Goods and Services Tax

Medical treatment and delayed GST appeals: sufficient cause without negligence or substantial prejudice can support a hearing on merits.
Case-Laws
GST
Condonation of delay in a statutory GST appeal may be supported by sufficient cause where a taxpayer is preoccupied with a daughter's medical treatment and the delay involves neither negligence nor wilful default. The absence of substantial prejudice or inconvenience to the respondents is relevant to allowing the appeal to be heard on merits. Restoration of an appeal rejected as time-barred permits the appellate authority to decide it in accordance with law without deciding the underlying tax dispute at the restoration stage.
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GST return discrepancies require prior scrutiny notice before demand proceedings, with writ review available for mandatory procedural breaches.
Case-Laws
GST
GST demands under Section 73 of the AGST Act based on discrepancies found during return scrutiny require prior communication in Form GST ASMT-10, giving the registered person an opportunity to explain or rectify them. Proceedings based on independently available information stand differently, subject to Section 73. Participation in subsequent proceedings does not waive the scrutiny safeguard. A statutory appeal does not preclude writ review where proceedings breach the mandatory procedure governing jurisdiction and the resulting order violates natural justice.
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GST appeal delay beyond the statutory condonable period may be condoned, with restoration subject to an additional deposit.
Case-Laws
GST
Condonation of delay beyond the statutory period in a GST appeal was followed by restoration for consideration on merits, subject to an additional deposit. The appeal had been dismissed solely for delay. Restoration required an additional deposit of 10% of the tax demand within two weeks. Disposal was directed within four weeks of the petitioner's first appearance, with all contentions on merits left open.
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GST cancellation appeals require reasoned decisions on merits, respecting binding judicial directions and the separate right to seek revocation.
Case-Laws
GST
GST registration cancellation appeals under Section 107 must be determined on merits by reasoned orders identifying the points for determination; lack of merit is not a ground for rejection at admission. A High Court direction to decide an appeal on merits binds the Appellate Authority unless set aside, modified or suspended. Alleged misrepresentation may be raised through review, recall or appeal, but cannot justify disregarding that direction. Seeking revocation of cancellation does not admit that cancellation was correct or bar an appeal. The Appellate Authority may conduct further inquiry and confirm, modify or annul cancellation, but cannot remit the matter to the proper officer.
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Input tax credit mismatches require proof of supplier tax payment, while fraud-based recovery needs evidence of deliberate evasion.
Case-Laws
GST
GSTR-2A mismatches do not, by themselves, establish wrongful input tax credit; supplier tax payment must be proved through prescribed certificates or other cogent evidence. Amended supplier entries and ledger extracts may support verification, while certificates cannot be rejected without identified defects or verification. Credit unsupported by proof of supplier payment remains inadmissible. Section 75(7) bars confirmation of a demand on grounds outside the show cause notice. Fraud-based recovery requires foundational facts establishing fraud, wilful misstatement or suppression with intent to evade tax; a detected discrepancy or missing defence evidence cannot establish those facts. Where the fraud charge fails, section 75(2) permits redetermination under section 73 within applicable time limits. Interest on inadmissible credit is payable only if the credit was utilised.
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Common credit reversal relief and supplier reporting errors require verified calculations and evidence supporting input tax credit claims.
Case-Laws
GST
Deletion of a common input tax credit reversal demand for taxable and exempt supplies requires recorded verification of asserted credit segregation, supported by turnover figures and common-credit calculations under Rule 42. Verification covers ledgers, stock registers and whether shared overheads, such as rent and logistics, have entered the taxable credit stream. Input tax credit missing from GSTR-2A because a supplier reported tax against an incorrect GSTIN may be allowed under Circular No. 183/15/2022-GST where its verification requirements and Section 16(2)(c) are met. Relevant evidence includes valid invoices, banking records establishing payment and a supplier's certificate confirming tax payment to the Government.
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GST registration restoration requires filing outstanding returns and paying tax, interest, penalties and late fees before seeking revocation
Case-Laws
GST
Revocation of GST registration cancellation for non-filing of returns requires outstanding returns to be furnished and tax due to be paid with interest, penalty and late fee before revocation is sought, under the proviso to Rule 23(1). These ancillary liabilities are substantive obligations, not procedural formalities. Section 79 provides the statutory mechanism for recovery of admitted tax arrears and ancillary dues and must be invoked and exhausted before seeking the Tribunal's discretionary assistance in collection. Payment of tax alone does not prevent recovery of outstanding interest and late fees.
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Unaccounted taxable goods can trigger confiscation proceedings without proof of intent to evade tax, subject to verified evidence.
Case-Laws
GST
Section 130(1)(ii) does not require intent to evade tax for failure to account for taxable goods, unlike clauses (i) and (iv). Failure to keep, maintain or update records of taxable goods satisfies its primary ingredient. The ingredients of each charged clause require examination against verified evidence, including statutory records and production logs. Precedents must be considered in light of material factual differences.
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Slaked lime classification survives physical mixing where chuna retains its essential character and does not become a food preparation.
