets and customers, including liabilities, are transferred and employees continue in service. Such a transfer of business, even if without consideration and not in the usual course of business, is a supply under the CGST Act, 2017 - The question is answered in the affirmative - Nature of supply in transfer of business - Applicant proposed to transfer its entire business along with assets and liabilities to a private limited company - Whether the transaction would amount to supply of goods or supply of services - HELD - Entry 4(c) of Schedule II provides that where a person ceases to be a taxable person, goods forming part of the assets of the business are deemed to be supplied unless the business is transferred as a going concern to another person, which shows that transfer of business as a going concern does not amount to supply of goods - 'Services' under Section 2(102) means anything other than goods, money and securities, and activities or transactions featuring in Schedule II must be either a supply of goods or a supply of services. If transfer of business as a going concern to another person is not a supply of goods, it must be a supply of services - The transaction amounts to supply of services - Exemption to transfer of going concern under Serial No. 2 of Notification No. 12/2017-Central Tax (Rate) - Applicant proposed to transfer its business to a private limited company and claimed exemption for services by way of transfer of a going concern, as a whole or an independent part thereof - Whether the transaction would be covered under serial no. 2 of Notification No. 12/2017-Central Tax (Rate) - HELD - The GST Act does not define ‘going concern’; the concept must be understood in common parlance and financial standards, where a going concern is assumed to continue its operations and not be forced to liquidate its assets in the near future - The Applicant furnished no documentary evidence to prove that its business is a going concern, and merely stated that it has a running business and files GST returns regularly - The Authority was not in a position to determine whether the business qualifies as a going concern. However, if it is a going concern by all standards, the transfer of the business is covered by Entry No. 2 - The answer is in the affirmative, subject to the condition that the business qualifies as a going concern by all standards - Leviability of GST on transfer of closing stock and assets where business does not qualify as going concern - Applicant proposed to transfer its entire business, including closing stock and fixed assets, to a private limited company without consideration - Whether GST is leviable on the transfer of existing stock, assets and fixed assets if the transaction is not covered under serial no. 2 of Notification No. 12/2017-Central Tax (Rate) - HELD - If the Applicant's business fails to qualify as a going concern, the transfer of stock of goods, closing stock and assets will be considered as supply of goods by virtue of Entry No. 4(c) of Schedule II of the CGST Act and will be taxed as per the rate applicable for the respective goods. [Read less]

2026-VIL-176-AAR | Advance Ruling Authority SGST

GST - Classification of electric three-wheeler (e-rickshaw) supplied in Completely Knocked Down (CKD) form - Applicant, a manufacturer of battery-operated e-rickshaws, proposed to supply the vehicle to its authorised dealers in unassembled condition for assembly at the dealer's premises, as a single kit under a single invoice, composite price and consignment - Whether the supply of a complete set of components of an e-rickshaw in CKD form, necessary and sufficient for assembly of the finished vehicle, should be classified as the finished vehicle itself or as a set of parts, and the applicable rate of GST - HELD - An e-rick... [Read more]

2026-VIL-174-AAR | Advance Ruling Authority SGST

GST - Exemption under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) to composite supply of milling of food grains for distribution under Public Distribution System - Applicant was engaged in job work of crushing, fortifying and packing food grains supplied and owned by the State Government Food and Supplies Department into flour for distribution through the PDS, receiving cash consideration and non-cash consideration in the form of retention of bran, refractors and gunny bags - Whether the composite supply of service by way of milling of food grains into flour to the State Government for distribution under the Public Distribution System is eligible for exemption under entry No. 3A of Notification No. 12/2017-Central Tax (Rate) - HELD - The supply is a composite supply in which milling is the principal supply, while fortification and packaging are ancillary supplies bundled with it and supplied in conjunction with each other in the ordinary course of business. The value of supply is the transaction value, being the price agreed between the supplier and the recipient, which includes the notional value of the non-cash consideration retained by the Applicant irrespective of the actual price realised on its disposal - The value of goods, being the fortification and packing charges, constitutes less than 25% of the total value of supply. The phrase 'by way of any activity' widens the scope of entry 3A, so that activities related directly or indirectly to the PDS, which figures in the Eleventh Schedule under Article 243G of the Constitution, are covered, and the flour reaches the beneficiaries through that system. Relying on Circular No. 153/09/2021-GST, which requires case-to-case ascertainment of whether the value of goods is up to 25%, the supply fulfils all conditions of entry 3A - The composite supply is eligible for exemption so long as the value of goods does not exceed the threshold limit of 25% of the value of the composite supply - Ordered accordingly - Rate of tax on milling of food grains where exemption under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) is not available - Applicant was engaged in milling of food grains into flour for the State Government Food and Supplies Department for distribution under the Public Distribution System as a composite supply - What shall be the rate of GST on such milling if it does not fall in entry No. 3A - HELD - Where the condition of the notification is not fulfilled, that is, where the value of goods exceeds the threshold limit of 25% of the value of the composite supply, the supply fails to qualify for entry No. 3A and the benefit of exemption must be ascertained on a case-to-case basis - In such a case, GST is leviable at 5% on the total value of consideration under serial no. 26(i)(f) of Notification No. 11/2017-Central Tax (Rate). [Read less]

2026-VIL-177-AAR | Advance Ruling Authority SGST

GST - Exemption under Entry 66(a) of Notification No. 12/2017-Central Tax (Rate) to fees for diploma and certificate programmes of a statutory University - Applicant, a University, propose to introduce diploma and certificate programmes and charge fees from enrolled students - Whether the fees charged from students enrolling in such programmes form part of educational services provided by an educational institution to its students and are exempt under Entry 66(a) - HELD - An educational institution under clause 2(y)(ii) must provide education as a part of a curriculum for obtaining a qualification recognised by any law for... [Read more]

2026-VIL-1706-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax – Classification of transportation of coal and allied services in mining area as Mining of Mineral, Oil or Gas Service or Goods Transport Agency service – Appellant rendered services under work orders of a corporate service recipient, covering transportation or shifting of coal, transportation of rejected coal within mining area, and incidental activities such as excavation, picking of coal material and roof treatment. The demand was confirmed under Mining of Mineral, Oil or Gas Service along with interest and penalty under Section 78 – Whether the services rendered under the work orders are classifiable as Mining of Mineral, Oil or Gas Service or as Goods Transport Agency service, and whether the demand, interest and penalty are sustainable - HELD - Though different work orders were issued, the primary activity undertaken by the Appellant is transportation and all other elements of the contracts are incidental or ancillary to the transportation activity. The amount received for transportation formed the major part of the total receipts in each of the years. Hence, the principal service involved is Transportation Service. As per the Board Circular, a composite service may include intermediary and ancillary services which are not provided as independent activities but are the means for successful provision of the principal service. Such a composite service is to be classified on the basis of the main or principal service. The services rendered by the Appellant are appropriately classifiable under Goods Transport Agency service. The recipients of the transportation service are corporate entities falling within the categories mentioned in Notification No. 30/2012-ST. Therefore, the recipients are liable to pay service tax under Goods Transport Agency service on reverse charge basis under Rule 2(1)(d)(i)(B) of the Service Tax Rules, 1994. Transportation service without consignment notes falls in the negative list under Section 66D(p) and is not taxable. This position is supported by the decision of the Tribunal in Chartered Logistics, which was affirmed by the Apex Court. The issue of transportation service in the mining area being classifiable under Goods Transport Agency service and not Mining Service is no more res integra in view of the decision of the Apex Court in Singh Transporters. Transportation of coal from the pit-heads to the railway sidings within the mining areas does not involve any service in relation to mining of mineral, oil or gas. By applying the principles of essentiality under Section 66F, the services rendered under the work orders are essentially for transportation. As the demand is not sustained, the question of interest or penalty under Section 78 does not arise - The demand of service tax under Mining of Mineral, Oil or Gas Service is set aside along with interest and penalty under Section 78 and the appeal is allowed to this extent - Service Tax – Threshold exemption for Management, Maintenance and Repair Service and Supply of Tangible Goods Service – Appellant was also alleged to have rendered Management, Maintenance and Repair Service and Supply of Tangible Goods Service. The Appellant contended that its turnover from these two services, excluding transportation service, did not exceed the threshold exemption limit in any of the financial years from 2008-09 to 2012-13 – Whether service tax, interest and penalties under Sections 76, 77 and 78 of the Finance Act, 1994 are payable on these two services - HELD - On perusal of the year-wise turnover, the turnover of the Appellant in respect of the two taxable services, individually or jointly, did not exceed the threshold exemption limit of Rs. 10,00,000 except for the financial year 2010-11. The Appellant is liable to pay service tax for the financial year 2010-11 only on the value in excess of the threshold exemption limit. The Appellant is also liable to pay service tax on the entire value for the next financial year 2011-12 as the exemption stands lost. The turnover for the financial year 2012-13 falls within the threshold exemption limit and is not taxable. The Appellant is liable to pay interest on the service tax not paid. As suppression with intention to evade the tax has not been established, no penalty is imposable on this amount. No penalty is imposable under Section 76 of the Finance Act, 1994. The penalty under Section 77 is upheld as it has been imposed for the delay in filing of returns. The amount paid by the Appellant during investigation is to be appropriated against the service tax confirmed along with interest for the two financial years, and the rest may be appropriated from the pre-deposit already made - The demand is confirmed only for the financial years 2010-11 and 2011-12 along with interest, the penalties under Sections 76 and 78 are set aside, the penalty under Section 77 is upheld and the appeal is partly allowed - Service Tax – Demand confirmed without findings for the period April 2013 to March 2014 – Small scale exemption – Periodical show cause notice proposed demand on the basis of income figures for the period April 2013 to March 2014, alleging the same charge as the earlier notice. The impugned order confirmed the demand without recording any finding – Whether the demand for the period April 2013 to March 2014 is sustainable - HELD - The impugned order has not recorded any finding while confirming the said demand. Even if the demand is under the category of Mining of Mineral, Oil or Gas Service, the same cannot be sustained in view of the legal position that the services are classifiable as Goods Transport Agency service. Even otherwise, if the demand is not under that category, it is seen from the records that the Appellant would be entitled to the benefit of small scale exemption for the said financial year - The demand for the period April 2013 to March 2014 is set aside and the appeal is allowed to this extent. [Read less]

