| S.No | Name | Date of Order | Subject | Actions |
|---|---|---|---|---|
| 161 | R.T. Infotech v. Additional Commissioner Grade 2 & 2 Others | 30-05-2025 | Denial of ITC under Section 16(2)(c) where GST was paid to the supplier through banking channels but not deposited by the supplier. | View Download |
BackgroundThe petitioner had purchased recharge coupons against seven tax invoices on which CGST and SGST were charged. The tax component shown in the invoices was paid through the banking channel by RTGS. During scrutiny, a discrepancy was noticed between the ITC claimed and the credit appearing in GSTR-2A. The petitioner explained that the disputed ITC related to the said invoices and that the payments had been made through RTGS.A show-cause notice under Section 73 was thereafter issued alleging wrongful availment of ITC under Section 16(2)(c) on the ground that the tax had not been deposited with the Government. The petitioner contended that proceedings should instead be initiated against the selling dealer, as the purchaser had no control over the seller’s filing of returns or deposit of tax. An order was passed requiring reversal/deposit of the ITC amount, along with penalty and interest, and the appeal against the order was dismissed.Court ObservationThe Court found that the purchase through the seven bills and charging of CGST and SGST were not in dispute, and the GST charged under the invoices had been paid through the banking channel by RTGS. The record also showed that proceedings had been initiated against the selling dealer for non-discharge of its duties.The Court observed that the purchasing dealer cannot compel the selling dealer either to deposit the tax collected with the Government treasury or to file the return within the stipulated time. Therefore, a purchasing dealer who has diligently discharged its own obligations cannot be left at the mercy of the selling dealer. The assessing authority ought to have considered the fact that the purchases were supported by tax invoices, payments were made through banking channels, and action had already been taken against the selling dealer.The Court relied upon the Supreme Court’s decision in Suncraft Energy and the Madras High Court’s decision in D.Y. Beathel Enterprises, both of which were considered in the context of action against the supplier where tax had been paid by the purchaser but the supplier failed to discharge its obligations.Final VerdictThe Court held that the matter required reconsideration and consequently found that the impugned orders could not be sustained in law. The orders were therefore quashed.The writ petition was allowed and the matter was remanded to the concerned respondent for fresh adjudication by passing a reasoned and speaking order, after hearing all stakeholders, within two months from the date of production of the certified copy of the order.Cases Referred by CourtAssistant Commissioner of State Tax v. Suncraft Energy Pvt. Ltd. — Supreme Court — 2023.D.Y. Beathel Enterprises v. State Tax Officer (Data Cell), Tirunelveli — Madras High Court — 2022. | ||||
| R.T. Infotech v. Additional Commissioner Grade 2 & 2 Others 30-05-2025 Denial of ITC under Section 16(2)(c) where GST was paid to the supplier through banking channels but not deposited by the supplier.BackgroundThe petitioner had purchased recharge coupons against seven tax invoices on which CGST and SGST were charged. The tax component shown in the invoices was paid through the banking channel by RTGS. During scrutiny, a discrepancy was noticed between the ITC claimed and the credit appearing in GSTR-2A. The petitioner explained that the disputed ITC related to the said invoices and that the payments had been made through RTGS.A show-cause notice under Section 73 was thereafter issued alleging wrongful availment of ITC under Section 16(2)(c) on the ground that the tax had not been deposited with the Government. The petitioner contended that proceedings should instead be initiated against the selling dealer, as the purchaser had no control over the seller’s filing of returns or deposit of tax. An order was passed requiring reversal/deposit of the ITC amount, along with penalty and interest, and the appeal against the order was dismissed.Court ObservationThe Court found that the purchase through the seven bills and charging of CGST and SGST were not in dispute, and the GST charged under the invoices had been paid through the banking channel by RTGS. The record also showed that proceedings had been initiated against the selling dealer for non-discharge of its duties.The Court observed that the purchasing dealer cannot compel the selling dealer either to deposit the tax collected with the Government treasury or to file the return within the stipulated time. Therefore, a purchasing dealer who has diligently discharged its own obligations cannot be left at the mercy of the selling dealer. The assessing authority ought to have considered the fact that the purchases were supported by tax invoices, payments were made through banking channels, and action had already been taken against the selling dealer.The Court relied upon the Supreme Court’s decision in Suncraft Energy and the Madras High Court’s decision in D.Y. Beathel Enterprises, both of which were considered in the context of action against the supplier where tax had been paid by the purchaser but the supplier failed to discharge its obligations.Final VerdictThe Court held that the matter required reconsideration and consequently found that the impugned orders could not be sustained in law. The orders were therefore quashed.The writ petition was allowed and the matter was remanded to the concerned respondent for fresh adjudication by passing a reasoned and speaking order, after hearing all stakeholders, within two months from the date of production of the certified copy of the order.Cases Referred by CourtAssistant Commissioner of State Tax v. Suncraft Energy Pvt. Ltd. — Supreme Court — 2023.D.Y. Beathel Enterprises v. State Tax Officer (Data Cell), Tirunelveli — Madras High Court — 2022. | ||||
| 162 | Cargotec India Pvt. Ltd. vs. Commissioner of GST & Central Excise | 19-05-2025 | Whether refund of unutilized CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004 on export of IT Software Services can be denied on the grounds of (i) services rendered from unregistered premises, and (ii) absence of nexus between input services a | View Download |
