The petitioners challenged a show cause notice under Section 74 alleging wrongful availment of ITC on the basis that suppliers were non-existent or subsequently deregistered. The factual background showed that all statutory conditions under Section 16 were fulfilled and no proceedings were initiated against suppliers.The Court held that ITC cannot be denied to the recipient without first initiating action against defaulting suppliers, unless exceptional circumstances exist. The impugned show cause notice was set aside.
Jyoti Tar Products Pvt. Ltd. & Anr. vs Deputy Commissioner, State Tax & Ors. 13-12-2024
The petitioners challenged a show cause notice under Section 74 alleging wrongful availment of ITC on the basis that suppliers were non-existent or subsequently deregistered. The factual background showed that all statutory conditions under Section 16 were fulfilled and no proceedings were initiated against suppliers.The Court held that ITC cannot be denied to the recipient without first initiating action against defaulting suppliers, unless exceptional circumstances exist. The impugned show cause notice was set aside.
The petitioner challenged initiation of proceedings under Section 74 after scrutiny proceedings under Section 61 had already been dropped. The factual background showed that the reply to scrutiny notice was accepted and proceedings were concluded, yet a subsequent show cause notice was issued on the same allegations.The Court held that once proceedings under Section 61 are concluded by accepting the explanation, initiation of proceedings under Section 74 on identical grounds is impermissible. The impugned order was set aside.
M/s MAG Filters and Equipments Pvt. Ltd. vs Commissioner & Ors. 11-12-2024
The petitioner challenged initiation of proceedings under Section 74 after scrutiny proceedings under Section 61 had already been dropped. The factual background showed that the reply to scrutiny notice was accepted and proceedings were concluded, yet a subsequent show cause notice was issued on the same allegations.The Court held that once proceedings under Section 61 are concluded by accepting the explanation, initiation of proceedings under Section 74 on identical grounds is impermissible. The impugned order was set aside.
The petitioner challenged blocking of the electronic credit ledger despite nil credit balance, along with issuance of ASMT-10 notice by State authorities. The factual background showed parallel proceedings by Central authorities on the same issue of alleged wrongful ITC availment.The Court held that Rule 86A does not permit negative blocking of credit where no balance exists. It further held that simultaneous proceedings by State authorities were impermissible when Central authorities had already initiated action. The blocking orders and ASMT-10 notice were quashed.
The petitioner challenged blocking of the electronic credit ledger despite nil credit balance, along with issuance of ASMT-10 notice by State authorities. The factual background showed parallel proceedings by Central authorities on the same issue of alleged wrongful ITC availment.The Court held that Rule 86A does not permit negative blocking of credit where no balance exists. It further held that simultaneous proceedings by State authorities were impermissible when Central authorities had already initiated action. The blocking orders and ASMT-10 notice were quashed.
The petitioner challenged rejection of its SVLDR Scheme application on the ground that quantification occurred after the cut-off date. The factual background showed that service tax liability was admitted during investigation prior to the cut-off date, though a higher figure was mentioned later in the show cause notice.The Court held that benefit of the Scheme cannot be denied merely because a higher figure was mentioned by way of abundant caution. Since liability stood quantified before the cut-off date, rejection of the application was unsustainable. The rejection order was quashed.
Kuber Health Food and Allied Services Pvt. Ltd. vs Union of India & Ors. 22-11-2024
The petitioner challenged rejection of its SVLDR Scheme application on the ground that quantification occurred after the cut-off date. The factual background showed that service tax liability was admitted during investigation prior to the cut-off date, though a higher figure was mentioned later in the show cause notice.The Court held that benefit of the Scheme cannot be denied merely because a higher figure was mentioned by way of abundant caution. Since liability stood quantified before the cut-off date, rejection of the application was unsustainable. The rejection order was quashed.
The petitioner challenged assessment orders and subsequent rectification orders for two assessment years on the ground that the original show cause notice was vague and lacked specific allegations. The factual background showed that detailed replies had been filed by the petitioner pursuant to the notices and the assessments were completed thereafter.The Court held that where a detailed reply is submitted and considered, the assessment cannot be set aside merely on the ground that the show cause notice was vague. Since the impugned orders were passed after considering the petitioner’s explanations, no interference was warranted. The writ petitions were dismissed.
The petitioner challenged assessment orders and subsequent rectification orders for two assessment years on the ground that the original show cause notice was vague and lacked specific allegations. The factual background showed that detailed replies had been filed by the petitioner pursuant to the notices and the assessments were completed thereafter.The Court held that where a detailed reply is submitted and considered, the assessment cannot be set aside merely on the ground that the show cause notice was vague. Since the impugned orders were passed after considering the petitioner’s explanations, no interference was warranted. The writ petitions were dismissed.