High Court Order | High Court SGST

GST - Full Bench Order - Validity of show cause notices and orders without visible digital signature - Electronic authentication through common portal - Notices and orders under Sections 73 and 74 of the CGST Act, 2017 and their summaries in Forms DRC-01, DRC-01A and DRC-07 were made available on the common portal without any visible physical or digital signature - The petitioners contended that they were unsigned documents, a nullity, relying on Rule 26(3) and on the mandatory use of "shall" in Rule 142 and the Forms - Whether such notices and orders are unsigned documents within the meaning of the GST Acts read with the Information Technology Act, 2000 and are a nullity in law - HELD - Forms are subservient to the Rules and legislation and cannot supplant them, so the requirement of inscription of signature in the prescribed Forms cannot override the Rules under which they are prescribed. Rule 26(3), which falls under the Chapter on Registration, does not extend to Chapter XVIII, where the rule making authority has consciously provided for different modes of authentication under different Chapters - Notices and orders under Chapter XVIII are electronically authenticated through the common portal, where the officer is onboarded by means of a digital signature certificate protected by a PIN known only to the holder, registered against his identity, and the system generates a hash value through asymmetric cryptography, which satisfies Sections 3, 3A and 5 of the Information Technology Act and the Second Schedule, with legal recognition under Section 5. The common portal is a secure system accessible only to the proper officer and the registered taxpayer, so verification of the digital signature at the recipient end is not required - A presumption of regularity attaches to the electronic record and electronic signature under the evidence law, which the petitioners failed to rebut, and the absence of a visible digital signature on the PDF version does not render the document invalid. The admission of the State officers in some cases that documents bore no signature may be on account of ignorance of the working of the system, and the earlier decisions taking a contrary view did not have the benefit of the working of the GST system explained by the GST Network - The presence of a digital signature on the Forms is not a requirement on documents covered under Chapter XVIII, and show cause notices and orders electronically authenticated by the proper officer and uploaded on the common portal are valid documents in law, the contrary view not laying down the correct position of law - The Reference is answered accordingly - Service of show cause notice or order by upload on common portal - Additional Notices and Orders tab - Commencement of limitation - Section 169(1)(d) of the CGST Act, 2017 - Petitioners contended that uploading on the common portal cannot be construed as service as the taxpayer is not expected to keep looking at the portal; that limitation should run from actual retrieval, that notices placed in the Additional Notices tab were not seen, and that writ petitions were not barred by delay - Whether uploading of notices and orders on the common portal amounts to valid service and from what date limitation runs - HELD - Section 169(1) provides for service by any one of the methods prescribed, read disjunctively, and under Section 169(1)(d) making the notice or order available on the common portal amounts to service. Under Section 13(2) of the Information Technology Act, receipt occurs when the electronic record enters the designated computer resource, which is the common portal, so the date of upload is the date of receipt. The statute casts a duty of diligence on the taxpayer to make compliances through the common portal, including returns, refund claims and audit, failing which legal consequences follow - Where the portal carries a Note clarifying that notices and orders on adjudication and similar modules are available under the Additional Notices and Orders tab, a taxpayer cannot feign ignorance of service for notices issued after the Note, though the question for notices uploaded earlier was left open for the appropriate forum. Since the notices and orders are valid, the bar of limitation for approaching the writ court on the ground of availability of a statutory remedy is attracted - Uploading on the common portal is valid service, and limitation to avail statutory remedy or to make other compliances runs from the date of upload - The petitioners are allowed liberty to file statutory appeals within two weeks, raising such other grounds - The Reference is answered accordingly - Requirement of Document Identification Number or Reference Number on notices and orders - Petitioners contended that the impugned orders did not quote the Document Identification Number as required by the Board's circulars binding under Section 168, and that the later circular dispensing with it where the Reference Number is shown operates only prospectively - Whether notices and orders not quoting the Document Identification Number are invalid - HELD - The Circulars issued by the Board and adopted by the State are binding on the Revenue under Section 168, and orders which do not quote the Document Identification Number or the Reference Number are not fit to be relied upon. The later Circular clarifies that for communications through the common portal bearing a verifiable Reference Number, quoting of the DIN is not required. Nothing in it makes it prospective, so the document should reflect either number, failing which the order would not be valid in law. The Reference Number is a valid authentication mechanism, verifiable by the taxpayer on the portal - In the individual writ petitions either the Reference Number or the Document Identification Number was quoted in the notices and orders, and they cannot be held invalid on this ground - The Reference is answered accordingly - Maintainability of reference to Full Bench on conflicting Division Bench decisions - Writ petitions were referred to the Full Bench on the issue of unsigned show cause notices and orders, in view of conflicting decisions of coordinate Division Benches on the application of Rule 26(3) of the CGST Rules, 2017 - Petitioners questioned the reference on the ground that the referral order did not frame the questions or indicate any conflict and that the Chief Justice could not authorise a reference administratively - Whether the reference to the Full Bench is maintainable - HELD - Three coordinate Benches had taken conflicting views, one holding the contrary view to be per incuriam, and the earlier Benches did not have the benefit of the live demonstration of the working of the common portal by technical experts of the GST Network. Judicial discipline requires that if two Division Benches of the same High Court take different views, the matter should be referred to a larger Bench, and one Division Bench cannot ignore or refuse to follow an earlier Division Bench of the same Court - There is no infirmity in the referral order. [Read less]

2026-VIL-161-GSTAT-BLR | Tribunal SGST

GST - Detention of goods and levy of penalty under Section 129 at the consignee's premises for non-updation of Part-B of e-way bill - Part-B containing the vehicle number was left unpopulated due to an inadvertent oversight - The Respondent inspected the stationary vehicle, recorded the driver's statement at the Appellant's unit and detained the goods under Section 129(1) for want of Part-B update. The Appellant updated Part-B promptly on being notified and deposited the disputed tax and penalty under protest to secure release of the goods - Whether the detention of goods and levy of penalty under Section 129 at the doorstep of the consignee's premises solely due to an un-updated Part-B, subsequently cured, is legally sustainable - HELD - Section 129 contemplates detention of goods in transit. The vehicle had already completed its inter-state journey and was stationary at the Appellant's registered gate, as corroborated by the driver's statement - Intercepting a vehicle that has finished its transit at the delivery address to invoke transit-detention provisions is a misapplication of the statute. Section 126 provides that no penalty shall be imposed for minor breaches that are easily rectifiable and involve no revenue loss – Further, the omission of Part-B was a clerical slip committed in the early weeks of the e-way bill mechanism. Tax on the underlying supply stood paid through valid tax invoices, and Part-A was generated - Section 129 is not a strict liability provision. Penalty cannot be sustained in the absence of intention to evade tax, and the Revenue cannot substitute a missing Part-B field with a presumption of tax evasion - Circular No. 64/38/2018-GST directs that minor discrepancies where primary documents exist should not attract proceedings under Section 129. Transforming a rectifiable paperwork delay into a penalty at the consignee's doorstep violates the doctrine of proportionality and reasonableness - The Order-in-Appeal is set aside and the appeal is allowed [Read less]

