Goods and Services Tax

Contractual arbitration scope excludes GST reimbursement claims, requiring writ petitions to receive merits consideration despite an arbitration agreement.
Case-Laws
GST
Contractual GST reimbursement claims under Clause 2.14.A were treated as outside the scope of the arbitration clause. Availability of an arbitration agreement therefore did not justify refusing to entertain a writ petition seeking refund of the GST element. Competing interpretations of the contractual tax-reimbursement clause, together with all questions of law and fact concerning entitlement, remained open for merits determination. The High Court's dismissal orders were set aside, and the writ and review petitions were restored for adjudication in accordance with law.
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Retrospective GST registration cancellation beyond the show-cause notice scope was set aside for fresh adjudication.
Case-Laws
GST
Retrospective cancellation of GST registration cannot be imposed where the show-cause notice alleges non-operation from the declared place of business but does not propose cancellation for an earlier period. Such cancellation exceeds the scope of the notice. Where registration was previously restored for the relevant period after acceptance of the taxpayer's explanation, that circumstance further supports reconsideration. The cancellation was set aside, registration revived, and the notice remitted for fresh adjudication upon submission of a reply and supporting material, subject to costs.
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Contractual tax reimbursement under government works contracts cannot be denied where payment evidence is undisputed.
Case-Laws
GST
Clause 42.1 requires the department to reimburse Central and State sales and other taxes paid by a works contractor upon proof of payment. Undisputed GSTR-3B forms establish payment of CGST and SGST for this purpose. Denial of reimbursement despite such proof is arbitrary, illegal and inconsistent with Article 14, since governmental authorities must act fairly and without arbitrariness in contractual dealings. Reimbursement of the documented CGST and SGST payments is required, with interest at 12% per annum from the respective tax-payment dates.
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Condonation of delay restores GST registration cancellation appeal for merits review where tax computation remains unadjudicated.
Case-Laws
GST
Delay in a statutory appeal against cancellation of GST registration was condoned where the appeal had been rejected solely as time-barred and the tax computation remained unadjudicated. Applying the cited precedent, the appellate remedy was restored to enable merits determination after hearing both sides. The appeal was revived, and the appellate authority was directed to decide the registration-cancellation dispute in accordance with law.
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Anti-profiteering obligations: reduced post-GST input tax credit ratio meant no additional credit benefit requiring price reduction.
Case-Laws
GST
Anti-profiteering obligations in construction services require a commensurate price reduction only where implementation of GST yields an additional input tax credit benefit. Recalculation based on actual savings against total procurement showed that the post-GST input tax credit ratio had declined rather than increased. No additional credit benefit accrued to the construction-service supplier, so purchasers were not entitled to a corresponding price reduction. The re-investigation report was accepted, and no contravention of the statutory anti-profiteering obligation was established.
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Pre-decisional notice and hearing under GST refund rules are mandatory; appellate review cannot cure their absence.
Case-Laws
GST
Rule 92(3) requires Form GST RFD-08 notice, consideration of the refund applicant's reply, and a pre-decisional hearing before accumulated input tax credit refunds may be wholly or partly rejected. These safeguards identify the alleged input tax credit mismatch and permit a specific response. An appellate hearing cannot replace those mandatory steps. Refund rejections issued without them are void from inception and require fresh processing, with substantive eligibility issues remaining open.
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SUV ground-clearance classification applies unladen delivery-state measurements, sustaining higher Compensation Cess and extended recovery for suppressed short-payment.
Case-Laws
GST
SUV Compensation Cess classification requires cumulative satisfaction of the prescribed conditions. Ground clearance is measured in the vehicle's unladen delivery state; the later express definition of unladen clearance applies prospectively but confirms that the earlier entry did not require measurement in a laden condition. Manufacturer specifications are relevant evidence, while ARAI certification is relevant technical material but is neither conclusive nor wholly excludable for classification. Hyundai Creta, Alcazar and Tucson were classified under the higher Compensation Cess entry, sustaining differential cess. Suppression of facts with intent to evade tax was established, permitting extended recovery of short-paid cess with consequential interest and penalties.
