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Can GST department pass an order without allowing cross examination of the transporter on whose statement they relied on? The Calcutta HC HELD as follows- 1. The taxpayer has not been given an effective opportunity to rebut the allegations, which have been made against the supplier and the transporter from whom statement/declaration has been obtained by the authority 2. The GST department is directed to furnish copies of the statements obtained from supplier and transporter to the taxpayer. 3. The taxpayer is entitled to submit his further explanation along with the necessary documents and if the appellant requests for cross-examination of those persons, the same should be permitted and thereafter, the GST department shall pass fresh orders on merits and in accordance with law 4. The taxpyer is bound to prove by proper evidence to establish the movement of goods of purchase/sales. Further, there is a negative balance in the credit ledger. Therefore, as on date, the blocking of such ledger will not in any manner prejudice the Taxpayer. 5. However, it is made clear that in case funds flow into the ledger, the blocking of the ledger shall be restricted to the demand amount only.

👉 Erroneous Demand 💸 Confirmation due to Unilateral Rejection of CA Certificates: HC Decision Lokenath Construction (P.) Ltd. v. Tax/Revenue, Government of West Bengal. #Citation: WPA NO. 5222 OF 2024 🔄 #Facts : ⏩ Revenue issued a notice to the appellant, alleging failure to provide evidence of supplier tax payments and wrongful ITC utilization, despite the appellant presenting certificates from CAs confirming tax discharge by suppliers. ⏩ Revenue rejected the certificates without inquiry, confirming the #demand from the SCN, and the adjudicating authority made findings beyond the notices scope. ⏩ The appellant challenged the notice and adjudication order, arguing against the unilateral rejection of certificates and lack of action against suppliers, claiming it to be arbitrary and lacking jurisdiction. 🏹 #Decision : ⏩The court criticized revenues unilateral action, stating it deprived the appellant of an opportunity to clarify, contravening principles of natural justice. ⏩ Revenues dismissal of certificates without investigating suppliers was deemed erroneous and beyond jurisdiction, and the court stressed the necessity for supplier inquiry before penalizing the appellant. It directed authorities to first proceed against suppliers. #GST #CA #APPEAL #COURT #WESTBENGAL #INDIA #TAX #BUSINESS

💡How does the court test whether payment made by taxpayer during search is voluntary or forced ?   Calcutta High Court : Appellant may contest the search and authorization after the issuance of SCN   📝 In a pivotal judgment, the Calcutta High Court held that there may not be any circumstances necessitating recovery of tax dues during the course of search or inspection or investigation proceedings unless it should be against an ascertainment of their liability on non-payment/short payment. Admittedly, in the instant case, such ascertainment has not taken place therefore payment made by appellant is not voluntary.    📅 Referencing Instruction No. 01/2022-23 GST-Investigation and cases like Ganesh Molasses Trading Co. and Vallabh Textiles, the court reinforced those payments made under pressure, without proper acknowledgment & documentation by department (e.g., GST DRC-04), are not voluntary.   🕹️Key Observations by Court : ‣ In this case , ascertainment of liability by taxpayer has not taken place and there was no intimation given to the appellants regarding non-payment or short payment of taxes.   ‣ The department failed to comply with Rule 142 (2) of the CGST Rules, 2017, by not issuing GST DRC-04 to acknowledge GST DRC-03.    ‣ The court ordered the refund of Rs. 30,00,000 paid by the appellants during the search and appellant can claim interest on the refund during adjudication.   ‣ The validity of the search and authorization in GST INS-01 can be contested after the issuance of the show-cause notice.   This ruling highlights the importance of proper documentation and the right to contest procedural discrepancies in GST investigations.   📌 Citation - ATR MALLEABLE CASTING PRIVATE LIMITED 2024 (6) TMI 1258 - CALCUTTA HIGH COURT   #kmsindia #gst #litigation #search #gstinvestigation #circular