2026-VIL-167-GSTAT-DEL-NAPA | Tribunal SGST

GST - Anti-profiteering - Validity of re-investigation by the DGAP pursuant to remand by the Competition Commission of India after the Delhi High Court held the methodology in real estate cases to be flawed - Application alleged that the Respondent, a real estate developer, had not passed on the benefit of additional input tax credit to a homebuyer. The DGAP submitted an investigation report. The Competition Commission of India remanded the matter under Rule 133(4) as the methodology was held to be flawed by the Delhi High Court. The Respondent contended that the observation in the High Court judgment was not a direction for universal re-investigation, that it was not a party to those proceedings, and that the Commission had no power to reopen a concluded investigation - Whether the re-investigation is void ab initio for want of jurisdiction - HELD - The infirmity identified by the High Court related to the methodology for computing profiteering and was not peculiar to the parties before it. The relief granted in that case was confined to the parties. The legal principle laid down on methodology is the ratio decidendi and is binding on the Tribunal - The CCI decision to remit pending real estate matters for reinvestigation must therefore be viewed as an attempt to secure uniformity, consistency and conformity with the binding judicial precedent, rather than as an impermissible exercise of suo motu review. The object of the remand was to cure the legal infirmity in the investigative methodology - The Respondent not being a party to the High Court proceedings does not confer a right to have the matter determined on a methodology judicially found to be unsustainable - The Respondent did not demonstrate any specific statutory prohibition or jurisdictional limitation violated - The re-investigation is not without jurisdiction and is not void ab initio - Whether the DGAP became functus officio after submitting the original report and whether a fresh reference under Rule 128 was necessary - The DGAP submitted its original report. The proceedings before the erstwhile Authority had not culminated in a final order when its tenure ended. The Respondent contended that the DGAP could not conduct a second investigation without a fresh reference from the Standing Committee under Rule 128 - Whether the DGAP became functus officio and whether a fresh reference was mandatory before re-investigation - HELD - The doctrine of functus officio applies to a quasi-judicial authority that has finally discharged its function. The original report was rendered infirm by the subsequent judicial pronouncement as it was based on a flawed methodology. The proceedings had not culminated in a final order. Rule 133(4) empowers the Authority to remit the matter to the DGAP for re-investigation. The DGAP acted pursuant to a lawful remand order and not suo motu. The original reference under Rule 128 remained alive. The remand did not necessitate a fresh reference. The DGAP was merely directed to correct the methodology and submit a fresh report in the same proceedings - The DGAP did not become functus officio. A fresh reference under Rule 128 was not required - Limitation for submission of the DGAP report under Rule 129(6) in re-investigation proceedings - The re-investigation was initiated after the remand. The report was submitted well beyond the six months provided under Rule 129(6) and the maximum extended period. The Respondent contended that the proceedings were barred by limitation and that the extension granted by the Tribunal was ultra vires - Whether the re-initiated proceedings are barred by limitation under Rule 129(6) and whether the extension is ultra vires - HELD - Rule 129(6) requires the DGAP to submit its report within six months or within such extended period as may be granted by the Authority - The Delhi High Court has held that the Rules do not provide any consequence on lapse of the time limits. The anti-profiteering provisions are beneficial legislation which must receive liberal construction in favour of the consumer. The time limit for furnishing the report is directory and not mandatory. The proceedings do not abate on lapse of the time limit. The Tribunal had earlier affirmed this position. Though the delay was substantial, it occurred due to the need to obtain complete documents from the Respondent. The Respondent cannot take advantage of its own delay in producing documents. The extension granted by the Tribunal was within the spirit of Rule 129(6) - The proceedings are not barred by limitation - Alleged violation of natural justice due to change in methodology during anti-profiteering proceedings - The Respondent contended that the methodology was changed mid-proceeding without hearing, defeating its legitimate expectation - Whether the Respondent was denied natural justice due to the alleged change in methodology - HELD - The change in methodology was not arbitrary. It was mandated by the judgment of the Delhi High Court. The Respondent was given notice of the re-investigation and an opportunity to submit documents - The fresh report was served on the Respondent and the Tribunal issued notice calling for objections. The Respondent filed written submissions and was heard extensively on its jurisdictional and legal objections. The Respondent chose not to address the merits of the profiteering computation and confined itself to preliminary objections. A party that deliberately elected not to contest the merits cannot allege a violation of natural justice - There was no violation of natural justice - Contravention of Section 171(1) by non-passing of benefit of additional input tax credit to homebuyers - The DGAP found that the input tax credit available to the Respondent as a percentage of purchase value was higher in the post-GST period than in the pre-GST period. The benefit per square foot was computed on the basis of the total savings for the project divided by the total saleable area - Whether the Respondent contravened Section 171 by failing to pass on the benefit of additional input tax credit to eligible homebuyers - HELD - Section 171(1) mandates that any benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. It is beneficial legislation designed to prevent unjust enrichment and must receive a purposive construction. The obligation is discharged only by actual transmission of the benefit. Once the DGAP determines on the basis of the Respondent's own records that a benefit has accrued and has not been passed on, the evidential burden shifts to the Respondent - The Respondent produced no revised price list, credit note, refund voucher, adjusted invoice or correspondence with any homebuyer. The findings of the DGAP remain unchallenged and uncontroverted. The Respondent cannot approbate and reprobate by refusing to engage with the merits and then asserting that the findings are unsupported - The entire period of contravention was completed before Section 171(3A) came into force, so no penalty is leviable under that provision - The Respondent has contravened Section 171(1). The DGAP report is accepted. The benefit shall be passed on to the eligible homebuyers in proportion to their sold areas within three months along with interest at 18 per cent per annum in terms of Rule 133(3)(b). No penalty is imposed. [Read less]

2026-VIL-165-GSTAT-LCK | Tribunal SGST

GST - Penalty under Section 129(3) for address discrepancies in documents accompanying goods in transit - Goods were intercepted and detained on the ground that the address in the invoice and transport documents differed from the registered principal place of business of the Appellant. Penalty was imposed under Section 129(3) - Whether the penalty under Section 129(3) is sustainable on the basis of discrepancies relating to the address and particulars of the Appellant, without sufficient evidence establishing contravention and intent to evade tax - HELD - The Department was required to establish the alleged contravention t... [Read more]

2026-VIL-162-GSTAT-JLN | Tribunal SGST

GST - Validity of Order-in-Appeal dismissing appeal without hearing and without a speaking order - First Appellate Authority dismissed the appeal by a one-page order without considering the adjournment request - Whether the Order-in-Appeal, passed without affording an opportunity of hearing and without a speaking order - HELD - Section 107(8) of the CGST Act requires the Appellate Authority to give the Appellant an opportunity of being heard. Section 107(12) requires the order to be in writing and to state the points for determination, the decision thereon and the reasons for such decision. Section 107(11) requires the App... [Read more]

2026-VIL-1696-CESTAT-KOL-CE | CESTAT CENTRAL EXCISE

Central Excise - Reliance on statements recorded under Section 14 without compliance with Section 9D of the Central Excise Act, 1944 - Revenue alleged that the Appellant availed and utilised CENVAT Credit on invoices of registered dealers without receipt of goods, relying principally on statements recorded under Section 14 of persons associated with the dealers, which the adjudicating authority used directly without examining the makers - Whether the statements recorded under Section 14 can be relied upon to prove the truth of their contents without following the procedure under Section 9D - HELD - Not every statement recorded during investigation automatically acquires substantive evidentiary value. Save in the exceptional circumstances in Section 9D(1)(a), the statement has to pass through the procedure under Section 9D(1)(b), requiring the examination of the maker as a witness before the adjudicating authority and a determination, for reasons recorded in writing, that the statement deserves to be admitted in evidence. The record did not disclose that this exercise was undertaken or that the case fell within any exceptional circumstance, and where the procedure is not followed the statements have to be eschewed from consideration as not relevant for proving the truth of their contents. The statement of the vehicle owner also cannot be admitted as substantive evidence without examination - The statements cannot be relied upon, and the case of the Revenue, constructed on a chain of statements of third parties, dealers and co-accused persons, fails - Central Excise - Admissibility of electronic data retrieved from hard disk seized from third party - Section 36B of the Central Excise Act, 1944 - Revenue relied on electronic data and digital RG-23 records retrieved from a hard disk seized from the premises of a third party dealer, which was not recovered from the Appellant, and no certificate was obtained or annexed at the time of seizure, extraction or reliance - Whether the electronic data retrieved from the hard disk is admissible as evidence against the Appellant - HELD - Section 36B, which is pari materia with Section 65B of the Indian Evidence Act, is a self-contained code under which a certificate identifying the electronic record, describing the manner in which it was produced and giving particulars of the device, signed by a person in a responsible official position, must be produced under Section 36B(4), and its mandatory nature has been consistently enforced. Mere recovery of a hard disk from a third party does not establish the authenticity, integrity or correctness of every entry or the Appellant's participation in the alleged paper transactions, and without certification the contents remain unauthenticated secondary hearsay evidence - The electronic data is legally inadmissible as substantive evidence against the Appellants, and the case built on uncertified digital extractions fails on this count - Central Excise - Denial of CENVAT Credit on allegation of non-receipt of goods - Evidence of non-transportation and upstream irregularities - Revenue alleged that goods were not transported and received, relying on sample checks of vehicle numbers on the VAHAN portal showing vehicles incapable of carrying the goods, a statement of a vehicle owner, a delayed search at the premises of the alleged non-existent manufacturer and the cancellation or irregularities of upstream suppliers, while the Appellant produced valid cenvatable invoices, made payment and recorded receipt and consumption in its statutory books - Whether the demand of CENVAT Credit, interest and penalty on the Appellant company is sustainable - HELD - Under trade practice the dealer arranges freight and delivery, and the law does not cast an unworkable burden on the manufacturing buyer to verify the registration credentials of transport vehicles, nor can it be penalised for clerical discrepancies in vehicle numbers recorded by upstream suppliers once goods are received and accounted for in the stock registers. The Department checked only a small sample of vehicles and was required to establish non-transportation with respect to each specific invoice, and data from public databases is susceptible to errors and cannot be irrebuttable proof dispensing with independent physical verification such as toll gate logs or factory entry registers. The condition of an upstream manufacturer's premises, searched more than two years after the invoices, cannot establish its status for the earlier period, and ignorance of an upstream supplier of subsequent dealings or cancellation of registration cannot by itself prove non-receipt of goods by the Appellant. The Revenue was required to establish a direct, unbroken evidentiary link connecting upstream defects to the specific consignments received, and cannot extend isolated suspicion to declare all transactions fictitious. In absence of admissible evidence establishing non-receipt of inputs, fraudulent collusive activity or cash flow back, the documentary evidence of the Appellant was not displaced - The demand of CENVAT Credit along with interest and equivalent penalty on the Appellant company is unsustainable and set aside - Central Excise - Penalty on Director under Rule 26 of the Central Excise Rules, 2002 - Personal penalty was imposed on the Director of the Appellant company on the allegation of involvement in the irregular availment of CENVAT Credit by procurement of fake invoices - Whether personal penalty under Rule 26 on the Director is sustainable - HELD - Vicarious personal liability cannot be automatically fastened upon a Director merely by virtue of his executive designation or corporate position. To invoke Rule 26, the Department carries a strict burden to prove mens rea, active personal participation and specific overt acts showing that the individual knowingly dealt with goods liable to confiscation or consciously arranged fraudulent transactions, requiring positive, transaction-specific proof of actual knowledge or reasonable belief that the goods were liable to confiscation. The Revenue failed to adduce any admissible evidence on this count, and the main demand against the company stands set aside - The personal penalty on the Director is wholly unsustainable and is set aside - Central Excise - Deposit made during investigation as admission of liability - Revenue sought to draw an adverse inference from the amount deposited by the Appellant during the course of investigation, treating it as an implicit admission of guilt, while the Appellants contended that the deposit and the averments of the Director were made under threat, coercion or duress - Whether the deposit made during investigation amounts to an admission of liability - HELD - An interim deposit or payment made by an assessee during search, seizure or investigative proceedings, often under duress or coercion or on apprehension of coercive penal action, cannot be elevated to the status of an unconditional admission of tax liability - The deposit made during the investigation cannot be equated to an admission of guilt or liability. [Read less]