BACKGROUND The appellant, a 100% Export Oriented Unit operating under the Software Technology Parks Scheme, was registered for providing Information Technology Software Services under the Finance Act, 1994. The appellant filed refund claims of unutilized CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004 in respect of export of services for two quarters — April to June 2011 and July to September 2011. During April 2011, the appellant had shifted its premises from Adyar to Taramani, and the service tax registration for the new premises was amended only on 05.01.2012. The Original Authority sanctioned only a small portion of the refund and rejected the balance on two grounds — first, that the services were rendered from unregistered premises, and second, that there was no nexus established between the input services and the output service. The Commissioner (Appeals) upheld the rejection. The appellant then approached CESTAT Chennai. CRUCIAL COURT OBSERVATIONS (Verbatim)On Unregistered Premises:"There is no mention in the said Rules that service tax can be availed only in a registered unit. Moreover, in the circumstances cited by the appellant he could have been facilitated by examining the actual input/output details of CENVAT Credit from the records maintained by the appellant. There is no allegation that the appellant was asked for data which he refused to provide. Hence this finding in the impugned order must be set aside with consequential relief."On Nexus Between Input and Output Services:"I find that the OIO's are very cryptic and do not discuss as to why the input services cannot be corelated to the output. As stated by Hon'ble Justice Krishna Iyer in Organo Chemical Industries & Anr vs UOI [1979 AIR 1803 / 1980 SCR (1) 61], 'The inscrutable face of a sphinx is ordinarily incongruous with a judicial or quasi-judicial performance.' Hence the order merits being set aside on this ground alone.""The Commissioner (Appeals) has tried to improve upon the order of the Original Authority by discussing the law without examining the facts of use/non-use of each input service with the output. Further, I find that the judgment and Circular cited by the appellant also cover the issue in their favour." FINAL VERDICT CESTAT set aside the impugned orders and allowed both appeals, holding that registration of premises is not a mandatory pre-condition under Rule 5 of the CENVAT Credit Rules for claiming refund, and that a cryptic order rejecting nexus without examining facts is legally unsustainable. Consequential relief directed as per law. 👍 | ||||
| Cargotec India Pvt. Ltd. vs. Commissioner of GST & Central Excise 19-05-2025 Whether refund of unutilized CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004 on export of IT Software Services can be denied on the grounds of (i) services rendered from unregistered premises, and (ii) absence of nexus between input services aBACKGROUND The appellant, a 100% Export Oriented Unit operating under the Software Technology Parks Scheme, was registered for providing Information Technology Software Services under the Finance Act, 1994. The appellant filed refund claims of unutilized CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004 in respect of export of services for two quarters — April to June 2011 and July to September 2011. During April 2011, the appellant had shifted its premises from Adyar to Taramani, and the service tax registration for the new premises was amended only on 05.01.2012. The Original Authority sanctioned only a small portion of the refund and rejected the balance on two grounds — first, that the services were rendered from unregistered premises, and second, that there was no nexus established between the input services and the output service. The Commissioner (Appeals) upheld the rejection. The appellant then approached CESTAT Chennai. CRUCIAL COURT OBSERVATIONS (Verbatim)On Unregistered Premises:"There is no mention in the said Rules that service tax can be availed only in a registered unit. Moreover, in the circumstances cited by the appellant he could have been facilitated by examining the actual input/output details of CENVAT Credit from the records maintained by the appellant. There is no allegation that the appellant was asked for data which he refused to provide. Hence this finding in the impugned order must be set aside with consequential relief."On Nexus Between Input and Output Services:"I find that the OIO's are very cryptic and do not discuss as to why the input services cannot be corelated to the output. As stated by Hon'ble Justice Krishna Iyer in Organo Chemical Industries & Anr vs UOI [1979 AIR 1803 / 1980 SCR (1) 61], 'The inscrutable face of a sphinx is ordinarily incongruous with a judicial or quasi-judicial performance.' Hence the order merits being set aside on this ground alone.""The Commissioner (Appeals) has tried to improve upon the order of the Original Authority by discussing the law without examining the facts of use/non-use of each input service with the output. Further, I find that the judgment and Circular cited by the appellant also cover the issue in their favour." FINAL VERDICT CESTAT set aside the impugned orders and allowed both appeals, holding that registration of premises is not a mandatory pre-condition under Rule 5 of the CENVAT Credit Rules for claiming refund, and that a cryptic order rejecting nexus without examining facts is legally unsustainable. Consequential relief directed as per law. 👍 | ||||
| 163 | Mukesh Kumar Garg vs. Union of India & Others | 09-05-2025 | Whether a writ petition is maintainable against a penalty order under Section 74 read with Section 122(1) of the CGST Act, when the petitioner — alleged mastermind of a fake ITC network of 28 firms — claims he is not a taxable person and that penalty, | View Download |
BACKGROUNDThe Department conducted a detailed investigation and found that the petitioner and his son had incorporated or established 28 firms which, in collusion with various other traders, facilitated fraudulent availment of Input Tax Credit without any actual supply of goods or services. One of the firms — a sole proprietary concern of the petitioner — was identified as part of this network. The total fake ITC availed by entities controlled by the petitioner's son was alleged to be more than Rs.115 crores. After investigation, analysis of documents, and recording of statements of associated persons, a Show Cause Notice dated 31.07.2024 was issued to several companies and individuals including the petitioner. A detailed Order-in-Original was passed on 30.01.2025 confirming demands and imposing penalties on the petitioner and multiple connected firms and individuals. Personal hearing was granted and the petitioner filed a reply. Aggrieved, the petitioner filed a writ petition before the Delhi High Court. Notably, the petitioner's son had already filed an appeal before the Appellate Authority against the very same impugned order. CRUCIAL FACTSThe petitioner challenged the impugned order on the ground that he was not a taxable person under Section 74 read with Section 122(1) of the CGST Act, being neither the authorized signatory nor the operator of the main firm which availed the ITC — that firm being run by his son. He further argued that at best, under Section 122(3), the maximum penalty imposable on him was Rs.25,000/-. He also argued that under Section 75(13) of the CGST Act, once penalty is imposed under Section 73 or 74, no further penalty for the same act can be imposed under any other provision of the CGST Act. The Revenue contended that the petitioner's own sole proprietary concern was part of the fake firm network, and that staff of the son had admitted to irregularities committed by both father and son. The Revenue also urged that the impugned order being an appealable order under Section 107, the writ petition was not maintainable — particularly given that one co-noticee (the son) had already availed of the appellate remedy against the same order. COURT OBSERVATIONS (Verbatim — Crucial)On misuse of ITC and the GST regime:"It is observed by this Court in a large number of writ petitions that this facility under Section 16 of the CGST Act has been misused by various individuals, firms, entities and companies to avail of ITC even when the output tax is not deposited or when the entities or individuals who had to deposit the output tax are themselves found to be not existent. Such misuse, if permitted to continue, would create an enormous dent in the GST regime itself."On seriousness of allegations:"The allegations against the Petitioner in the impugned order are extremely serious in