𝗥𝗲𝗰𝗲𝗶𝘃𝗲𝗱 𝗻𝗼𝘁𝗶𝗰𝗲 𝗳𝗼𝗿 𝗜𝗻𝗽𝘂𝘁 𝗰𝗹𝗮𝗶𝗺𝗲𝗱 𝘂𝗻𝗱𝗲𝗿 𝘄𝗿𝗼𝗻𝗴 𝗵𝗲𝗮𝗱 𝗼𝗿 𝗚𝗦𝗧 𝗹𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗽𝗮𝗶𝗱 𝘂𝗻𝗱𝗲𝗿 𝘄𝗿𝗼𝗻𝗴 𝗵𝗲𝗮𝗱? Important Judgement in favor of Assessee which will help you to claim refund. Utilisation/Payment of GST Under Wrong Head - Refund can be claimed after making payment under correct head within specified time limit as per Statue (2 Years) Recently, the Kerala High Court, in M Trans Corporation vs State Tax Officer on 30.03.2024, addressed a case where an assessee faced show cause notices due to claiming excess input tax credit. The heart of the matter was the contention that the claim was a result of mistakenly choosing IGST instead of CGST/SGST. According to the court's interpretation of Section 54 in conjunction with Section 49, for a refund of excess tax paid by a registered dealer, an application must be submitted within two years from the last date of filing returns for the relevant year. In this specific case, the assessee failed to submit any application within the prescribed time frame. The court, respecting its jurisdictional limitations, couldn't alter the statutory timeline for such applications. Consequently, the writ petition was dismissed. However, Madras High Court in Sun Dye Chem on 06-10-2020 in WP 29676 of 2019; In GSTR-1 for 2017-18, CGST and SGST wrongly reflected in IGST by the supplier petitioner, permitted the filing of revised GSTR 3B by reflecting ITC under the correct head manually. In the case of Shree Nanak Ferro Alloys Pvt. Ltd. v. The Union of India 2020 (1) TMI 833 - JHARKHAND HIGH COURT, where IGST was wrongly paid under CGST head. It was held that petitioner shall deposit the amount under correct head, which was paid under wrong head towards the liability of Sept., 2017, without any interest on the said amount. The petitioner shall also be entitled to get the refund of the amount of deposited by them. These judgment underscores the importance of adhering to statutory timelines when seeking refunds under GST laws. It serves as a reminder for businesses to be diligent in their tax-related documentation and applications, avoiding potential complications down the road. Copy of Kerala HC Judgement Attached #GSTupdate #CA #Linkedin

📜 Calcutta High Court – Disallowing ITC to the recipient on non-payment of tax by supplier is not valid without first taking action against the supplier📜    Lokenath Construction Private Limited Vs Revenue Government of West Bengal Facts of the Case: A show cause notice dated 22.08.2023 was issued to the taxpayer alleging that the appellant had failed to produce any evidence from which it can be ascertained that the suppliers had paid tax to the government, therefore, ITC claimed is liable to be reversed. Subsequently, the order dated 28.12.2023 confirmed the demand made in the show-cause notice. Thereafter, the appellant filed the writ petition against the impugned order on the ground that the notice has been issued without causing any verification from the supplier’s end and denying ITC to the appellant. High Court Observations: 🔹 The Hon’ble Calcutta High Court emphasized on the clarification issued by the CBIC in a press release that in case of default in payment of tax by the seller, recovery shall be made from the seller, however, in exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc., the reversal of credit from the buyer can be an option with the revenue authorities. 🔹 The High Court explained that furnishing of outward details in Form GSTR-1 by the suppliers and the facility to view the same in Form GSTR-2A by the recipient is in the nature of taxpayer facilitation and does not impact the ability of the taxpayer to avail ITC on self-assessment basis in consonance with the provisions of Section 16 of the GST Act. 🔹 The Hon’ble High Court sets aside the show cause notice and impugned order with a direction to the authorities to first proceed against the supplier and only under exceptional circumstances as clarified in the press release issued by CBIC, the proceedings can be initiated against the appellant. #gst #highcourt #caselaw #gstnews #calcuttahighcourt #gstupdates #VJA