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Common Input Tax Credit Apportionment Requires Identifying the Actual Common Credit Pool Before Proportional Reversal
Case-Laws
GST
Net input tax credit verification must consider reversals reported in GSTR-3B; gross differences between GSTR-3B and GSTR-2A alone do not establish excess credit. Output-tax variances between GSTR-9 and GSTR-9C require examination of the reconciliation statement, sales ledgers, invoices and financial records, rather than a portal-field comparison. For Rules 42 and 43, proportional reversal relating to exempt supplies requires segregation of actual common credit from specific credit and application of the exempt-to-taxable turnover ratio only to that common-credit pool. The demands were set aside and remanded for fresh verification and de novo adjudication.
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Post-supply discounts do not automatically reduce recipients' output tax, and fresh assessment must stay within notice allegations.
Case-Laws
GST
Post-supply discounts under section 15(3) regulate exclusion from the supplier's taxable value; they do not automatically permit a recipient to reduce its own outward taxable turnover or output tax liability. Their treatment requires examination of credit notes, invoice linkage, prior agreement, the supplier's return treatment, and the recipient's input tax credit position. Mere disclosure in GSTR-9C cannot alone support an output-tax demand without proof of an actual reduction in outward turnover or tax liability. Appellate and adjudication orders were set aside for fresh inquiry, confined to allegations in the existing show cause notice; a new claim that incentives were consideration for promotional services could not be introduced at the appellate stage.
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Unchallenged advance rulings bind revenue; circulars cannot create GST levies or sustain refund recovery claims.
Case-Laws
GST
Unchallenged advance rulings bind the applicant and jurisdictional officer unless appealed, rectified, or declared void; a belated jurisdictional objection cannot be used in appellate proceedings to examine the ruling where statutory challenge mechanisms were not invoked. A departmental circular cannot impose GST or fix an 18% rate contrary to the applicable rate notification, nor retrospectively displace a subsisting ruling. Recovery of refunds as erroneous solely on that circular was unsustainable. Refund demands also cannot rest on grounds outside the show cause notice; where the recipient bore the tax incidence, submitted the prescribed certificate, and reversed input tax credit, objections based on supplier-only entitlement and unjust enrichment failed. Recovery, interest, and penalty were set aside.
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Appellate jurisdiction in GST advance rulings excludes classification claims based on materially altered products and fresh evidence.
Case-Laws
GST
AAAR appellate jurisdiction over a GST advance ruling is confined to the ruling challenged and the factual matrix examined by the original advance-ruling authority. A subsequently presented soap product, revised packaging and a fresh test report could not support appellate determination where they lacked a documented link to the original product and materially differed in appearance, description and packaging. Classification of the later product would require an original examination of its composition, specifications, labelling, intended use and commercial identity. The appeal was rejected without deciding the merits of the original classification ruling, leaving the later product's classification and tax treatment to available legal remedies.
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Project-wise anti-profiteering permits purchase-value credit analysis, but requires area-based allocation and excludes unavailed pre-GST credits.
Notes
GST
Project-wise anti-profiteering calculations in real estate may quantify additional GST input tax credit against project purchase value, provided the aggregate saving is allocated across total project area on a per-square-foot basis rather than linked to buyer collections or turnover. This complies with Section 171's commensurate-price requirement because construction expenditure and credit accrual may not track receipts. A pre-GST CENVAT offset requires evidence of actual availment; theoretical but unclaimed eligibility does not reduce the GST-period benefit. GST collected on consideration inflated by an undistributed benefit forms part of the amount returnable to purchasers, separately from interest for delayed return. Evidence must distinguish principal benefit, GST and interest.