2026-VIL-1134-MAD-CU | High Court CUSTOMS

Customs - Removal of known encumbrance from encumbrance certificate after sale - Rule 9(6) to 9(10) of the Security Interest (Enforcement) Rules, 2002 - Sale certificate was issued by the Authorised Officer of the Appellant bank disclosing the known encumbrances, including the attachment effected by the Central Excise Department, the sale was on "as is where is" basis with the purchaser to clear statutory liability, and neither the bank nor the auction purchaser discharged the dues of the Department - Appellant bank sought a mandamus to remove the attachment from the encumbrance certificate to enable registration of the sale certificate, and the Single Judge dismissed the writ petition - Whether the Appellant bank has a legal right to demand the registration department to remove the encumbrances from the encumbrance certificate without settling the dues payable under those encumbrances, when the sale certificate discloses the known encumbrances - HELD - The sale notice and sale certificate under Rule 9 are based on the principle of caveat venditor, requiring the bank to disclose known encumbrances, while the auction purchaser must also be vigilant, and ignorance of Rule 9(7) does not excuse the purchaser from depositing the amount payable towards the dues of the known encumbrances - Rule 9(6) to 9(10) are mandatory and have to be strictly adhered to, and the sale to the purchaser is only subject to the known encumbrances disclosed in the sale certificate. The property can be delivered free from encumbrances only on deposit of money under Rule 9(7). Directing the registration department to remove the encumbrance would indirectly set aside the disclosures made in the sale notice and sale certificate and amount to achieving what could not be done directly, and the purchaser having participated in the auction with eyes wide open cannot seek removal without discharging the dues. There is no estoppel against law on the part of the Department - The primary issue is held against the Appellant and the auction purchaser, the writ appeal is dismissed - Maintainability of writ petition by bank after issue of sale certificate - Functus officio - Sale certificate was issued in favour of the auction purchaser and registered by the Sub Registrar, and the Department contended that the Appellant bank had become functus officio and the writ petition was not maintainable - Whether the Appellant bank has become functus officio after issuance and registration of the sale certificate and whether the writ petition filed by the bank is maintainable - HELD - The bank becomes functus officio only after the debt payable to it is fully recovered and its statutory right to hold or further enforce security against the remaining properties or assets of the borrower completely ceases. The bank had not recovered its entire dues and the proceedings before the Debts Recovery Tribunal for recovery of the outstanding dues were still pending - The contention that the bank has become functus officio and is not entitled to file the writ petition is untenable at this stage - Priority of secured creditor over Government dues - Section 26E and Section 35 of the SARFAESI Act, Section 31B of the Recovery of Debts and Bankruptcy Act, Section 142A of the Customs Act and Section 11E of the Central Excise Act - Appellant bank and auction purchaser relied on the priority of secured creditors over Crown dues to seek removal of the Department's encumbrance - Whether Section 26E, Section 35 of the SARFAESI Act and Section 31B of the Recovery of Debts and Bankruptcy Act grant priority to secured creditors over government dues, and whether the statutory first charge under Section 11E of the Central Excise Act, pari materia with Section 142A of the Customs Act, is subject to such priority - HELD - The law is well settled that registered secured creditors have priority over Central, State and local government dues, including taxes and revenues, and the dues of the bank rank ahead of the dues of the Department. However, Section 26E of the SARFAESI Act only states that the secured creditor's debt must be paid in priority after registering the security interest, and Section 31B of the Recovery of Debts and Bankruptcy Act only confers overriding powers to realise secured debts ahead of government dues. Neither provision overrides Rule 9(6) to 9(10) of the Security Interest (Enforcement) Rules, which are mandatory, and no legal authority was produced to show otherwise. These provisions cannot be interpreted in isolation without taking into consideration Rule 9, and have no bearing where the purchaser has not deposited the dues of the known encumbrances as required by Rule 9(7) - Priority of the secured creditor does not entitle the bank or the purchaser to a direction for removal of the known encumbrance without compliance with Rule 9 - Attachment by Department, whether an encumbrance - Section 100 of the Transfer of Property Act, 1882 - Appellant bank and auction purchaser contended that the attachment reflected in the encumbrance certificate is different from the encumbrance referred to in the Security Interest (Enforcement) Rules, while the Department contended there is no difference - Whether attachment effected by the Department over the property is an encumbrance - HELD - An encumbrance places a burden or claim on the property by operation of law or a court order, which prevents the owner from selling, transferring or creating further mortgages or charges, and appears on the encumbrance certificate giving notice to the public and potential buyer that the title is restricted. The attachment reflected in the encumbrance certificate prevents the owner from selling, transferring or creating further mortgages or charges, and by virtue of Section 100 of the Transfer of Property Act the right of alienation is restricted. The attachment satisfies the ingredients required for treating it as an encumbrance - The purchaser, having purchased the property knowing about the encumbrance, cannot escape liability to pay the dues of the Department under Rule 9(7), and the contention that the attachment is not an encumbrance is rejected. [Read less]

2026-VIL-1693-CESTAT-KOL-CU | CESTAT CUSTOMS

Customs – Validity of seizure of gold under Section 110(1) of the Customs Act, 1962 – Reasonable belief – Gold biscuits were seized by the Government Railway Police Service from a person travelling by train on information that he was carrying smuggled gold, and were later handed over to the Customs Officers, who prepared the seizure inventory under Section 110 - Seizure list did not indicate any foreign marking on the gold and the samples were not sent to the Customs Revenue Control Laboratory - Adjudicating authority absolutely confiscated the gold under Sections 111(b) and 111(d) and imposed penalties under Section 112(a) and (b) - Whether the seizure of the gold was based on a "reasonable belief" as required under Section 110(1) - HELD - The gold was seized by the personnel of the Railway Police and later handed over to Customs, and the Customs Officer did not act on his independent belief but merely accepted the seizure done by another agency. The authority effecting the seizure must demonstrate a subjective satisfaction based on objective material, failing which the seizure is invalid. The seizure inventory failed to disclose any material evidence justifying a reasonable belief, there being no foreign marking on the gold, and the marking on one item does not indicate that the gold is of foreign origin. Mere finding of gold does not render it liable for seizure unless there is cogent and positive evidence proving its foreign origin, and mere suspicion is not sufficient. The recovery solely on suspicion and acceptance of the presumption created by the other agency without independent verification or due diligence renders the seizure arbitrary and legally unsustainable - There was no reasonable belief for seizure under Section 110(1) and the gold cannot be held liable for confiscation - The impugned order is set aside and the appeals are allowed - Customs – Burden of proof under Section 123 of the Customs Act, 1962 – Confiscation and penalty – Appellant claimed ownership of the seized gold and produced purchase invoices for gold ornaments bought from a finance company, which were melted into gold pieces, along with bank statement and income tax return, and the invoices were not disputed by the Revenue - Whether the Appellant discharged the burden under Section 123 and whether the gold is liable for confiscation and the Appellants are liable to penalty under Section 112 - HELD - The documents produced by the Appellant, which were not discarded by the Revenue, are admissible as evidence. The Appellant discharged the burden cast on him under Section 123, and the onus then shifted to the Revenue to prove that the gold in question is smuggled, which the Revenue failed to do. As the gold is not liable for confiscation, it is to be released to the Appellant and no penalties are imposable on the Appellants - The impugned order is set aside and the appeals are allowed [Read less]

2026-VIL-1694-CESTAT-BLR-ST | CESTAT SERVICE TAX

Service Tax – Commercial Training or Coaching Services provided to a local corporation – Extended period of limitation and penalty - Appellant provided taxable services classifiable under Commercial Training or Coaching Services and did not discharge service tax on services provided to the corporation, claiming them to be exempted - Commissioner confirmed the demand for the entire period with interest and imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994, a part of the demand having been collected from the clients and paid - Whether the Appellant is liable to pay service tax on the services render... [Read more]

2026-VIL-1699-CESTAT-MUM-CE | CESTAT CENTRAL EXCISE

Central Excise - CENVAT credit of service tax paid on Business Support Services received from group company - Appellant availed CENVAT credit of service tax paid on Business Support Services for common facilities provided by a group company, which apportioned its expenses among group companies and issued invoices with service tax paid by it - Department denied the credit under Rule 14 read with Section 11A and imposed penalty on the ground that no services were received and the Appellant merely bore cost - Whether the Appellant is eligible for CENVAT credit of service tax paid on input services of Business Support Services... [Read more]