nature. They reveal the complex maze of transactions, which are alleged to have been carried out between various non-existent firms for the sake of enabling fraudulent availment of the ITC."On writ jurisdiction and factual disputes:"The Court, in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act."On multiplicity of proceedings:"The persons, who are involved in such transactions, cannot be allowed to try different remedies before different forums, inasmuch as the same would also result in multiplicity of litigation and could also lead to contradictory findings of different Forums, Tribunals and Courts."On when writ jurisdiction is available:"Writ jurisdiction is not barred in such cases, especially if there is any arbitrary action by the Department or the order itself is without jurisdiction or there is non-compliance of principles of natural justice. In the present case, none of the three grounds are made out as the SCN and the impugned order have been passed by the appropriate authority which has jurisdiction. Secondly, the Petitioner had been awarded an opportunity to file a reply and had also been afforded a hearing."On clean hands doctrine:"It is well settled in various decisions of the Supreme Court that petitions under Article 226 of the Constitution of India would be liable to be entertained only in case of persons who come with clean hands and not in favour of the persons who present twisted facts or misrepresent the true and correct picture on record." FINAL VERDICTThe writ petition is dismissed with costs of Rs.50,000/- to be deposited with the Delhi High Court Bar Association within four weeks. The petitioner is at liberty to urge all issues in an appeal under Section 107 of the CGST Act.👎 THUMBS DOWN (Against Assessee — Dismissed with costs) | ||||
| Mukesh Kumar Garg vs. Union of India & Others 09-05-2025 Whether a writ petition is maintainable against a penalty order under Section 74 read with Section 122(1) of the CGST Act, when the petitioner — alleged mastermind of a fake ITC network of 28 firms — claims he is not a taxable person and that penalty,BACKGROUNDThe Department conducted a detailed investigation and found that the petitioner and his son had incorporated or established 28 firms which, in collusion with various other traders, facilitated fraudulent availment of Input Tax Credit without any actual supply of goods or services. One of the firms — a sole proprietary concern of the petitioner — was identified as part of this network. The total fake ITC availed by entities controlled by the petitioner's son was alleged to be more than Rs.115 crores. After investigation, analysis of documents, and recording of statements of associated persons, a Show Cause Notice dated 31.07.2024 was issued to several companies and individuals including the petitioner. A detailed Order-in-Original was passed on 30.01.2025 confirming demands and imposing penalties on the petitioner and multiple connected firms and individuals. Personal hearing was granted and the petitioner filed a reply. Aggrieved, the petitioner filed a writ petition before the Delhi High Court. Notably, the petitioner's son had already filed an appeal before the Appellate Authority against the very same impugned order. CRUCIAL FACTSThe petitioner challenged the impugned order on the ground that he was not a taxable person under Section 74 read with Section 122(1) of the CGST Act, being neither the authorized signatory nor the operator of the main firm which availed the ITC — that firm being run by his son. He further argued that at best, under Section 122(3), the maximum penalty imposable on him was Rs.25,000/-. He also argued that under Section 75(13) of the CGST Act, once penalty is imposed under Section 73 or 74, no further penalty for the same act can be imposed under any other provision of the CGST Act. The Revenue contended that the petitioner's own sole proprietary concern was part of the fake firm network, and that staff of the son had admitted to irregularities committed by both father and son. The Revenue also urged that the impugned order being an appealable order under Section 107, the writ petition was not maintainable — particularly given that one co-noticee (the son) had already availed of the appellate remedy against the same order. COURT OBSERVATIONS (Verbatim — Crucial)On misuse of ITC and the GST regime:"It is observed by this Court in a large number of writ petitions that this facility under Section 16 of the CGST Act has been misused by various individuals, firms, entities and companies to avail of ITC even when the output tax is not deposited or when the entities or individuals who had to deposit the output tax are themselves found to be not existent. Such misuse, if permitted to continue, would create an enormous dent in the GST regime itself."On seriousness of allegations:"The allegations against the Petitioner in the impugned order are extremely serious in nature. They reveal the complex maze of transactions, which are alleged to have been carried out between various non-existent firms for the sake of enabling fraudulent availment of the ITC."On writ jurisdiction and factual disputes:"The Court, in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act."On multiplicity of proceedings:"The persons, who are involved in such transactions, cannot be allowed to try different remedies before different forums, inasmuch as the same would also result in multiplicity of litigation and could also lead to contradictory findings of different Forums, Tribunals and Courts."On when writ jurisdiction is available:"Writ jurisdiction is not barred in such cases, especially if there is any arbitrary action by the Department or the order itself is without jurisdiction or there is non-compliance of principles of natural justice. In the present case, none of the three grounds are made out as the SCN and the impugned order have been passed by the appropriate authority which has jurisdiction. Secondly, the Petitioner had been awarded an opportunity to file a reply and had also been afforded a hearing."On clean hands doctrine:"It is well settled in various decisions of the Supreme Court that petitions under Article 226 of the Constitution of India would be liable to be entertained only in case of persons who come with clean hands and not in favour of the persons who present twisted facts or misrepresent the true and correct picture on record." FINAL VERDICTThe writ petition is dismissed with costs of Rs.50,000/- to be deposited with the Delhi High Court Bar Association within four weeks. The petitioner is at liberty to urge all issues in an appeal under Section 107 of the CGST Act.👎 THUMBS DOWN (Against Assessee — Dismissed with costs) | ||||
| 164 | Indian Medical Association, Kerala State Branch v. Union of India & Ors. | 11-04-2025 | Challenge to constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST Act, 2017 (as amended by Finance Act, 2021) relating to taxation of services by clubs/associations to members. Issue of taxability under GST and validity of retrospective a | View Download |