"GARNISHEE NOTICE" Under GST law, unpaid amounts to the Government can be recovered by the proper officer as prescribed. Authorities under GST/IDT can initiate recovery proceedings, including property attachment and sale for settled liability. Top-10 Judgments, read till end. CBIC has recently issued instructions for initiating recovery proceedings within a specified period of 3 months, allowing exceptions only in rare cases. A few important points in this matter are: 1. Initiation of recovery proceedings before adjudication of SCN is not valid. Kerala High court in Homestead Projects & Developers Pvt. Ltd. 2. Initiation of recovery proceeding just a day after rejection of first appeal is not valid. Patna High Court in Sita Pandey 3. Bank account of appellant-assessee attached only for service tax penalties, allowed to operate beyond that amount. Madras High Court in Sabbs Infra and Security Pvt. Ltd. 4. Stay granted on Garnishee order for interest recovery the same day reasons recorded, before three months of appeal filing. Calcutta High Court in Laikhat Ali Mallick 5. Respondent authorities violated natural justice by not allowing the assessee to respond before initiating garnishee proceedings under Section 79. Telangana High Court in Kesoram Industries Ltd. 6. For late GSTR-3B filing, the department imposed penalties without notice. A garnishee notice was sent to the assessee's bank, but no coercive action will be taken for now. Jharkhand High Court in Unity Infraprojects Ltd. 7. After deposit of 10% and filing of appeal, balance amount is deemed to be stated therefore, the garnishee notice send become infructuous. Jharkhand High Court in Sri Ram Construction 8. Garnishee Notice cannot be issued before expiry of three months i.e. time to file first appeal. Andhra Pradesh High Court in S.P.Y. Agro Industries Ltd. 9. Issuance of garnishee notice without issuing show cause notice/adjudication order for short-payment, not sustainable. Karnataka High Court in Quantium Mail Logistics Solutions India Pvt. Ltd. 10. Garnishee notice under Section 87(b)(i) of Finance Act, 1994 has to be preceded by determination of the amount due and not paid. Bombay High Court in New India Civil Erectors Pvt. Ltd. Hope you will find this useful. Abhishek Raja Ram 9810638155 #ARR4NIRC

ONCE GST REFUND APPLICATION FILED WITHIN THE LIMITATION PERIOD, THE SUBSEQUENT SUBMISSION OF DOCUMENTS OR CLARIFICATIONS DOES NOT RESULT IN TIME BARRED > Taxpayer filed a refund application within the 2-year statutory period prescribed. > GST department issued a deficiency memo RFD-03, asking for additional supporting documents, but did not raise any issue of limitation. > The Taxpayer submitted a fresh application, attaching the required documents. However, the GST Department rejected the application, citing limitation. > The Petitioner filed the present writ petition concerning the rejection of a GST refund application, which was based on the ground of limitation under Section 54 of the CGST Act, 2017. > The Jammu and Kashmir High Court held that once an application is filed within the limitation period, the subsequent submission of documents or clarifications does not render the application time-barred. > The Court stated that the second application was not a new application but a continuation of the first one, which was filed within the limitation period. > Intial Deficiency Memo RFD-03 did not raise the limitation issue. The claim could not be rejected as time-barred. > The Court allowed the Writ petition, quashed the deficiency memo, and directed the respondents to process and release the GST refund with interest at 7%. Check out profile CA Sachin M Jain for more!! #LetsMakeTaxSimple #gst #accounts #finance #manager #cfo #ceo #business #polloftheday #Casachinmjain #Casachinjain #Casachin #learn #knowledge #refunds #alert #Highcourt #Judgement #riskyexporter #customs #IGST #GSTREFUND #investment #incometax #savetax #planning #appeal #news