2026-VIL-166-GSTAT-GZB | Tribunal SGST

GST - Introduction of grounds under Section 16(2)(b) and 16(2)(c) at the appellate stage to sustain a demand originally founded on Section 16(4) of the CGST Act, 2017 - Appellant availed input tax credit pertaining to an earlier financial year through GSTR-3B returns filed in the subsequent year, and the credit was reflected in GSTR-2A. The SCN under Section 73 and the Order-in-Original disallowed the credit solely as time barred under Section 16(4). The First Appellate Authority upheld the demand and additionally held that credit was availed without receipt of supplies and without payment of tax by suppliers - Whether grounds under Section 16(2)(b) or 16(2)(c), not forming the original foundation of the demand, can subsequently be introduced to sustain it - HELD - The show cause notice did not allege non-receipt of goods or services, non-payment of tax by suppliers or breach of Section 16(2)(b) or 16(2)(c). The Order-in-Original contained no independent finding on these grounds. Section 75(7) provides that no demand shall be confirmed on grounds other than those specified in the notice - Once Section 16(5) removes the foundation under Section 16(4), the demand cannot be sustained by constructing a new case under Section 16(2)(b) or 16(2)(c). Input tax credit is a statutory entitlement subject to the conditions imposed by the legislature. The Revenue cannot rely on this principle to enforce a time limit that has been retrospectively displaced. Section 16(5) does not cure substantive ineligibility. Allegations of fake invoices, non-receipt of supplies, blocked credit or any other substantive defect may be raised, proved and adjudicated in accordance with law - Grounds under Section 16(2)(b) or 16(2)(c), not forming the original foundation of the demand, cannot be introduced subsequently to sustain it – The appeal is allowed - Whether GSTR-3B is a return under Section 39 for the purpose of Section 16(5) - Appellant took input tax credit through GSTR-3B returns for a period within the financial year following the year to which the invoices pertained. The Revenue contended that the credit was not taken in a return under Section 39 as it was claimed through GSTR-3B - Whether GSTR-3B constitutes a return under Section 39 for the purposes of Section 16(5) - HELD - The Supreme Court in Bharti Airtel has held that GSTR-3B, although introduced as a stopgap arrangement, is a return within the meaning of Section 39 read with Rule 61. Since the credit was taken by the Appellant in GSTR-3B returns, it satisfies the expression any return under Section 39 in Section 16(5). The contention of the Revenue is not legally sustainable - GSTR-3B is a return under Section 39 for the purposes of Section 16(5) - Distinction between availment and utilisation of input tax credit under Section 16(5) - Appellant took input tax credit through returns filed within the period permitted by Section 16(5). The dispute required the Tribunal to distinguish availment of credit from its utilisation and from its annual disclosure and reconciliation - Whether there is any legal distinction between availment of input tax credit and its utilisation - HELD - Section 16 is concerned with entitlement to take credit. Once eligible credit is claimed through the prescribed return, it is credited to the Electronic Credit Ledger under Section 49, which is availment. Utilisation occurs later when the ledger is debited towards payment of output tax. Reconciliation is the subsequent reporting of credit in the annual return and reconciliation statement. These are distinct events and are not interchangeable - Section 16(4) regulates the time for taking credit and Section 16(5) retrospectively extends that period for specified financial years. Neither provision requires credit validly taken within the permitted period to be utilised within that same period. Once the disputed credit was taken within the period permitted by Section 16(5), its subsequent utilisation cannot be treated as delayed availment - Section 16(5) imposes no separate expiry date for utilisation of credit validly availed - Effect of non-carry-forward or incorrect disclosure in GSTR-9 and GSTR-9C on input tax credit already taken through a return under Section 39 - The First Appellate Authority held that Section 16(5) did not alter the requirement to disclose the carry-forward of credit in the specified tables of GSTR-9 and GSTR-9C. The Revenue contended that Section 16(5) permits credit to be taken in GSTR-3B but does not validate an incorrect declaration in the annual return or reconciliation statement - Whether non-carry-forward or an incorrect disclosure in GSTR-9 or GSTR-9C can defeat credit already taken through a return under Section 39 - HELD - GSTR-9 is an annual return and GSTR-9C is a reconciliation statement. Neither is the return under Section 39 through which the disputed credit was taken. Section 16(5) does not make entitlement conditional upon correct disclosure in a particular column of GSTR-9 or GSTR-9C. The statutory condition is that the credit must have been taken through a return under Section 39 filed by the specified date - A subsequent error in annual reconciliation cannot convert credit already availed into credit not availed. An annual return or reconciliation statement may disclose a discrepancy and prompt verification. It does not create, extinguish or recharacterise credit already taken through GSTR-3B. A contrary interpretation would indirectly restore the restriction that Parliament removed through Section 16(5) - Incorrect disclosure in GSTR-9 or GSTR-9C cannot defeat credit already taken through a return under Section 39 - Effect of non-applicability of Notification No. 22/2024-Central Tax on the entitlement under Section 16(5) - The Revenue argued that the notification relied upon by the Appellant did not apply. The notification provides a special procedure for rectification of orders where credit was denied under Section 16(4) but later became available under Section 16(5) or Section 16(6), where no appeal has been filed - Whether the alleged non-applicability of Notification No. 22/2024-Central Tax defeats the substantive entitlement created by Section 16(5) - HELD - The submission proceeds on a misconception about the source of the entitlement. The notification does not create entitlement to credit. The entitlement flows directly from Section 16(5), which was introduced retrospectively. The notification provides an additional procedural remedy for a specified category of orders where no appeal has been filed. The Appellant may not be able to use that special rectification procedure as an appeal was already filed. That does not make Section 16(5) inapplicable. The Revenue conflates the procedural remedy with the substantive statutory entitlement. Circular No. 237/31/2024-GST directs authorities to give effect to Sections 16(5) and 16(6) in pending proceedings and appeals - The non-applicability of the special rectification procedure does not defeat the right accrued under Section 16(5) - Protection of input tax credit pertaining to FY 2018-19 taken through GSTR-3B during October 2019 to March 2020 under retrospective Section 16(5) - Appellant took input tax credit pertaining to FY 2018-19 through GSTR-3B returns for the period October 2019 to March 2020. The demand under Section 73 was based solely on the premise that the credit was wrongly availed as it was taken after the time limit in Section 16(4) - Whether the disputed credit is protected by retrospective Section 16(5) - HELD - The credit was taken through GSTR-3B returns filed well before 30.11.2021. The case falls within the language of Section 16(5) - Where the return claiming credit was filed before 30.11.2021, denial under Section 16(4) cannot survive after the insertion of Section 16(5). The demand under Section 73 was founded on the premise that the credit was taken after the time limit in Section 16(4). Section 16(5) permits credit pertai [Read less]

2026-VIL-159-GSTAT-VRN | Tribunal SGST

GST - Penalty under Section 129 for transporting goods contrary to description in invoice and e-way bill - Intention to evade tax - Vehicle was intercepted and goods of higher quantity and value, kept in bags and covered with loose goods of lesser quantity and value, were found contrary to the description mentioned in the invoice and e-way bill, and the goods and vehicle were taken into custody - Appellant contended that the goods were loaded by labourers due to bonafide mistake and relied on High Court decisions holding that penalty cannot be imposed for classification disputes or minor typographical errors, while the Revenue contended that the Appellant was a habitual evader since a connected appeal showed documents generated after interception - Whether the Appellant transported the goods placed in bags and covered with loose goods, contrary to the description in the invoice and e-way bill, with intention to evade tax - HELD - The decisions relied upon by the Appellant have no application, as the question of classification of goods or typographical error is not involved. The goods of much higher quantity and value had been concealed in the vehicle by covering them with goods of lesser quantity and value, both were separately identifiable, and no question of classification was involved. In the garb of invoice and e-way bill prepared for only the lesser valued goods, the Appellant tried to transport goods of much higher value, which clearly establishes intention to evade tax, as held in the High Court decisions where misdescription in transport papers permitted an entirely different and higher value commodity and in the decision where mixed scrap was transported without valid documents. Civil matters are decided on preponderance of probabilities, and repetition of such conduct as in the connected appeal enhances the degree of probability of dishonest and fraudulent intention. The version of confusion in the mind of labourers appears illusory - The appellant is liable to pay tax and penalty - The appeal is dismissed - Generation of fresh invoice and e-way bill after interception of vehicle - Whether preparation of fresh invoice and generation of e-way bill after interception of the vehicle converted the illegality caused by the Appellant into legality - Appellant submitted a fresh tax invoice and e-way bill after the interception and expressed willingness to deposit the tax and penalty, and the adjudicating authority imposed tax and penalty, which was upheld by the first appellate authority - HELD - Under the GST law, an illegal act cannot be validated at a subsequent stage. Generating documents after interception or detention is a post detection remedy that cannot cure earlier non-compliance, and in absence of statutory provision the subsequent preparation of documents to convert illegality into legality is impermissible. Goods must be supplied only with valid invoice and e-way bill, and where goods are not accompanied by proper documents a presumption of intention to evade tax may be raised, which the Appellant failed to rebut - The impugned orders are lawful and justified, the statute does not permit such rectification, and the appeal is dismissed. [Read less]

2026-VIL-155-GSTAT-VRN | Tribunal SGST

GST – Dismissal of appeal by State before Appellate Tribunal for non-removal of registry defects – Respondent-assessee succeeded before the First Appellate Authority, which set aside the order of the Adjudicating Authority, observing that minor discrepancies did not give reason to believe there was any intention to evade tax – Appellant-State filed the appeal before the Tribunal but did not remove the defects raised by the registry in spite of many opportunities, and the amount of tax and penalty in dispute was shown as below a stated figure - Whether the appeal filed by the Appellant State is liable to be dismissed ... [Read more]