The petitioner challenged cancellation of GST registration on the ground that the show cause notice was vague and did not disclose any specific reasons warranting cancellation. The factual background showed that the notice merely contained a standard template allegation without reference to any concrete violation, and no effective opportunity of hearing was granted before passing the cancellation order.The Court held that cancellation of registration has serious civil consequences and must be preceded by a valid show cause notice disclosing clear reasons. Mechanical cancellation without application of mind and without granting opportunity of hearing violates principles of natural justice. The impugned cancellation order was set aside with liberty to the department to proceed afresh in accordance with law.
The petitioner challenged cancellation of GST registration on the ground that the show cause notice was vague and did not disclose any specific reasons warranting cancellation. The factual background showed that the notice merely contained a standard template allegation without reference to any concrete violation, and no effective opportunity of hearing was granted before passing the cancellation order.The Court held that cancellation of registration has serious civil consequences and must be preceded by a valid show cause notice disclosing clear reasons. Mechanical cancellation without application of mind and without granting opportunity of hearing violates principles of natural justice. The impugned cancellation order was set aside with liberty to the department to proceed afresh in accordance with law.
The petitioner challenged a show cause notice and final order issued in the name of a company that had ceased to exist due to an approved scheme of amalgamation. The factual background showed that the amalgamation was approved by the NCLT, and the authorities were duly informed. Despite this, GST proceedings were initiated and concluded in the name of the amalgamating company.The Court held that once an entity ceases to exist in law, any proceedings initiated or continued in its name are void and unenforceable. Since the department was aware of the amalgamation, issuance of notices and orders in the name of the amalgamating company was impermissible. The impugned show cause notice and final order were quashed.
HCL Infosystems Ltd. vs Commissioner of State Tax & Anr. 21-11-2024
The petitioner challenged a show cause notice and final order issued in the name of a company that had ceased to exist due to an approved scheme of amalgamation. The factual background showed that the amalgamation was approved by the NCLT, and the authorities were duly informed. Despite this, GST proceedings were initiated and concluded in the name of the amalgamating company.The Court held that once an entity ceases to exist in law, any proceedings initiated or continued in its name are void and unenforceable. Since the department was aware of the amalgamation, issuance of notices and orders in the name of the amalgamating company was impermissible. The impugned show cause notice and final order were quashed.
The petitioner challenged initiation of audit proceedings under Section 65 after cancellation of GST registration. The factual background showed that no tax liability survived post-cancellation.The Court held that audit under Section 65 can be conducted only against a registered person. Once registration stands cancelled and no dues remain, audit proceedings are without jurisdiction. The audit notice and findings were quashed.
LJ-Victoria Properties Pvt. Ltd. vs Union of India & Ors. 19-11-2024
The petitioner challenged initiation of audit proceedings under Section 65 after cancellation of GST registration. The factual background showed that no tax liability survived post-cancellation.The Court held that audit under Section 65 can be conducted only against a registered person. Once registration stands cancelled and no dues remain, audit proceedings are without jurisdiction. The audit notice and findings were quashed.
The petitioner consortium challenged levy of GST on advances received for execution of a large infrastructure project and the consequential denial of input tax credit on such advances. The factual background showed that the advances were in the nature of interest-free loans repayable through deductions from running bills, yet GST was levied at the time of receipt.The Court examined the statutory scheme relating to time of supply, definition of supply, and eligibility of ITC. It held that levy of GST on advances while simultaneously denying ITC creates serious anomalies within the GST framework. The Court granted relief to the petitioner by recognising the inconsistency in taxing advances without permitting corresponding credit and directed appropriate relief in accordance with law.
L & T IHI Consortium vs Union of India & Ors. 14-11-2024
The petitioner consortium challenged levy of GST on advances received for execution of a large infrastructure project and the consequential denial of input tax credit on such advances. The factual background showed that the advances were in the nature of interest-free loans repayable through deductions from running bills, yet GST was levied at the time of receipt.The Court examined the statutory scheme relating to time of supply, definition of supply, and eligibility of ITC. It held that levy of GST on advances while simultaneously denying ITC creates serious anomalies within the GST framework. The Court granted relief to the petitioner by recognising the inconsistency in taxing advances without permitting corresponding credit and directed appropriate relief in accordance with law.
The petitioner sought interest on delayed refund of IGST paid on export of goods. The factual background showed that refunds were withheld on account of the petitioner being flagged as a “risky exporter” and were granted after substantial delay.The Court held that mere red-flagging without timely completion of investigation cannot justify withholding of refund beyond the statutory period. Interest under Section 56 of the CGST Act was held to be payable from the expiry of sixty days from the date of application. Directions were issued accordingly.
Ms. Anita Agarwal vs Union of India & Ors. 14-11-2024
The petitioner sought interest on delayed refund of IGST paid on export of goods. The factual background showed that refunds were withheld on account of the petitioner being flagged as a “risky exporter” and were granted after substantial delay.The Court held that mere red-flagging without timely completion of investigation cannot justify withholding of refund beyond the statutory period. Interest under Section 56 of the CGST Act was held to be payable from the expiry of sixty days from the date of application. Directions were issued accordingly.