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Section 74 show-cause notices require material allegations of fraud or suppression; bare invocation cannot sustain extended limitation.
Case-Laws
GST
Section 74 of the CGST Act requires a show-cause notice invoking extended limitation to set out specific allegations and material supporting fraud, wilful misstatement, or suppression of facts to evade tax. Its invocation solely to keep a demand within limitation, without those particulars or prima facie material, is insufficient. The impugned notice and consequential proceedings were quashed, without barring issuance of a fresh notice that complies with Section 74.
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GST penalty adjudication jurisdiction: a Joint Commissioner's order remained valid despite challenge, while other appellate grounds remained open.
Case-Laws
GST
GST penalty adjudication by a Joint Commissioner fell within the proper officer's relevant monetary jurisdiction. Although the circular invoked to support that position was issued after the show-cause notice and order-in-original, it indicated that a Joint Commissioner was competent for such matters. Section 160 of the CGST Act prevented invalidation of the proceedings solely for the alleged jurisdictional defect. The jurisdictional challenge failed, while all remaining grounds were left for determination through the statutory appellate remedy.
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Section 74 proceedings require audit-based material supporting wilful suppression, while statutory appeals generally displace writ review of merits.
Case-Laws
GST
Section 74 proceedings for audit-detected GST non-payment or short payment require the proper officer to identify the applicable statutory provision and disclose material supporting satisfaction regarding wilful suppression. A show-cause notice may rely on audit findings, the final audit report and allegations that defaults would otherwise have remained undetected; sufficiency of that satisfaction is not ordinarily examined in writ jurisdiction. Where the notice discloses no jurisdictional error or non-application of mind, an efficacious statutory appeal generally precludes writ review of the merits of an order-in-original. Merits may instead be pursued through the statutory appellate remedy.
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GST Order Communication Determines Appeal Limitation Where Improper Portal Upload Denies Effective Notice and Requires Reasoned Delay Consideration
Case-Laws
GST
GST appellate limitation depends on effective communication of the adjudication order, requiring actual or constructive knowledge sufficient to pursue an appeal. Portal upload in an “Additional Notices and Orders” tab, where adjudication orders need not be posted, may not constitute communication merely because registered persons use the portal for returns and tax payments. A breach of natural justice may support writ jurisdiction despite an alternative Tribunal remedy. The appellate authority must give reasons when rejecting a delay explanation; merits remain to be determined after a personal hearing.
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Effective GST notice service requires alternative delivery after repeated non-response before ex parte assessment may proceed.
Case-Laws
GST
Effective service of GST notices requires more than portal upload where repeated electronic communications receive no response. Although portal upload is a statutorily sufficient service mode, the proper officer should consider alternative prescribed modes, preferably registered post, to ensure actual notice. Proceeding ex parte without effective service and a meaningful personal hearing is an empty formality. The assessment was set aside and remanded for fresh adjudication, conditional on payment of the stipulated disputed-tax portion, objections, and clear notice of personal hearing.
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Extended input tax credit limitation permits qualifying delayed claims when returns were filed within the statutory extended period.
Case-Laws
GST
Section 16(5) of the CGST Act applies retrospectively notwithstanding Section 16(4), allowing input tax credit for specified financial years where the relevant return was filed by 30 November 2021. Claims satisfying that extended filing condition are not barred by the earlier limitation. The relief addresses denial solely on limitation; allegations involving erroneous, excess, discrepant, or fake input tax credit remain subject to action under applicable law.
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Transitional refund eligibility for reverse-charge tax on external borrowings survives absent assessment or adjudication proceedings.
Case-Laws
GST
Section 142(8)(a) of the CGST Act bars a transitional refund only where service tax becomes recoverable through assessment or adjudication proceedings. An information inquiry, voluntary payment, and closure of investigation do not by themselves create a statutory recovery. Service tax paid under reverse charge on external commercial borrowings after the GST transition therefore remains eligible for consideration as a refund under section 142(3), read with the applicable saving provision, where no assessment or adjudication was instituted. The appellate and Tribunal orders rejecting the claim were quashed, and the refund was remitted for processing under section 142(3).