Facts:The petitioner association challenged GST liability on services rendered to its members under various welfare schemes. It relied on the doctrine of mutuality, contending that services by an association to its members are not taxable. Amendments introduced by the Finance Act, 2021 inserted Section 7(1)(aa) deeming such transactions as taxable supplies retrospectively from 01.07.2017. The Single Judge upheld the validity of levy but struck down the retrospective operation, leading to cross appeals by both parties. Court Decision:The Division Bench upheld the constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST/KGST Acts, holding that the legislature was competent to treat transactions between an association and its members as taxable supplies. It held that the amendment validly removes the basis of the doctrine of mutuality for GST purposes. However, the Court held that giving retrospective effect to the amendment from 01.07.2017 was not legally sustainable on principles of fairness. Accordingly, retrospective operation of the amendment was set aside, while upholding its prospective applicability. Cases Referred by Court:• State of West Bengal v. Calcutta Club Ltd. • Ranchi Club Ltd. v. Chief Commissioner of Central Excise & Service Tax • Secretary, Madras Gymkhana Club Employees Union v. Management of Gymkhana Club • Cricket Club of India Ltd. v. Bombay Labour Union • JCTO v. Young Men’s Indian Association • State of Madras v. Gannon Dunkerley & Co. • Union of India v. Martin Lottery Agencies Ltd. • Jayam & Co. v. State of Tamil Nadu • Rai Ramakrishna v. State of Bihar • Star India Pvt. Ltd. v. CCE • Union of India v. Exide Industries Ltd. | ||||
| Indian Medical Association, Kerala State Branch v. Union of India & Ors. 11-04-2025 Challenge to constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST Act, 2017 (as amended by Finance Act, 2021) relating to taxation of services by clubs/associations to members. Issue of taxability under GST and validity of retrospective aFacts:The petitioner association challenged GST liability on services rendered to its members under various welfare schemes. It relied on the doctrine of mutuality, contending that services by an association to its members are not taxable. Amendments introduced by the Finance Act, 2021 inserted Section 7(1)(aa) deeming such transactions as taxable supplies retrospectively from 01.07.2017. The Single Judge upheld the validity of levy but struck down the retrospective operation, leading to cross appeals by both parties. Court Decision:The Division Bench upheld the constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST/KGST Acts, holding that the legislature was competent to treat transactions between an association and its members as taxable supplies. It held that the amendment validly removes the basis of the doctrine of mutuality for GST purposes. However, the Court held that giving retrospective effect to the amendment from 01.07.2017 was not legally sustainable on principles of fairness. Accordingly, retrospective operation of the amendment was set aside, while upholding its prospective applicability. Cases Referred by Court:• State of West Bengal v. Calcutta Club Ltd. • Ranchi Club Ltd. v. Chief Commissioner of Central Excise & Service Tax • Secretary, Madras Gymkhana Club Employees Union v. Management of Gymkhana Club • Cricket Club of India Ltd. v. Bombay Labour Union • JCTO v. Young Men’s Indian Association • State of Madras v. Gannon Dunkerley & Co. • Union of India v. Martin Lottery Agencies Ltd. • Jayam & Co. v. State of Tamil Nadu • Rai Ramakrishna v. State of Bihar • Star India Pvt. Ltd. v. CCE • Union of India v. Exide Industries Ltd. | ||||
| 165 | Shrinivasa Realcon (April 2025) | 08-04-2025 | Whether a Development Agreement granting a developer the right to construct a multi-storied complex on the landowner's plot — without any purchase of TDR or FSI from any external person/entity — falls within Entry 5B of the GST Notification dated 28.0 | View Download |
BACKGROUND & FACTSShrinivasa Realcon Pvt. Ltd. (petitioner/developer) entered into an Agreement of Development dated 07.01.2022 (also referred to as 07.04.2022 in the order) with a landowner for development of Plot No. 2 admeasuring 8,000 sq. ft., Mouza Lendra, into a multi-storied complex. The consideration under the agreement was Rs. 7 crores and two apartments to the landowner. The petitioner was granted the right to develop the property by utilizing its present FSI or any increases thereof. No TDR or FSI was purchased by the owner or by the petitioner from any external person or entity in execution of this agreement.The department issued a Show Cause Notice dated 24.07.2024 demanding GST on the aforesaid transaction, followed by a second Show Cause Notice dated 14.08.2024, claiming GST under Entry 5B of the Notification dated 28.06.2017 as amended by Notification dated 29.03.2019. The department sought to rely on Clause 18 of the Development Agreement — which merely required the landowner to execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, and execute apartment deeds in favour of individual buyers nominated by the developer — to contend that a "transfer" was involved attracting Entry 5B. An order dated 10.12.2024 was also passed pursuant to the show cause notices. The petitioner challenged both the show cause notices and the consequent order before the High Court. COURT OBSERVATIONS (Verbatim)Para 4: "A perusal of the language of entry 5B, above would indicate, that it relates to services which can be said to be supplied by any person by way of transfer of development rights or Floor Space Index (FSI) [including additional FSI] for construction of a project by a promoter. The expression 'transfer of development rights' read in conjunction with 'FSI' as indicated in entry 5B, would only relate to a TDR (Transferable Development Rights) as contemplated by clause 11.2.2 under the regulations for grant of TDR in the Unified Development Control and Promotion Regulations for the State of Maharashtra, clause 11.2.1 of which defines transferable development rights, to mean compensation in the form of Floor Space Index (FSI) or development rights, which shall entitle the owner for construction of built up area subject to the provisions in the said regulations. It therefore, follows, that the TDR / FSI as contemplated by entry 5B, cannot be related, to the rights which a developer derives from the owner under the agreement of development for constructing the building for the owners, in lieu of the owner agreeing to permit the developer to transfer certain built up units for consideration to be appropriated by the developer."Para 5: "In the instant case, the agreement dated 07.4.2022 (page 27) is an agreement of development entered into between the petitioner and the land owner, in terms of which, the petitioner, has been granted right to develop the property in question by utilizing its present FSI or any increases thereof. Mr. Naik, learned Senior Counsel, upon instructions, submits, that in the execution of the agreement dated 07.4.2022 no TDR or FSI has been purchased by the owner or for that matter by the petitioner from any person / entity whomsoever."Para 6: "Clause 18 relied upon by Mr. Nalamwar, learned counsel for the respondents merely indicates, that the owners shall sign and execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, submitting the entire scheme to the provisions of the Maharashtra Apartment Ownership Act and the execution of the apartment deeds in favour of each individual buyers to the nominees of the developers. It is, therefore, apparent, that the transaction as contemplated in terms of the agreement dated 07.4.2022 does not fall within entry 5B of the Notification dated 28.6.2017, as it stand amended by the Notification dated 29.3.2019, in view of which, neither the show cause notice dated 14.08.2023 (page 123) nor the consequent order dated 10.12.2024 (page 137), can be sustained and are hereby quashed and set aside." FINAL VERDICTWrit petition allowed. The Development Agreement dated 07.04.2022 does not involve any TDR/FSI as contemplated under Entry 5B of the GST Notification. Both the show cause notices and the consequent order are quashed and set aside. GST under Entry 5B is not leviable on the transaction. 👍 | ||||