*Merely producing tax invoices, e-way bills, and banking channel payments is not sufficient to claim ITC on Goods Purchased in GST.* The Hon’ble Allahabad HC in an order dated 14-08-2024 followed the Principles laid down by Hon’ble SC State of Karnataka Vs. M/s Ecom Gill Coffee Trading Private Limited [2023 (3) TMI 533 - SUPREME COURT] – case decided for VAT Regime, and held that *Merely producing tax invoices, e-way bills, and banking channel payments is insufficient. Proof of actual physical movement of goods, genuineness of transportation, payment of freight charges, acknowledgment of delivery, toll receipts, and filing of GSTR 2A is necessary*. The Supreme Court has held that the primary burden is on the dealer to furnish details like selling dealer, vehicle number, freight payment, delivery acknowledgment, tax invoices, and payment particulars to establish actual goods movement. Submitting only invoices, e-way bills, or payment details is inadequate. Consequently, the High Court dismissed the writ petition, upholding the orders denying ITC for non-compliance with statutory conditions. Read the complete details on https://lnkd.in/ghSKxhnt CA Sohrabh Jindal 9810216640

GST Litigation: ITC can be eligible if the return of the September filed on or before 30th November taking as retrospective effect by the Hon'ble Kerala HC. Case Name: M.Trade Links Vs Union Of India (Kerala High Court) Appeal Number: WP(C) NO. 31559 of 2019 Date of Judgement/Order: 04/06/2024 Relavant extract of the ruling are as under :- "Para 101. The liberty is granted to the petitioners, who can claim the benefit of the two Circulars, namely, Circular No. 183/15/2022-GST dated 27.12.2022 and Circular No. 193/05/2023- GST dated 17.07.2023 to make their claim within one month from today before the appropriate authority who shall examine the claim of the individual dealer and process the claim. Para 101.1 The time limit for furnishing the return for the month of September is to be treated as 30th November in each financial year with effect from 01.07.2017, in respect of the petitioners who had filed their returns for the month of September on or before 30th November, and their claim for ITC should be processed, if they are otherwise eligible for ITC. The writ petitions are hereby disposed of. All Interlocutory Applications as regards interim matters stand closed." Source : https://lnkd.in/gyuygyfx #gst #incometax #tax #business #accounting #gstupdates #gstindia #ca #gstr #india #icai #charteredaccountant #finance #accountant #taxes #gstregistration #gstreturns #taxation #castudents #startup #incometaxindia #incometaxreturn #itr #gstcouncil #commerce #cafinal #cs #smallbusiness #icsi #companysecretary

TaxMarvel GST Case Law Alert 🏆 ⏰ “Where no input tax credit was available in ledger, blocking of Electronic Credit Ledger(ECL) under Rule 86A and insertion of negative balance in ledger would be wholly without jurisdiction and illegal.” – Jharkhand High Court Blocking ITC in the electronic credit ledger by insertion of negative balance is illegal [ Maa Sharda Endeavour (p.) Ltd. V/s State of Jharkhand - Jharkhand HC] Where there was no credit of input tax available in electronic credit ledger of assessee, one of necessary conditions for passing an order under rule 86A(1) would not be satisfied. If no ITC was available in ledger, blocking of electronic credit ledger under rule 86A and insertion of negative balance in ledger would be wholly without jurisdiction and illegal. Negative blocking of the Electronic Credit Ledger, is contrary to the decision of the Gujarat High Court in Samay Alloys India P. Ltd. v. State of Gujarat, and the decision of the Telangana High Court in M/s. Laxmi Fine Chem v. Assistant Commissioner, Malkajgiri and others, and the decision of the Delhi High Court in M/s Jai Maa Enterprises v. Principal Chief Commissioner, CGST and CX, Delhi & Ors. [Section 17 of CGST Act, 2017/ Rule 86A of CGST Rules, 2017] Follow TaxMarvel Consulting Services LLP for more such alerts