2026-VIL-158-GSTAT-VRN | Tribunal SGST

GST - Penalty under Section 129(3) of the CGST Act, 2017 for transporting goods without tax invoice and e-way bill - Generation of documents after interception - Vehicle loaded with taxable goods was intercepted in transit and the driver had no bill, bilty or e-way bill, an order of detention under Section 129(1) was issued, and the Appellant's authorised person produced a tax invoice and e-way bill generated several hours after the interception, whereafter the penalty was paid for release of the goods - Appellant contended that the lapse was procedural, that the invoice and e-way bill pertained to the same date and were produced before the penalty order, that the goods matched the invoice - Revenue contended that the documents were generated after interception, that the Appellant's statements were contradictory, and that the Appellant had repeated the wrong - Whether preparation or generation of invoice and e-way bill after the interception of the vehicle validated the illegal act of the Appellant - HELD - Rule 138 of the CGST Rules, 2017 requires information to be furnished before commencement of movement of goods, and the word "and" in Rule 138A(1) makes both the carrying of the invoice and the e-way bill mandatory, which is strengthened by Rule 138B, so that an e-way bill and tax invoice are mandatory to be carried along with the consignment - Section 129 starts with a non-obstante clause and gets triggered at the very moment the conveyance leaves with the consignment in contravention of the Act and Rules. The e-way bill mechanism was introduced to track movement of goods and check tax evasion, and compliance is to be done before the goods are moved and not after interception. Where goods are not accompanied by the invoice and e-way bill, a presumption of intention to evade tax may be raised, which is rebuttable by a proper and reasonable explanation, and mere furnishing of documents subsequent to the interception is not a valid ground to show absence of such intention - The decisions relied upon by the Appellant were distinguished on facts, as the Appellant had again supplied goods and generated fresh documents after interception, and the explanation of a family function appeared to be a novel story set up to justify the illegal act - The Appellant failed to rebut the presumption, the penalty is sustained, and the appeal is dismissed [Read less]

2026-VIL-160-GSTAT-LCK | Tribunal SGST

GST - Penalty under Section 129 of the CGST Act, 2017 for expiry of validity of e-way bill - Appellant explained that the goods were transported over a long distance, that the e-way bill could not be extended due to inadvertence, non-availability of regular staff during the festive period and office closure - Whether the mere expiry of the validity of an e-way bill, without any independent evidence establishing an intention to evade tax, is sufficient to justify the imposition of penalty under Section 129, when the goods were accompanied by relevant transportation documents - HELD - Mere expiry of the e-way bill, by itself... [Read more]

2026-VIL-156-GSTAT-KLK | Tribunal SGST

GST – Invocation of Section 74(1) of the CGST Act, 2017 for delayed payment of tax, belated filing of return in Form GSTR-3B and short payment of interest – Show cause notice to the Respondent-assessee demanding tax paid beyond the due date along with interest and penalty under Section 74, although the Respondent had deposited the self assessed tax and interest and uploaded the return before the proceedings were drawn up. The short paid interest was also paid through Form DRC-03 before the notice - Adjudicating authority confirmed the demand and imposed penalty, but the first appellate authority set aside the order, ho... [Read more]

2026-VIL-1157-GUJ-CE | High Court CENTRAL EXCISE

Central Excise - CENVAT credit of service tax distributed by Input Service Distributors for services used at offshore fields - Respondent manufactured excisable products at its processing plant from raw sour gas and condensate received from offshore gas fields through subsea pipelines. The plant manufactured both dutiable and exempted goods. The ISD distributed credit of service tax paid on services used at the offshore fields, where natural gas was produced as an exempted product - Revenue sought to deny the credit on the ground that the services were used exclusively at the offshore fields producing exempted goods - Tribunal allowed the Respondent's appeal by following the decision of the Bombay High Court in the Respondent's own case relating to another plant - Whether the Respondent was eligible to take credit of service tax distributed by the Input Service Distributors on services used exclusively at the offshore fields - HELD - The decision of this Court under the sales tax law concerned the situs of sale under a Production Sharing Contract and had nothing to do with the issue of distribution of input service credit by the Input Service Distributor under the Rules. The word ‘sale’ does not appear anywhere in Rule 7 of the CENVAT Credit Rules, 2004. The Rule is premised on the use of services in or in relation to the manufacture of final products where invoices are received at a place different from the manufacturing facility - Under Rule 7, credit attributable to service used in a unit exclusively engaged in manufacture of exempted goods shall not be distributed. Here the credit was distributed to the plant which manufactures dutiable goods. In the Bombay High Court decision, it was held that the definition of input service is cast in broad terms and covers services used directly or indirectly in or in relation to the manufacture of final products. The dutiable final products are fundamentally premised upon the process which commences at the offshore location - The manufacturer of both dutiable and exempted goods would be required to comply with Rule 6 and is entitled to credit only on that quantity of input service which is used in the manufacture of dutiable goods. The ratio of that decision squarely applies since the only difference is that sour gas, instead of crude oil, was supplied from the offshore field to the plant. Except for that fact, all other aspects are identical. The Tribunal committed no error in applying that decision - The appeals are dismissed [Read less]

2026-VIL-1156-GUJ-CE | High Court CENTRAL EXCISE

Central Excise - Refund of CENVAT credit reversed on inputs contained in expired medicines destroyed as unfit for human consumption - Non-compliance with procedure for remission of duty - Appellant reversed the CENVAT credit on the inputs contained in medicines destroyed as unfit for human consumption. It then filed a refund claim on the ground that the reversal was erroneous, since the goods destroyed were waste pharmaceuticals and no remission was required – Rejection of refund claim on the ground that the Appellant did not follow the procedure in Chapter 18 of the Central Excise Manual - Whether the refund claim of the reversed CENVAT credit is maintainable when the expired medicines were destroyed without following the procedure under Rule 21 read with Chapter 18 - HELD - The issue is covered in favour of the Revenue by the decision of this Court in Sun Pharmaceutical Industries Ltd. The procedure under Chapter 18 is not a procedural condition of a technical nature. It is a substantive condition for claiming remission of duty and destruction of goods. Its non-observance is not condonable and is likely to facilitate the commission of fraud and administrative inconvenience - It is an admitted position that the Appellant destroyed expired medicines unfit for consumption by human beings. The Appellant was required to apply for remission permission from the jurisdictional Central Excise authorities and thereafter remit the duty payable. Rule 21 was therefore contravened. The Notification relied upon by the Appellant, which relates to waste pharmaceuticals, does not apply since the goods destroyed were expired medicines. Under Rule 3(5C) of the CENVAT Credit Rules, 2004, where payment of duty is ordered to be remitted under Rule 21, the CENVAT credit taken on the inputs shall be reversed - As the Appellant did not follow the procedure under Chapter 18, the CENVAT credit was rightly reversed and the refund claim was rightly rejected - The appeals are dismissed [Read less]

2026-VIL-1136-DEL | High Court SGST

GST - Constitutional validity of Section 16(2)(c) of the CGST Act - Petitioner challenge to order under Section 74 confirming demand of input tax credit with interest and equivalent penalty, and sought that Section 16(2)(c) be struck down or read down so as to exclude bona fide recipients who have undertaken genuine transactions with duly registered suppliers, where the supplier has failed to discharge its tax liability - HELD - The issue no longer survives in view of the judgment of the Division Bench of the Gujarat High Court in Maruti Enterprises case, which was considered by the Supreme Court and not interfered with. The Supreme Court examined the distinction between the scheme under the Delhi VAT Act and the CGST Act, noticing that there is no parity between a purchasing dealer under the CGST Act and a purported bona fide purchasing dealer under the Delhi VAT Act where the supplier fails to pay the requisite tax, and took note of Section 41 and Sections 73 and 74 of the CGST Act concerning re-availment of reversed ITC upon discharge of tax liability by the supplier. The Supreme Court held that no grounds were made out for declaring Section 16(2)(c) unconstitutional or for reading it down - The challenge to the constitutional validity of Section 16(2)(c) cannot be accepted and the reliefs seeking striking down or reading down of the provision are declined - GST - Validity of adjudication order under Section 74 of the CGST Act confirming ITC demand on retrospective cancellation of supplier registrations - Whether the order passed under Section 74 discloses the necessary factual and statutory foundation for fastening tax, interest and penalty liability on the Petitioner - HELD - Where an authority invokes Section 74, the adjudication order must disclose the factual basis on which the statutory ingredients of fraud, wilful misstatement or suppression of facts to evade tax are said to be satisfied, and mere reproduction of the statutory language without particulars does not demonstrate the application of mind necessary to sustain the order - The audit objection made only a general assertion. The order did not disclose the names or GSTINs of the suppliers, the supplier-wise invoice dates, the dates from which registrations were cancelled. These omissions are not a mere technical defect, as they are the factual foundation of the demand and their absence deprives the Petitioner of an effective opportunity to meet the case - The order also records no specific finding on how the Petitioner committed fraud, made wilful misstatement or suppressed any material fact, and does not show that the Petitioner's defence was considered - The conclusion on the Constitutional challenge to Section 16(2)(c) does not dispense with the requirement that the adjudicating authority invoking Section 74 must satisfy itself that the statutory conditions are met in the facts of the particular case. The deficiencies go to the root of the adjudication - The O-in-O and consequential proceedings are set aside and the matter is remanded for fresh adjudication after opportunity of hearing, with specific findings identifying the suppliers and transactions and an independent examination of the requirements of Section 74 - The Petition is disposed of [Read less]

2026-VIL-1701-CESTAT-BLR-CE | CESTAT CENTRAL EXCISE

Central Excise - Rule 6(6)(vii) of the CENVAT Credit Rules, 2004 - Clearances to expansion of power project - Partial exemption from customs duty - Appellant cleared goods without payment of duty for expansion of a mega power project supplied under international competitive bidding - Department denied the benefit of Rule 6(6)(vii) and demanded an amount under Rule 6 on the ground that goods required for such expansion attract basic customs duty at a concessional rate on import, and are therefore not exempt from duties of customs - Whether the goods supplied towards expansion of an existing power project are covered under R... [Read more]