| Shrinivasa Realcon (April 2025) 08-04-2025 Whether a Development Agreement granting a developer the right to construct a multi-storied complex on the landowner's plot — without any purchase of TDR or FSI from any external person/entity — falls within Entry 5B of the GST Notification dated 28.0BACKGROUND & FACTSShrinivasa Realcon Pvt. Ltd. (petitioner/developer) entered into an Agreement of Development dated 07.01.2022 (also referred to as 07.04.2022 in the order) with a landowner for development of Plot No. 2 admeasuring 8,000 sq. ft., Mouza Lendra, into a multi-storied complex. The consideration under the agreement was Rs. 7 crores and two apartments to the landowner. The petitioner was granted the right to develop the property by utilizing its present FSI or any increases thereof. No TDR or FSI was purchased by the owner or by the petitioner from any external person or entity in execution of this agreement.The department issued a Show Cause Notice dated 24.07.2024 demanding GST on the aforesaid transaction, followed by a second Show Cause Notice dated 14.08.2024, claiming GST under Entry 5B of the Notification dated 28.06.2017 as amended by Notification dated 29.03.2019. The department sought to rely on Clause 18 of the Development Agreement — which merely required the landowner to execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, and execute apartment deeds in favour of individual buyers nominated by the developer — to contend that a "transfer" was involved attracting Entry 5B. An order dated 10.12.2024 was also passed pursuant to the show cause notices. The petitioner challenged both the show cause notices and the consequent order before the High Court. COURT OBSERVATIONS (Verbatim)Para 4: "A perusal of the language of entry 5B, above would indicate, that it relates to services which can be said to be supplied by any person by way of transfer of development rights or Floor Space Index (FSI) [including additional FSI] for construction of a project by a promoter. The expression 'transfer of development rights' read in conjunction with 'FSI' as indicated in entry 5B, would only relate to a TDR (Transferable Development Rights) as contemplated by clause 11.2.2 under the regulations for grant of TDR in the Unified Development Control and Promotion Regulations for the State of Maharashtra, clause 11.2.1 of which defines transferable development rights, to mean compensation in the form of Floor Space Index (FSI) or development rights, which shall entitle the owner for construction of built up area subject to the provisions in the said regulations. It therefore, follows, that the TDR / FSI as contemplated by entry 5B, cannot be related, to the rights which a developer derives from the owner under the agreement of development for constructing the building for the owners, in lieu of the owner agreeing to permit the developer to transfer certain built up units for consideration to be appropriated by the developer."Para 5: "In the instant case, the agreement dated 07.4.2022 (page 27) is an agreement of development entered into between the petitioner and the land owner, in terms of which, the petitioner, has been granted right to develop the property in question by utilizing its present FSI or any increases thereof. Mr. Naik, learned Senior Counsel, upon instructions, submits, that in the execution of the agreement dated 07.4.2022 no TDR or FSI has been purchased by the owner or for that matter by the petitioner from any person / entity whomsoever."Para 6: "Clause 18 relied upon by Mr. Nalamwar, learned counsel for the respondents merely indicates, that the owners shall sign and execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, submitting the entire scheme to the provisions of the Maharashtra Apartment Ownership Act and the execution of the apartment deeds in favour of each individual buyers to the nominees of the developers. It is, therefore, apparent, that the transaction as contemplated in terms of the agreement dated 07.4.2022 does not fall within entry 5B of the Notification dated 28.6.2017, as it stand amended by the Notification dated 29.3.2019, in view of which, neither the show cause notice dated 14.08.2023 (page 123) nor the consequent order dated 10.12.2024 (page 137), can be sustained and are hereby quashed and set aside." FINAL VERDICTWrit petition allowed. The Development Agreement dated 07.04.2022 does not involve any TDR/FSI as contemplated under Entry 5B of the GST Notification. Both the show cause notices and the consequent order are quashed and set aside. GST under Entry 5B is not leviable on the transaction. 👍 | ||||
| 166 | Impressive Data Services Private Limited vs Commissioner (Appeals-I), Central Tax GST, Delhi | 05-04-2025 | Appeal – Mandatory pre-deposit under Section 107(6) of the CGST Act, 2017 – whether High Court can waive statutory pre-deposit for filing appeal. | View Download |
Facts:The petitioner challenged the requirement of pre-deposit under Section 107(6) of the CGST Act for filing an appeal against proceedings arising from a show cause notice dated 14.06.2022 alleging wrongful availment of input tax credit for the period 2017-18 to 2019-20. The petitioner sought waiver of the pre-deposit on the ground of financial hardship and amounts allegedly receivable from Government departments.Court Decision:The Court held that Section 107(6) mandates payment of the admitted amount of tax, interest, penalty and a pre-deposit of 10% of the disputed tax for filing an appeal. The provision does not confer discretion on the Court to waive the statutory pre-deposit requirement.The Court declined the request for waiver of pre-deposit and held that the petitioner must comply with the statutory requirement. However, the petitioner was permitted to approach the Appellate Authority and request adjustment of amounts already lying with the department or government entities towards the pre-deposit. The writ petition was disposed of with liberty to pursue the remedy before the appellate authority.Cases Referred by Court:Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del)Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC)Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr.Pioneer Corporation v. Union of India, (2016) 340 ELT 63Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del)Vice-Chancellor, University of Allahabad v. Dr. Anand Prakash MishraA.B. Bhaskara Rao v. CBIManish Goel v. Rohini GoelState of Bihar v. Arvind Kumar | ||||
