Goods and Services Tax

Cash seizure under GST searches requires statutory authority; unlawful retention may require restitutionary interest and return.
Notes
GST
Section 67 limits GST search-and-seizure powers to confiscable goods and documents, books or things useful or relevant to proceedings. Currency is excluded from goods and, under a contextual ejusdem generis reading, ordinarily cannot be retained as a thing merely because its source is questioned. Seizure and continued retention require recorded reasons, compliance with prescribed seizure procedures, and observance of statutory return periods. Recovery powers cannot be used at the search stage to secure a prospective demand. Where cash is taken without lawful authority, return of the principal does not cure the deprivation; accrued interest may be payable as restitution, distinct from delayed-refund interest.
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Appellate-order refund limitation may use delayed portal upload date, preserving timely claims and triggering interest for non-payment.
Case-Laws
GST
Refund limitation following an appellate order setting aside a tax and penalty demand may, in exceptional circumstances, run from the belated portal upload of Form GST APL-04 rather than physical communication of the order. Although physical communication ordinarily constitutes the relevant date and the refund form does not require awaiting portal upload, treating the later upload date as relevant preserved express appellate refund relief where the application was filed immediately thereafter. The refund rejection was quashed and processing directed. Interest was payable at 6% from the court-fixed date until payment, rising to 9% if directions remained unimplemented after the stipulated period.
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Overlapping input tax credit demands require consideration of the statutory bar before adjudication and may require fresh proceedings.
Case-Laws
GST
Overlapping input tax credit demands must be assessed after considering the objection that parallel Central GST proceedings invoke the statutory bar under section 6(2)(b) of the CGST/MGST Act. The High Court set aside an order denying input tax credit because that objection had not been examined on merits, and remanded the show-cause proceedings for fresh adjudication with all merits kept open.
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Assignment of GIDC leasehold rights falls outside GST supply, defeating blocked-credit recovery and fraud-based allegations.
Case-Laws
GST
Assignment of GIDC industrial-plot leasehold rights is treated as a transfer of benefits arising from immovable property rather than a GST-taxable supply. Input tax credit restrictions for construction of immovable property apply only where goods or services are received for construction; they do not apply where the recipient undertook no construction. Consequently, credit claimed on acquiring such leasehold rights was not blocked. Fraud, wilful misstatement, or suppression could not be invoked for recovery on the contrary premise, particularly where GST collected on the onward assignment had been deposited. The recovery show-cause notices were quashed and the writ petitions succeeded.
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Personal hearing rights in GST adjudication survive an inadvertent form selection and require fresh determination.
Case-Laws
GST
Specific written request for a personal hearing in a reply to a GST show-cause notice cannot be disregarded solely because the noticee inadvertently selected “No” in the relevant form. Such an erroneous selection does not amount to an express waiver of the right to be heard where the written reply clearly seeks a hearing. Denial of the requested hearing breaches principles of natural justice. The adjudication order was therefore quashed, and the adjudicating officer was directed to grant a personal hearing and determine the show-cause notice afresh in accordance with law.
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GST audit commencement follows the later statutory event, preserving timely audit reports where record availability remains disputed.
Case-Laws
GST
Under the Explanation to Section 65(4), a GST audit commences on the later of the date records are made available and the date audit is actually instituted at the registered person's place of business. Where complete furnishing of required records is disputed, the asserted furnishing date need not govern commencement; actual institution supplies an alternative statutory basis. Although outstanding documents should be identified within a reasonable time, failure to do so after repeated notices does not override the later-event rule. The audit report was treated as prepared within the three-month period, and challenges to show-cause notices were left to statutory responses and remedies.
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Intra-court appellate restraint preserves statutory GST remedies unless the Single Judge's referral order is demonstrably erroneous or perverse.
Case-Laws
GST
Intra-court appellate interference with a Single Judge's order is confined to demonstrable error or perversity; the availability of another possible view does not suffice. In GST registration-cancellation matters, where a Single Judge relegates an appellant to the statutory appellate remedy for failing to invoke it, that direction should stand if supported by cogent reasons and free from perversity. Substantive contentions remain open before the appellate authority, and a timely statutory appeal must be considered on merits without treating it as delayed.
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Composite GST notices across tax periods breach separate limitation requirements, permitting fresh period-compliant proceedings where lawfully available.
Case-Laws
GST
Composite show cause notices under Section 74 of the CGST Act cannot combine several financial years or tax periods with separate assessment, return, demand and limitation timelines. Each period must be assessed independently because aggregation obscures distinct due dates and statutory limitation requirements. In-limine dismissal of a special leave petition against a contrary High Court view does not trigger the doctrine of merger or displace later decisions binding on tax authorities. Non-compliant composite notices and consequential orders are subject to quashing, while fresh period-specific notices may be issued in accordance with law, subject to other legal impediments.
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Project-specific ITC benefit calculations may use credit-to-purchase-value data, with GST on excess realisation included in anti-profiteering amounts.
Case-Laws
GST
Project-specific anti-profiteering computation may compare pre-GST credit and post-GST input tax credit with corresponding project purchase values, rather than turnover, to quantify the benefit allocable per square foot to eligible homebuyers. Pre-GST purchase and credit data may remain relevant where records establish a project nexus, notwithstanding formal post-GST commencement of construction. Total project area and eligible sold area must support a reconciled allocation of the project-level benefit. GST collected on excess realisation arising from profiteering forms part of the amount to be passed on. Penalty may apply for contraventions occurring after the penal provision commenced, subject to statutory immunity where the profiteered amount is deposited within the prescribed period.
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Excess IGST Refund: Double payment caused by GSTR-3B misclassification requires verification and may support a separate excess-tax claim.
Notes
GST
Exported goods are zero-rated, but incorrect classification of IGST in the non-zero-rated field of FORM GSTR-3B can block the Rule 96 automated Customs refund. Where IGST is paid again in the correct zero-rated field and the automated refund relates only to that later payment, the original payment may be claimed as separately identifiable excess tax through FORM GST RFD-01 with a transaction-level reconciliation. The claim must establish double payment, the payment actually refunded, and absence of prior adjustment or duplicate benefit. Article 265 prohibits retention of tax not legally due, while Section 39(9) does not permit retrospective revision of the original return; the remedy is an excess-payment refund, not return amendment.
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GST revocation for return defaults requires timely compliance, while portal barriers may warrant access to statutory consideration.
Notes
GST
GST registration cancelled for continuous non-filing of returns may be revoked under Section 30 and Rule 23 only through a time-bound application and fulfilment of prescribed return-filing and payment conditions. For return-default cancellations, pending returns and all tax, interest, penalty and late fee must be discharged before applying; returns due between cancellation and revocation must generally be filed within 30 days after restoration. Cancellation proceedings require clear notice and an opportunity to respond, and must be dropped where pending returns and dues are regularised before cancellation. Portal refusal may obstruct filing but does not determine statutory eligibility or automatically restore registration; physical submission may be permitted where online filing is technically unavailable, leaving revocation to be decided according to law with procedural fairness.
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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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