2026-VIL-1700-CESTAT-KOL-ST | CESTAT SERVICE TAX

Service Tax - Grants-in-aid received from Central and State Governments - Whether consideration for taxable service - Appellant, a body representing trade and commerce, received grants-in-aid from Governments, and the department demanded service tax under Business Exhibition Service on the grants, contending that the Appellant is not a charitable organisation - Whether service tax is leviable on grants-in-aid received from Governments - HELD - Only consideration can be made liable to service tax, and for a taxable service there must be a service provider, a service receiver and consideration. The grant was conditional, the agreements required utilisation certificates and made the Appellant responsible for proper spending and certification, whereas in a normal client and service provider relationship no account is given for the amount received, so the grant is more in the nature of reimbursement than consideration - The Revenue brought no evidence that the Appellant provided Business Exhibition Service or raised any invoice and received consideration, and the agreements did not specify any such work. Following the Supreme Court, service tax is to be paid only on services actually provided and valuation cannot exceed consideration paid as quid pro quo for such service. The Tribunal decisions holding that there is no service provider-client relationship in case of grants-in-aid are squarely applicable - The confirmed demand on the grants is set aside on merits – The appeal is allowed - Extended period of limitation on non-payment of service tax on grants-in-aid - Appellant, a registered service tax payer, accounted for the grants and the expenditure in its books of account and audited accounts, on the basis of which the demand was quantified, and the extended period was invoked - Whether the extended period of limitation can be invoked - HELD - The Appellant had been paying service tax on various services, had accounted for receipt of the grants and the expenditure in its books, and the Revenue failed to consider the expenditure incurred, so the Appellant cannot be said to have indulged in suppression with intent to evade service tax. Since the very nature of the grant is that of reimbursement, the Appellant could have entertained a bona fide belief that no service tax is payable, which is fortified by the case laws cited, and no case is made out to fasten liability for the extended period - The demand is also set aside on account of time bar - Demand under reverse charge mechanism where tax was paid under other headings - Revenue neutrality and extended period - Revenue alleged non-payment of service tax on reverse charge basis, whereas the Appellant contended that the tax had been paid under different headings due to mismatch between services while filing returns and that excess tax was paid overall, as shown in reconciliation statements - Whether the demand under reverse charge mechanism and the extended period can be sustained - HELD - Although it is not possible for the Tribunal to verify the figures individually, service tax payable on reverse charge basis would be available to the Appellant as CENVAT credit, resulting in a revenue neutral situation, and all the entries are properly recorded in the books of account, so no case of suppression can be alleged. Where credit is available making the situation revenue neutral the extended period cannot be invoked - The confirmed demand under reverse charge is set aside on account of time bar and the appeal is allowed. [Read less]

2026-VIL-1702-CESTAT-ALH-CU | CESTAT CUSTOMS

Customs - Enhancement of declared value on written acceptance by importer - Right to appeal and requirement of speaking order under Section 17(5) of the Customs Act, 1962 – Appellant accepted in writing the enhancement of value proposed by the department after its requests for clearance on provisional basis were not acted upon and it was asked to submit letters of consent, and the Commissioner (Appeals) rejected the appeals holding that acceptance in writing dispensed with a speaking order and bound the Appellant - Whether written acceptance of the enhanced value precludes the importer from challenging the enhancement in appeal - HELD - Following the Delhi High Court, Section 17(5) speaks of the concession only with reference to reassessment under Section 17(4) and relieves the proper officer of the obligation to pass a speaking order, so the waiver is at best confined to the speaking order. Rule 12(2) of the Customs Valuation Rules, 2007 contemplates no waiver, and the concession made in respect of the opinion of the proper officer cannot detract from or deprive the importer of the right to question the decision in accordance with law, as the right to question the correctness of the decision, whether on formation of opinion or on merits, is protected by statute and is not abandoned - The letters of acceptance also did not mention the details of the alleged contemporaneous import data and cannot be taken on their face value - The acceptance letters do not preclude the Appellant from challenging the enhancement - The Orders-in-Appeal are set aside and the appeals are allowed - Rejection of declared transaction value - Rule 12 of the Customs Valuation Rules, 2007 and reliance on import data - Department rejected the declared value on comparison with contemporaneous import data, without intimating in writing the grounds for doubting its truth or accuracy, and re-determined the value - Whether the declared transaction value can be rejected and enhanced without following Section 14 of the Customs Act read with Rule 12 of the Valuation Rules - HELD - The Supreme Court in Century Metal Recycling case has held that the mandate of Rule 12(2) to intimate the importer in writing the grounds for doubting the truth or accuracy of the declared value cannot be ignored or waived - The formation of opinion regarding reasonable doubt and communication of the grounds to the importer is mandatory, any subterfuge to bypass the statutory mandate being unacceptable – Further, the Delhi High Court has held that a valuation addition based solely on import data is unwarranted and any reassessment must be shored up by independent and cogent evidence, as mere reliance on external data without corroborative evidence or clear justification fails the tests under the Valuation Rules, and a deviation from declared values must be founded on tangible and justiciable material - The Commissioner (Appeals) failed to take into account the ratio of the Supreme Court's judgment in entirety - The impugned orders are set aside and the appeals are allowed. [Read less]

2026-VIL-1143-CAL | High Court SGST

GST - Insolvency and Bankruptcy Code, 2016 - Extinguishment of GST dues not claimed in the Corporate Insolvency Resolution process upon approval of the resolution plan - Petitioner was admitted into the corporate insolvency resolution process, the resolution plan was approved by the Adjudicating Authority and attained finality - More than two years after the Effective Date the Respondent issued notice and confirmed demand of IGST ITC with interest and penalty for a period prior to the Effective Date on the footing that the cause of action arose after the moratorium - Whether the dues pertaining to a period prior to the Effective Date, for which no claim was lodged, stood extinguished on approval of the resolution plan - HELD - Section 31(1) of the Code, as amended, makes the approved resolution plan binding on the Central Government, any State Government or any local authority to whom statutory dues are owed, and the CGST authorities are included. Once a plan is approved, claims not forming part of it stand extinguished and no proceeding in respect of them can be initiated or continued - A successful resolution applicant cannot be faced with undecided claims. The tax period fell wholly before the Effective Date and no claim was lodged, so the demand stood extinguished and both the show cause notice, being the very initiation of a proceeding under Section 73, and the Order-in-Original, being its culmination, are proceedings in respect of an extinguished claim - The finding that the cause of action arose after the moratorium does not help, as the portion arising during the process was equally required to be brought to the notice of the Resolution Professional. The plan itself, by its clause on treatment of Government authorities, extinguishes all pre-Effective Date claims, whether assessed or unassessed, known or unknown - Further, the Board's own circular and instruction record that claims not submitted or submitted belatedly stand extinguished upon approval of the plan - The dues for the financial year, with interest and penalty, stood extinguished on approval of the plan - The show cause notice, the Order-in-Original, the summary in Form GST DRC-07, all proceedings thereunder and the notice demanding interest for delayed filing of returns are quashed and set aside - The writ petition is maintainable and is allowed [Read less]

2026-VIL-1132-BOM-CU | High Court CUSTOMS

Customs - Applicability of domestic regulatory regime to goods sold in Duty Free Shop - Petitioners operated Duty Free Shops in the Departure Terminal of an International Airport and sold imported nicotine pouches stored in a special warehouse under Section 58-A of the Customs Act, 1962, without any import licence or Registration Certificate under the Drugs and Cosmetics Act, 1940, contending that the product was meant only for outbound travellers and was a case of re-export - Authorities banned the sale on the ground that the product was a drug requiring licence - Whether all transactions conducted within a Duty Free Shop, beyond the customs barrier, enjoy absolute immunity from the domestic regulatory regime or whether such immunity is restricted solely to fiscal levies such as customs duty and indirect tax - HELD - The decisions relied upon by the Petitioners exclusively deal with the taxable events for assessing customs duty and sales tax/VAT and do not extend any blanket immunity to Duty Free Shop operators from the domestic regulatory or public health laws. Under Section 2(23), 2(25) and 2(27) of the Customs Act, goods are imported once they enter the territorial waters of India, even if not cleared for home consumption. By reason of the words "any other law for the time being in force" in Section 2(33), goods restricted or prohibited under any other law become prohibited goods, and the prohibition under Section 10 of the Drugs and Cosmetics Act applies to them - The coordinate Bench decision in Glamstone Cosmetics holding that import for the limited purpose of warehousing or re-export enjoys no immunity is a binding precedent. Import of goods into India, even for the limited purpose of warehousing or re-export, does not enjoy any immunity from domestic laws, and the exemption, if any, is limited to fiscal measures such as customs duty, tax and VAT - The first question is answered against the Petitioners and in favour of the Respondents - Drugs and Cosmetics Act, 1940 - Whether nicotine pouch is a "drug" under Section 3(b) - Ban on sale of nicotine pouches in Duty Free Shops by the Assistant Drug Controller on the ground that the product is a drug requiring import licence and Registration Certificate - Petitioners had not furnished product specification and the impugned communication did not indicate under which clause of Section 3(b) the product fell - Whether nicotine pouch falls within the definition of "drug" under Section 3(b), making import licence and registration mandatory even for dealing within the customs barrier of the International Departure Terminal - HELD - Section 3(b) contemplates four categories. Under clause (i) the substance must have intended use in diagnosis, treatment, mitigation or prevention of disease or disorder, and under clauses (ii) and (iv) the substance or device must be specified in a Central Government Notification, which is admittedly not available for nicotine pouch. Clause (iii) requires intended use as a component of a drug. A nicotine pouch marketed purely as a recreational product without therapeutic or cessation claims may not automatically be a drug merely because nicotine has physiological effects - The Drug Controller has jurisdiction to ban sale without licence only if the product is a drug, and the jurisdictional facts must be clearly established before invoking powers under the Act, which were completely missing in the impugned communication. Whether the product is a drug, or is covered by Schedule D or Schedule K exemptions, requires factual inquiry into composition and intended use, which cannot be adjudicated in a writ petition under Article 226, and the question is kept open. Since the Petitioners had not provided product specification, the impugned communication cannot be faulted for want of reasons - The Petitioners are at liberty to file representations with supporting material, to be disposed of by a reasoned order after personal hearing [Read less]