| Impressive Data Services Private Limited vs Commissioner (Appeals-I), Central Tax GST, Delhi 05-04-2025 Appeal – Mandatory pre-deposit under Section 107(6) of the CGST Act, 2017 – whether High Court can waive statutory pre-deposit for filing appeal.Facts:The petitioner challenged the requirement of pre-deposit under Section 107(6) of the CGST Act for filing an appeal against proceedings arising from a show cause notice dated 14.06.2022 alleging wrongful availment of input tax credit for the period 2017-18 to 2019-20. The petitioner sought waiver of the pre-deposit on the ground of financial hardship and amounts allegedly receivable from Government departments.Court Decision:The Court held that Section 107(6) mandates payment of the admitted amount of tax, interest, penalty and a pre-deposit of 10% of the disputed tax for filing an appeal. The provision does not confer discretion on the Court to waive the statutory pre-deposit requirement.The Court declined the request for waiver of pre-deposit and held that the petitioner must comply with the statutory requirement. However, the petitioner was permitted to approach the Appellate Authority and request adjustment of amounts already lying with the department or government entities towards the pre-deposit. The writ petition was disposed of with liberty to pursue the remedy before the appellate authority.Cases Referred by Court:Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del)Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC)Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr.Pioneer Corporation v. Union of India, (2016) 340 ELT 63Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del)Vice-Chancellor, University of Allahabad v. Dr. Anand Prakash MishraA.B. Bhaskara Rao v. CBIManish Goel v. Rohini GoelState of Bihar v. Arvind Kumar | ||||
| 167 | Tvl. Sam Enterprises v. State Tax Officer, | 18-03-2025 | Validity of GST demand order passed under Section 73 of the CGST/TNGST Act, 2017 without affording personal hearing to the taxpayer — violation of principles of natural justice | View Download |
BACKGROUNDThe petitioner, a proprietary firm, was subjected to GST proceedings for the tax period 2019-20 by the State Tax Officer, Arumbakkam Assessment Circle, Chennai. The respondent-authority uploaded all notices and communications solely on the GST online portal. The petitioner remained unaware of these notices and consequently could not file a reply within the stipulated time. Taking advantage of this lapse, the respondent passed a demand order dated 27.08.2024 under Section 73, along with a summary in Form GST DRC-07, without granting any opportunity of personal hearing. Further, the tax authority had already recovered more than 80% of the total disputed tax demand of Rs. 2,12,546/- from the petitioner's bank account through attachment. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India before the Madras High Court, challenging the impugned order on twin grounds: (i) contravention of the CGST/TNGST Act, 2017, and (ii) violation of principles of natural justice. COURT OBSERVATIONS (Verbatim)Para 7: "In the cases on hand, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits." FINAL VERDICTThe impugned order dated 27.08.2024 was set aside and the matter was remanded to the State Tax Officer for fresh consideration. The petitioner was directed to file reply/objections with supporting documents within three weeks from receipt of the order. The respondent was directed to thereafter issue a 14-day clear notice fixing a personal hearing date and pass appropriate orders on merits, in accordance with law, as expeditiously as possible. No costs were awarded.👍 In favour of the Assessee | ||||
| Tvl. Sam Enterprises v. State Tax Officer, 18-03-2025 Validity of GST demand order passed under Section 73 of the CGST/TNGST Act, 2017 without affording personal hearing to the taxpayer — violation of principles of natural justiceBACKGROUNDThe petitioner, a proprietary firm, was subjected to GST proceedings for the tax period 2019-20 by the State Tax Officer, Arumbakkam Assessment Circle, Chennai. The respondent-authority uploaded all notices and communications solely on the GST online portal. The petitioner remained unaware of these notices and consequently could not file a reply within the stipulated time. Taking advantage of this lapse, the respondent passed a demand order dated 27.08.2024 under Section 73, along with a summary in Form GST DRC-07, without granting any opportunity of personal hearing. Further, the tax authority had already recovered more than 80% of the total disputed tax demand of Rs. 2,12,546/- from the petitioner's bank account through attachment. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India before the Madras High Court, challenging the impugned order on twin grounds: (i) contravention of the CGST/TNGST Act, 2017, and (ii) violation of principles of natural justice. COURT OBSERVATIONS (Verbatim)Para 7: "In the cases on hand, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits." FINAL VERDICTThe impugned order dated 27.08.2024 was set aside and the matter was remanded to the State Tax Officer for fresh consideration. The petitioner was directed to file reply/objections with supporting documents within three weeks from receipt of the order. The respondent was directed to thereafter issue a 14-day clear notice fixing a personal hearing date and pass appropriate orders on merits, in accordance with law, as expeditiously as possible. No costs were awarded.👍 In favour of the Assessee | ||||
| 168 | Netgear Technologies India Pvt. Ltd. v. Commissioner CGST, Karol Bagh Division, GST Delhi North & Another | 17-03-2025 | Validity of Show Cause Notice issued under Section 74 of the CGST Act, 2017 for recovery of refund already sanctioned pursuant to an Appellate Order and High Court direction, without alleging fraud, wilful misstatement or suppression of facts | View Download |
BackgroundNetgear Technologies India Pvt. Ltd. had filed a refund application claiming export of services without payment of IGST for the tax period October 2017 to March 2018. The refund was initially rejected. On appeal, the Joint Commissioner (Appeals) allowed the appeal vide Order-in-Appeal (OIA) dated March 9, 2021, holding that the services rendered amounted to export of services and that the petitioner was not an intermediary. The Revenue neither challenged this OIA nor obtained any stay against it. The petitioner then filed a writ petition before the Delhi High Court seeking disbursement of refund in terms of the OIA. The High Court, in W.P.(C) No. 10461 of 2022 decided on May 18, 2023, directed the respondents to disburse the refund with applicable interest within four weeks. Pursuant to this, the refund of Rs. 26,88,280 along with interest of Rs. 5,04,439 was sanctioned vide order dated July 26, 2023. Thereafter, the Revenue — instead of pursuing the proper appellate remedy — issued a fresh Show Cause Notice (SCN) dated August 3, 2024 under Section 74 of the CGST Act for the same tax period, alleging that the refund was erroneously sanctioned and seeking its recovery along with interest and penalty. Court Observations (Verbatim)On the nature of the SCN and absence of fraud allegations:"The SCN carries no specific allegation of fraud, wilful misstatement or suppression against the petitioner. We are thus of the firm view that absent the same, the jurisdiction assumed by the respondent under section 74 is clearly erroneous and untenable."On the requirement for invoking Section 74:"It is pertinent to note that section 74 uses the expression 'by reason of' and thus being indicative of the power conferred by that provision being liable to be invoked only if it be found that the assessee had indulged in acts constituting fraud, wilful misstatement or suppression of facts in order to evade tax."On mechanical issuance of the SCN:"In view of the absence of clear and specific reasoning in the impugned SCN and which could be read as justifying the invocation of section 74, we find ourselves unable to sustain the impugned SCN for a tax period that had already been assessed by the GST authorities or to countenance the SCN as operating as a fetter on the grant of refund which was affirmed and recognised by the court in Netgear Technologies India."On the real intent behind the SCN:"We are constrained to observe that the SCN appears to have been issued solely to avoid the inevitable consequences which flow from our decision rendered inter partes in the earlier round of litigation. We are of the firm opinion that a claim for refund cannot be legally or justifiably stalled by the adoption of circuitous means as the present." Cases Cited by the CourtNetgear Technologies India Pvt. Ltd. v. Assistant Commissioner of GST, Delhi East Commissionerate — 2023 SCC OnLine Del 8724 (W.P.