Case-Laws
GST
Chuna in slurry and paste form is classifiable as slaked lime under tariff item 2522 20 00, attracting GST at 5%, where physical blending produces no new compound or article with a distinct name, character or use. Chapter 25's mixing exclusion is subject to a contextual exception, which can arise from the nature of the goods named in a heading. The test is whether further mixing preserves slaked lime or creates a different article. Slaked lime supplies the essential character despite the greater combined weight of water and fillers, and its specific heading prevails over the residual food preparations heading. Separate use with pan, supari or tobacco and an FSSAI licence do not establish food preparation classification where the goods are not consumed directly or after the contemplated processing and no foodstuff component is established.
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Anti-profiteering rectification cannot reopen GST inclusion, while welfare fund deposits require statutory conditions and genuine refund efforts.
Case-Laws
GST
Rule 31 confines rectification of anti-profiteering orders to patent clerical, arithmetical or factual mistakes and does not permit review of debatable findings. A subsequent decision in separate proceedings cannot establish an omission of material available when the original order was passed. Under Rule 133(3)(c), deposit in a Consumer Welfare Fund requires the eligible recipient not to claim the amount or to be unidentifiable; missing bank details alone are insufficient. Reasonable efforts to facilitate direct refunds must be documented. Qualifying deposits require applicable interest and allocation between Central and State Funds, or to the Central Fund alone if the State Fund is non-functional. GST paid to the Government does not itself discharge the obligation to pass on input tax credit benefits to homebuyers.
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SEZ input tax credit refunds cover input service distributor credits when no supplier can claim the refund.
Case-Laws
GST
SEZ recipients may claim refunds of unutilised input tax credit distributed by an input service distributor under Section 54 of the CGST Act and Rule 89 where no supplier can seek that refund. Such credit is distinct from excess tax paid, and recharacterisation requires documentary or legal support. Jurisdictional High Court interpretations bind authorities and tribunals within the State; a pending challenge does not suspend their operation without a stay. Circulars providing for manual processing because the portal lacked a refund module do not restrict substantive refund rights.
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Transit destination discrepancies do not automatically prove tax evasion, while recurring enforcement issues can bypass departmental appeal limits.
Case-Laws
GST
A change in the declared destination of goods does not automatically establish an intention to evade tax for a transit penalty under Section 129 of the UPGST Act, 2017. Liability must be assessed against the contravention, surrounding circumstances and supporting evidence, including traffic restrictions, invoices, e-way bills and banking transactions. Producing sale documents for the first time on appeal does not by itself make the transaction non-genuine; nor does the supplier's lack of a branch at the changed destination. Recurring issues, including questions about mobile-squad enforcement jurisdiction, fall outside the prescribed monetary limits for departmental GST appeals under paragraph 4 of Circular No. 207/01/2024-GST.
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Bail for alleged fraudulent GST credits depends on trial delay, completed investigation and risks justifying continued detention
Case-Laws
GST
Pre-trial detention in GST prosecutions for alleged fraudulent input tax credit secures attendance at trial rather than serving as punishment. Even where a prima facie case exists, continued custody must be reasonable in light of personal liberty, the presumption of innocence and the likely duration of trial. Completion of the investigation, absence of criminal antecedents and lack of demonstrated risks of absconding, interference with evidence or witness intimidation are relevant to whether continued detention is justified. Bail may be subject to a personal bond, sureties and other conditions, with cancellation sought for a breach.
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Separate GST penalties against partners may face interim restraint where firms already face proceedings over the same input tax credit.
Case-Laws
GST
Separate GST penalty proceedings under Section 122(1)(A) against a partner for input tax credit allegedly wrongly availed by the partnership firm may attract interim protection where the firm already faces recovery and penalty proceedings for the same benefit. A prima facie assessment that separate proceedings appear unnecessary does not finally determine their validity. Interim protection may restrain further action under the partner's show-cause notice until the next returnable date, pending consideration of the writ petition and interim relief.
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GST appeal limitation runs in calendar months, not a fixed day count, when calculating statutory deadlines.
Case-Laws
GST
GST appeal limitation under Sections 107(1) and 107(4) of the CGST Act is computed in calendar months, not as a fixed aggregate of 120 days. The initial three-month period and the further one-month period retain their calendar-month character; the latter is not prescribed as 30 days. Mechanically treating four months as 120 days can therefore wrongly classify a timely appeal as delayed.
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GST registration cancellation for non-deposit of input tax credit is unjustified where returns are regularly filed; recovery procedures apply.
Case-Laws
GST
Non-deposit of input tax credit should be addressed through recovery under Sections 73 and 74 of the CGST Act, 2017, rather than cancellation of GST registration. Where returns have been regularly filed, cancellation on that basis is unjustified and does not follow the prescribed legal procedure. Revocation of the cancellation is to be allowed in accordance with law. A show-cause notice may still be issued for any other violation, following the prescribed procedure.
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Transitional CENVAT credit carried forward through TRAN-1 does not by itself permit CGST recovery proceedings to determine pre-GST admissibility.