2026-VIL-163-GSTAT-TVP | Tribunal SGST

GST - Eligibility of works contract services supplied to a statutory water authority for concessional rate of tax meant for local authority - Appellant provided works contract services to the Kerala Water Authority and paid tax at the concessional rate - Short payment of tax on invoices for which the rate of tax had changed with effect from 01.01.2022 through an amendment to Notification No. 11/2017-CT(Rate) as amended w.e.f. 1.1.2022 - Whether the Kerala Water Authority is a local authority under Section 2(69) of the CGST Act, 2017 and whether the Appellant is eligible for the concessional rate or liable at the higher rate on the invoices in question - HELD - The definition of local authority in Section 2(69) is specific and means only those bodies mentioned in the clauses of that definition. It does not include other bodies merely described as local bodies by virtue of a local law. Developmental authorities formed under town planning laws do not qualify as local authorities for GST. A statutory body, corporation or authority created by Parliament or a State Legislature is neither Government nor local authority, as it is a juridical entity separate from the State - The Kerala Water Authority was established under the State water supply and sewerage law as a body corporate, and the Kerala Water Supply and Sewerage Act, 1986 deems it a local authority for all purposes. That deeming provision does not make Kerala Water Authority a local authority under the CGST Act. The authority does not fall under any of the sub-clauses (a) to (g) of Section 2(69). The registration of the authority by the Department in the category of local authority does not alter this position. The CBIC Circular No. 245/02/2025-GST clarifies that statutory authorities such as development authorities are not local authorities under Section 2(69) - The works contract services supplied to the authority are not eligible for the concessional rate and are liable to tax at the 18% with effect from 01.01.2022 – Ordered accordingly - Liability to pay interest under Section 50(1) on differential tax paid partly through Electronic Credit Ledger - Appellant had paid the differential tax through the electronic credit ledger as to a part and through the electronic cash ledger as to the balance. The demand included interest on the entire differential tax - Whether interest is payable on the differential tax paid through the electronic credit ledger - HELD - Where differential tax is payable, interest for delayed payment follows automatically under Section 50(1), from the time of supply till the date of payment. The proviso to Section 50(1) restricts interest to that portion of tax which is paid by debiting the electronic cash ledger. Interest is therefore not payable to the extent of tax paid through the electronic credit ledger. Interest is payable only to the extent of tax paid through the electronic cash ledger - The interest is payable only on that portion of tax paid through the electronic cash ledger. The demand of interest accrued on the tax amount paid through the electronic credit ledger is set aside. [Read less]

2026-VIL-157-GSTAT-GZB | Tribunal SGST

GST - Monetary threshold limit for filing appeal before the GSTAT - Whether departmental appeal for penalty amount below the prescribed monetary limit of Rs. 20 lakh can be admitted without establishing an applicable exception - HELD - A departmental appeal is governed by the monetary-limit framework prescribed for Departmental litigation. The right of appeal is a creature of statute and its exercise remains subject to the statutory and regulatory framework governing departmental litigation. The existence of an exception cannot be presumed merely because the Department desires to pursue the appeal - An exception is an exce... [Read more]

2026-VIL-1145-KAR | High Court SGST

GST - Limitation for Revenue's appeal against refund sanction orders under Section 107(2) of CGST Act, 2017 - Respondent was sanctioned refund of unutilised input tax credit on capital goods - Commissioner reviewed the sanction orders and directed filing of appeals before the Commissioner (Appeals), which allowed them, quashed the refund orders and directed recovery with interest – In the impugned order the Single Judge held the appeals were barred by limitation - Whether the appeals preferred by the Revenue before the Commissioner (Appeals) were barred by limitation under Section 107 of CGST Act and were rightly set aside - HELD - Section 107(2) circumscribes any direction to file an appeal with the requirement that it be filed within six months from the date of communication of the order and as per Section 107(4) the Appellate Authority can condone delay only for a further period of one month - The review orders were passed beyond one year from the dates of the sanction orders, so none could direct filing of appeals within six months. The date of audit or audit observations is not relevant, as limitation runs from the date of communication of the order - Following the Delhi High Court decision in Grapes Digital case, the expression 'communication of the decision or order' in the context of intra-departmental communication must be construed as the date of issue of the order. As per the CBIC Instruction, post-audit and review must be completed within three months from the issue of the refund order and review must be completed at least thirty days before the expiry of the appeal period - All refund orders are transmitted online to the review module, and under Section 169(1)(d) communication is by making the order available on the common portal, so the time for communication cannot be indeterminate or open-ended - The power to recover erroneously granted refund under Section 73 is not relevant for determining limitation, and the assumption that limitation under Section 107 stands extended by Sections 73 and 74 is ex facie erroneous - The Commissioner (Appeals) had no jurisdiction to condone delay beyond one month, and the delay far exceeded that period - The appeals were filed beyond the period of limitation. The Single Judge rightly set aside the appellate order - The appeal of the Revenue is dismissed [Read less]

2026-VIL-1140-ALH | High Court VAT

Entry Tax - Levy of Entry Tax on 'Commingled Crude Oil' - Crude oil defined under Section 14 of the Central Sales Tax Act, 1956 – Revisionist-assessee brought commingled crude oil into the local area and did not admit entry tax liability, contending that the goods are different from crude oil as defined in Section 14 of the CST Act while the State contended that the goods are crude oil - Whether commingled crude oil is covered under the category of crude oil as defined under Section 14 of the Central Sales Tax Act so as to attract Entry Tax - HELD - The revisionist has imported certain item in the nomenclature of ‘comm... [Read more]

2026-VIL-1133-KAR-ST | High Court SERVICE TAX

Service Tax - Levy on sale of goods component of works contract - Petitioners were engaged in execution of a works contract for lift irrigation works on turnkey basis and in supply and installation of pump sets to Government organisations, and the Department issued show cause notices based solely on income tax Form 26AS demanding service tax on the amounts reflected therein - Petitioners contended that sale of goods was taxed under the service tax law, that VAT/sales tax was paid on the sale value and service tax on the service value - Whether service tax can be levied on sale of goods component as indicated in the impugned orders - HELD - Section 65B(44) excludes from "service" the activity of sale of goods and transactions referred to in Article 366(29A) of the Constitution. Further, under Section 66E(h) only the service portion in the execution of a works contract is a declared service. Rule 2A(i) of the Valuation Rules specifically provides for exclusion of the value of goods transferred, to ensure that the value of goods, which is in the exclusive domain of the State, is not taxed. The scope of works in the works contract fell outside the purview of service tax, and where service was involved, the records, invoices, returns and reconciliation between ST-3 returns, VAT returns and Form 26AS showed payment of service tax, which the authorities had ignored even after remand - Point answered in favour of the Petitioners - Service Tax - Exemption Notification No. 25/2012-ST - Entitlement of works contract for lift irrigation project awarded by a Government company - Petitioner executed works of survey, design and construction of lift irrigation project for a Government company and claimed exemption for services by way of construction of canal, dam or other irrigation works provided to a Government, local authority or governmental authority - Respondent contended that the Government company was not a municipality and that exemption had to be read strictly - Whether the Petitioner is entitled to exemption from service tax - HELD - The definition of governmental authority covers a body established by Government with 90% or more participation or control to carry out any function entrusted to a municipality under Article 243W of the Constitution, and the Notification does not require the body to be a municipality as strictly defined. A lift irrigation project is meant to foster economic and social development of the area and falls within planning for economic development and social justice under Article 243W read with the Twelfth Schedule. An exemption notification, though construed strictly when determining whether the subject falls in it, calls for a wider and liberal construction once the subject falls within the notification, and a liberal interpretation includes lift irrigation as the project fulfils the objective of economic and social development - Point answered in favour of the Petitioner - Service Tax - Extended period of limitation under proviso to Section 73 of the Finance Act, 1994 - Show cause notices were issued for the financial years 2015-16 and 2016-17 invoking the extended period on the allegation of suppression of value of taxable services, based only on Form 26AS - Petitioners denied suppression and contended that claim of exemption was interpretational and that the remand proceedings left only the question of inclusion of value of goods - Whether the demands are barred by limitation under Section 73 of the Finance Act, 1994 - HELD - Suppression must be wilful and postulates a positive act with intent to evade payment of tax, and mere failure to pay or mere omission to give correct information is not suppression where facts are known to both parties, the burden being on the Revenue to prove suppression. Laying claim to an exemption is purely interpretational in nature and cannot be a matter of suppression of facts, fraud, collusion or wilful misstatement with intention to evade payment of tax. The proviso to Section 73 could not have been invoked, and the notice issued beyond thirty months from the date of the relevant returns was barred by time. In the other petition, since the notice was based only on Form 26AS and, after remand, the only question remaining was inclusion of the value of goods on which VAT was paid, which was already answered, the ingredients of suppression did not arise and the extended period could not have been invoked - Point answered in favour of the Petitioners; both writ petitions are allowed, the impugned Orders-in-Original are set aside and the impugned show cause notice is quashed. [Read less]

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