(C) No. 10461 of 2022, May 18, 2023)Zones Corporate Solutions Pvt. Ltd. v. Commissioner of Central Goods and Services Tax Delhi East — 2020-VIL-302-DELAlex Tour and Travel Private Limited v. Assistant Commissioner, CGST, Division-Janakpuri — (2024) 122 GSTR 81 (Delhi); 2023 SCC OnLine Del 2709Parity Infotech Solutions Pvt. Ltd. v. Government of NCT of Delhi — (2023) 120 GSTR 30 (Delhi); (2023) 4 HCC (Del) 685HCL Infotech Ltd. v. Commissioner, Commercial Tax — (2025) 141 GSTR 324 (All); 2024 SCC OnLine All 5769Raj Bahadur Narain Singh Sugar Mills Ltd. v. Union of India — (1997) 6 SCC 81; (1996) 88 ELT 24 (SC)Collector of Central Excise v. H.M.M. Limited — 1995 SCC OnLine SC 82; 1995 Supp (3) SCC 322; (1995) 76 ELT 497 (SC) Final VerdictThe writ petition was allowed. The impugned SCN dated August 3, 2024 was quashed and set aside. The refund claim of the petitioner was directed to be attended to and disposed of forthwith, subject to any orders that may be passed on any appeal the respondents may institute against. | ||||
| Netgear Technologies India Pvt. Ltd. v. Commissioner CGST, Karol Bagh Division, GST Delhi North & Another 17-03-2025 Validity of Show Cause Notice issued under Section 74 of the CGST Act, 2017 for recovery of refund already sanctioned pursuant to an Appellate Order and High Court direction, without alleging fraud, wilful misstatement or suppression of factsBackgroundNetgear Technologies India Pvt. Ltd. had filed a refund application claiming export of services without payment of IGST for the tax period October 2017 to March 2018. The refund was initially rejected. On appeal, the Joint Commissioner (Appeals) allowed the appeal vide Order-in-Appeal (OIA) dated March 9, 2021, holding that the services rendered amounted to export of services and that the petitioner was not an intermediary. The Revenue neither challenged this OIA nor obtained any stay against it. The petitioner then filed a writ petition before the Delhi High Court seeking disbursement of refund in terms of the OIA. The High Court, in W.P.(C) No. 10461 of 2022 decided on May 18, 2023, directed the respondents to disburse the refund with applicable interest within four weeks. Pursuant to this, the refund of Rs. 26,88,280 along with interest of Rs. 5,04,439 was sanctioned vide order dated July 26, 2023. Thereafter, the Revenue — instead of pursuing the proper appellate remedy — issued a fresh Show Cause Notice (SCN) dated August 3, 2024 under Section 74 of the CGST Act for the same tax period, alleging that the refund was erroneously sanctioned and seeking its recovery along with interest and penalty. Court Observations (Verbatim)On the nature of the SCN and absence of fraud allegations:"The SCN carries no specific allegation of fraud, wilful misstatement or suppression against the petitioner. We are thus of the firm view that absent the same, the jurisdiction assumed by the respondent under section 74 is clearly erroneous and untenable."On the requirement for invoking Section 74:"It is pertinent to note that section 74 uses the expression 'by reason of' and thus being indicative of the power conferred by that provision being liable to be invoked only if it be found that the assessee had indulged in acts constituting fraud, wilful misstatement or suppression of facts in order to evade tax."On mechanical issuance of the SCN:"In view of the absence of clear and specific reasoning in the impugned SCN and which could be read as justifying the invocation of section 74, we find ourselves unable to sustain the impugned SCN for a tax period that had already been assessed by the GST authorities or to countenance the SCN as operating as a fetter on the grant of refund which was affirmed and recognised by the court in Netgear Technologies India."On the real intent behind the SCN:"We are constrained to observe that the SCN appears to have been issued solely to avoid the inevitable consequences which flow from our decision rendered inter partes in the earlier round of litigation. We are of the firm opinion that a claim for refund cannot be legally or justifiably stalled by the adoption of circuitous means as the present." Cases Cited by the CourtNetgear Technologies India Pvt. Ltd. v. Assistant Commissioner of GST, Delhi East Commissionerate — 2023 SCC OnLine Del 8724 (W.P.(C) No. 10461 of 2022, May 18, 2023)Zones Corporate Solutions Pvt. Ltd. v. Commissioner of Central Goods and Services Tax Delhi East — 2020-VIL-302-DELAlex Tour and Travel Private Limited v. Assistant Commissioner, CGST, Division-Janakpuri — (2024) 122 GSTR 81 (Delhi); 2023 SCC OnLine Del 2709Parity Infotech Solutions Pvt. Ltd. v. Government of NCT of Delhi — (2023) 120 GSTR 30 (Delhi); (2023) 4 HCC (Del) 685HCL Infotech Ltd. v. Commissioner, Commercial Tax — (2025) 141 GSTR 324 (All); 2024 SCC OnLine All 5769Raj Bahadur Narain Singh Sugar Mills Ltd. v. Union of India — (1997) 6 SCC 81; (1996) 88 ELT 24 (SC)Collector of Central Excise v. H.M.M. Limited — 1995 SCC OnLine SC 82; 1995 Supp (3) SCC 322; (1995) 76 ELT 497 (SC) Final VerdictThe writ petition was allowed. The impugned SCN dated August 3, 2024 was quashed and set aside. The refund claim of the petitioner was directed to be attended to and disposed of forthwith, subject to any orders that may be passed on any appeal the respondents may institute against. | ||||
| 169 | Hari Shanker Transport v. Commissioner of Commercial Tax U.P. Lucknow & Anr. | 11-03-2025 | Validity of a GST demand order passed under Section 73(9) of the CGST Act, 2017 without setting out relevant facts and basis of decision as mandated under Section 75(6) of the Act. | View Download |
BackgroundThe petitioner, a transport firm, was issued a scrutiny notice under Section 61 of the GST Act on 30.11.2023 pointing out discrepancies in its returns. The petitioner remained unaware of the notice as it was uploaded only on the departmental portal and accordingly filed no reply. A subsequent show cause notice under Section 73 of the Act was issued on 27.01.2024, requiring reply by 27.02.2024 and fixing personal hearing on 20.02.2024. The petitioner again did not respond. Consequently, the Deputy Commissioner, State Tax, Sector-3, Sonbhadra passed a demand order dated 27.04.2024 under Section 73(9) of the Act, creating a tax liability of ₹85,84,759/-. A rectification application filed by the petitioner under Section 161 of the Act was also rejected vide order dated 25.10.2024. Both orders were challenged by way of the present writ petition.Court Observations (Verbatim)Para 7: "A bare look at the order impugned dated 27.04.2024 passed under Section 73(9) of the Act reveals that the same only makes reference to issuance of two notices, the fact that they have not been responded to, and a demand has been raised."Para 8: "The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no.2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order."Final VerdictThe writ petition was allowed. The demand order dated 27.04.2024 was quashed and set aside. The matter was remanded back to the Deputy Commissioner, State Tax, Sector-3, Sonbhadra, with a direction to afford the petitioner an opportunity to file a reply to the Section 73 show cause notice within four weeks, followed by a personal hearing, and thereafter pass a fresh order in accordance with law.👍 In favour of the AssesseeCases / Provisions ReferredNo case laws cited by the Court. The following statutory provisions of the GST Act, 2017 were referred to:Section 61 — Scrutiny of ReturnsSection 73 — Determination of tax not paid / short paid (Show Cause Notice)Section 73(9) — Order of demand after adjudicationSection 75(6) — General provisions relating to determination of tax: requirement to set out relevant facts and basis of decision in the orderSection 161 — Rectification of errors apparent on the face of record | ||||