Case-Laws
GST
Section 73 of the CGST Act, 2017 cannot be used to determine the admissibility of CENVAT credit under the erstwhile law merely because the credit was transitioned through TRAN-1. Proceedings concerning contraventions of the earlier enactments remain preserved under the repeal-and-saving provision. An assertion that a dispute concerns statutory verification of transitional credit does not, without more, establish a distinguishing legal issue. Recovery proceedings based on such an invocation of section 73 lack subject-matter jurisdiction.
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Transitional tax credit for eligible dealers survives incorrect form entries, while previously available eligibility objections cannot be raised on appeal.
Case-Laws
GST
Entering a transitional input tax credit claim in the wrong table of Form GST TRAN-1 is a technical error that does not defeat substantive entitlement where the taxpayer is otherwise eligible. Principles analogous to constructive res judicata bar a fresh eligibility objection in appeal where the ground was available earlier but the notice and adjudication relied solely on the incorrect table entry. Under section 107(11) of the CGST Act, further appellate inquiry is discretionary when necessary on the facts, rather than mandatory in every appeal.
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Input tax credit allocated to the wrong tax head may be a technical error where no revenue loss arises.
Case-Laws
GST
Eligible IGST credit inadvertently availed and utilised as CGST and SGST may be treated as a technical allocation error rather than wrongful availment or utilisation under section 73, where no revenue loss arises. This approach treats the electronic credit ledger as a unified source of credit. Section 16(5), through its overriding clause, displaces the time-limit restriction in section 16(4) for credit within its scope, removing the basis for reversal on that ground.
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Input tax credit apportionment for banks and financial institutions turns on eligible registrations, same-PAN supplies and reporting rules.
Circulars
GST – States
Under section 17(4) of the West Bengal GST Act, banking companies and financial institutions, including non-banking financial companies, may opt to claim 50% of eligible input tax credit (ITC) through registrations supplying deposit, loan or advance services. Once one eligible registration opts in, all such registrations must comply; registrations not supplying those services cannot opt in. The exception to the 50% limit for same-PAN supplies applies only where both registrations have opted in. In GSTR-3B, non-business and blocked credit, and the balance after applying the 50% rule, must be permanently reversed. Temporarily ineligible credit may be reversed and reclaimed when conditions are met, subject to the statutory time limit. Where the invoice management system applies, invoices with currently ineligible credit that may become eligible must be kept pending. Different past reporting methods should not attract adverse treatment if the ITC claimed conforms to these principles.
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Demo vehicle input tax credit extends to authorised agents despite manufacturers selling vehicles directly to customers.
Circulars
GST – States
Input tax credit on demo vehicles is not blocked under section 17(5)(a) of the West Bengal Goods and Services Tax Act for authorised dealers operating under the dealer-agency model, even though manufacturers sell new vehicles directly to customers. The reference to “such motor vehicles” covers demo vehicles used to further the supply of similar vehicles, not only the specific vehicle sold. Demo vehicles serve the same purpose under the dealer-agency and traditional dealership models, and credit is not blocked under that provision in either model. The earlier clarification denying credit to dealers acting as agents or service providers is withdrawn.
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GST show-cause replies must precede personal hearings, with same-day scheduling irregular in input tax credit adjudication.
Case-Laws
GST
In GST adjudication, the date for submitting a reply to a show-cause notice must precede the personal hearing; fixing both for the same date is a procedural irregularity. A consent-based remand concerning disallowed input tax credit required fresh adjudication after a reply and subsequent hearing, conditional on timely deposit of costs. The adjudication and appellate orders were set aside, the merits remained open, and the consent-based direction was not a precedent.
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Interim protection in GST investigations involving serious criminal allegations depends on case diary review and hearing the State.
Case-Laws
GST
Where an investigation concerns alleged GST offences alongside cognizable and non-bailable BNS offences potentially punishable by life imprisonment, an objective assessment under Section 528 of the BNSS requires examination of the case diary to determine whether continuing the investigation would cause a serious miscarriage of justice. Granting even temporary prohibitory relief without considering that material and giving the State an opportunity to be heard would itself occasion a miscarriage of justice.
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Self-assessed GST is not excluded from interest waiver in tax proceedings, while approved waivers face revocation limits.
Case-Laws
GST
Self-assessed GST is not excluded from the interest waiver under Section 128A once proceedings under Section 73 are initiated. This position is relevant where self-assessed tax was paid belatedly, GSTR-3B was filed late, and the tax liability has been discharged. An approval issued in Form GST SPL-05 cannot subsequently be declared void outside the scope of Rule 164(16) or (17).
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Service tax appeal pre-deposit refunds escape GST limitation and unjust enrichment despite mistaken payment through Form DRC-03.
Case-Laws
GST
Refund of a service tax appeal pre-deposit mistakenly paid through Form DRC-03 falls outside the CGST Act because the amount is not GST. The general provisions of the Limitation Act, rather than the two-year refund limitation under section 54 of the CGST Act, govern its refund. A statutory pre-deposit under section 35F of the Central Excise Act is made to exercise the right of appeal, not to pay duty; its refund is therefore not subject to unjust enrichment.
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