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Portal-only GST order service may not trigger appeal limitation when authorities know the taxpayer ceased manufacturing.
Case-Laws
GST
GST adjudication orders served solely through the common portal may not amount to constructive notice where the Department knows that the registered person has ceased manufacturing. Although prescribed service modes offer a choice, that choice must be exercised fairly and reasonably; email, speed post or registered post should also be used in those circumstances. Limitation for a statutory appeal begins when the person obtains knowledge of the order, rather than on portal upload alone. The delay was condoned, the appellate refusal was set aside, and the appeal was restored for merits adjudication, with directions for non-portal communication of the resulting order.
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Input tax credit reversal requires review of reconciliations and disclosed grounds before fresh verification of stock transfers.
Case-Laws
GST
Input tax credit reversal on stock transfers requires verification of reconciliations, Form WW and Chartered Accountant certification supporting inter-State purchase claims. Annexures supplied in replies, appeal materials and fuller reconciliation may constitute supporting records. A reversal cannot rest on an objection, such as lack of proof of manufacture outside the State, that was absent from the show-cause notices. The input tax credit reversal issue was remanded for fresh verification after hearing the assessee, who may provide additional particulars; merits remained undecided.
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Statutory show cause notice service is mandatory; assessment based solely on an accompanying summary cannot stand.
Case-Laws
GST
Service of a statutory show cause notice under section 73 is mandatory; the notice must state the reasons for initiating proceedings. Rule 142 requires the statutory notice to be accompanied by a prescribed summary, but the summary cannot substitute for service of the notice itself. Where only the summary was served, the mandatory notice procedure was not complied with. The summary notice and assessment founded solely on it were quashed, while the competent authority retained liberty to issue a fresh statutory notice with its summary and proceed in accordance with law.
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Mandatory appeal documents and pre-deposit proof: registration was refused after defects remained uncured despite repeated opportunities.
Case-Laws
GST
GST appellate appeal registration requires copies of the show cause notice and order-in-original, together with proof of the prescribed pre-deposit. Where these mandatory documents are absent, pre-deposit proof is neither uploaded nor reflected on the portal, and notified defects remain uncured despite repeated opportunities, the Registrar may decline registration under the prescribed procedure. The appeal form was rejected for failure to furnish the required documents and pre-deposit proof or respond to the defect notices.
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GST extended recovery notices require pleaded foundational facts of fraud, misrepresentation, or suppression; statutory recitals alone are insufficient.
Case-Laws
GST
GST extended recovery proceedings for short payment of tax on outward supplies require foundational facts showing that the short payment resulted from fraud, wilful misrepresentation or suppression. A show cause notice must disclose those facts and demonstrate application of mind; merely reproducing statutory expressions is insufficient. Where the notice neither states foundational facts nor alleges fraud, wilful misrepresentation or suppression, invocation of the extended recovery provision is invalid. Consequential proceedings and orders founded on such a defective notice are illegal, arbitrary and without jurisdiction.
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Transit-State GST Jurisdiction: Verification remains permissible, but external inter-State supplies lack a local detention-penalty nexus.
Notes
GST
GST transit-state jurisdiction permits interception, document verification and authorised physical inspection of inter-State consignments, but physical passage through an intermediate State does not itself establish a place of supply, tax liability or penalty jurisdiction. Section 129 detention and penalty require contravention linked to a taxable nexus; where documented origin and destination are outside the transit State and there is no diversion, local supply, false documentation or mismatch of goods, an e-invoice defect alone should be addressed by authorities connected with the supplier or recipient. Cross-empowerment under the CGST and IGST regimes facilitates administration but does not create independent territorial taxing authority. Discrepancies may be recorded and communicated to competent jurisdiction.
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