| Hari Shanker Transport v. Commissioner of Commercial Tax U.P. Lucknow & Anr. 11-03-2025 Validity of a GST demand order passed under Section 73(9) of the CGST Act, 2017 without setting out relevant facts and basis of decision as mandated under Section 75(6) of the Act.BackgroundThe petitioner, a transport firm, was issued a scrutiny notice under Section 61 of the GST Act on 30.11.2023 pointing out discrepancies in its returns. The petitioner remained unaware of the notice as it was uploaded only on the departmental portal and accordingly filed no reply. A subsequent show cause notice under Section 73 of the Act was issued on 27.01.2024, requiring reply by 27.02.2024 and fixing personal hearing on 20.02.2024. The petitioner again did not respond. Consequently, the Deputy Commissioner, State Tax, Sector-3, Sonbhadra passed a demand order dated 27.04.2024 under Section 73(9) of the Act, creating a tax liability of ₹85,84,759/-. A rectification application filed by the petitioner under Section 161 of the Act was also rejected vide order dated 25.10.2024. Both orders were challenged by way of the present writ petition.Court Observations (Verbatim)Para 7: "A bare look at the order impugned dated 27.04.2024 passed under Section 73(9) of the Act reveals that the same only makes reference to issuance of two notices, the fact that they have not been responded to, and a demand has been raised."Para 8: "The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no.2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order."Final VerdictThe writ petition was allowed. The demand order dated 27.04.2024 was quashed and set aside. The matter was remanded back to the Deputy Commissioner, State Tax, Sector-3, Sonbhadra, with a direction to afford the petitioner an opportunity to file a reply to the Section 73 show cause notice within four weeks, followed by a personal hearing, and thereafter pass a fresh order in accordance with law.👍 In favour of the AssesseeCases / Provisions ReferredNo case laws cited by the Court. The following statutory provisions of the GST Act, 2017 were referred to:Section 61 — Scrutiny of ReturnsSection 73 — Determination of tax not paid / short paid (Show Cause Notice)Section 73(9) — Order of demand after adjudicationSection 75(6) — General provisions relating to determination of tax: requirement to set out relevant facts and basis of decision in the orderSection 161 — Rectification of errors apparent on the face of record | ||||
| 170 | Armour Security (India) Ltd. vs Commissioner, CGST, Delhi East Commissionerate & Anr. | 06-03-2025 | Whether issuance of summons under Section 70 CGST Act amounts to “initiation of proceedings” under Section 6(2)(b) and bars parallel action by another authority. | View Download |
Facts :The petitioner company received a show cause notice under Section 73 CGST Act from State GST authorities for alleged tax shortfall and excess ITC.Subsequently, Central GST authorities conducted a search and issued summons under Section 70 requiring production of documents.The petitioner challenged the summons before Delhi High Court, contending that parallel proceedings on the same subject matter were barred under Section 6(2)(b).The High Court dismissed the writ petition, holding that summons and investigation are not “proceedings”.Court Decision:The Supreme Court upheld the High Court’s view and dismissed the SLP.It held that issuance of summons under Section 70 is part of inquiry/investigation and cannot be equated with “initiation of proceedings” under Section 6(2)(b).“Proceedings” under Section 6(2)(b) refer to adjudicatory actions such as assessment, demand, or penalty proceedings under Sections 73 or 74.Summons is only a step to collect evidence and precedes formal proceedings; hence, no bar on parallel inquiry by another authority.The Court interpreted Section 6 within the framework of “single interface” and “cross-empowerment”, holding that intelligence-based enforcement actions can be initiated by both Central and State authorities.Cases Referred:G.K. Trading v. Union of IndiaKuppan Gounder P.G. Natarajan v. Directorate General of GST IntelligenceAnurag Suri v. Director General of GST IntelligenceIndo International Tobacco Ltd. v. Vivek PrasadK.T. Saidalavi v. State Tax OfficerRais Khan v. Addl. CommissionerM/s R.P. Buildcon Pvt. Ltd. v. Superintendent, CGSTTvl. Metal Trade Incorporation v. GST Council SecretariatVivek Narsaria v. State of JharkhandStalwart Alloys India Pvt. Ltd. v. Union of IndiaKundlas Loh Udyog v. State of H.P.Chief Commissioner of CGST v. Safari Retreats Pvt. Ltd.K.P. Mohammed Salim v. CIT | ||||
| Armour Security (India) Ltd. vs Commissioner, CGST, Delhi East Commissionerate & Anr. 06-03-2025 Whether issuance of summons under Section 70 CGST Act amounts to “initiation of proceedings” under Section 6(2)(b) and bars parallel action by another authority.Facts :The petitioner company received a show cause notice under Section 73 CGST Act from State GST authorities for alleged tax shortfall and excess ITC.Subsequently, Central GST authorities conducted a search and issued summons under Section 70 requiring production of documents.The petitioner challenged the summons before Delhi High Court, contending that parallel proceedings on the same subject matter were barred under Section 6(2)(b).The High Court dismissed the writ petition, holding that summons and investigation are not “proceedings”.Court Decision:The Supreme Court upheld the High Court’s view and dismissed the SLP.It held that issuance of summons under Section 70 is part of inquiry/investigation and cannot be equated with “initiation of proceedings” under Section 6(2)(b).“Proceedings” under Section 6(2)(b) refer to adjudicatory actions such as assessment, demand, or penalty proceedings under Sections 73 or 74.Summons is only a step to collect evidence and precedes formal proceedings; hence, no bar on parallel inquiry by another authority.The Court interpreted Section 6 within the framework of “single interface” and “cross-empowerment”, holding that intelligence-based enforcement actions can be initiated by both Central and State authorities.Cases Referred:G.K. Trading v. Union of IndiaKuppan Gounder P.G. Natarajan v. Directorate General of GST IntelligenceAnurag Suri v. Director General of GST IntelligenceIndo International Tobacco Ltd. v. Vivek PrasadK.T. Saidalavi v. State Tax OfficerRais Khan v. Addl. CommissionerM/s R.P. Buildcon Pvt. Ltd. v. Superintendent, CGSTTvl. Metal Trade Incorporation v. GST Council SecretariatVivek Narsaria v. State of JharkhandStalwart Alloys India Pvt. Ltd. v. Union of IndiaKundlas Loh Udyog v. State of H.P.Chief Commissioner of CGST v. Safari Retreats Pvt. Ltd.K.P. Mohammed Salim v. CIT | ||||
