Goods and Services Tax

Statutory cap on general GST penalties requires quashing excess penalties despite return filing and late-fee payment.
Case-Laws
GST
General penalty imposed after a return was filed and statutory late fee paid cannot exceed the maximum limit under the U.P. GST Act. The return had been filed and the late fee paid in accordance with law. As the penalty exceeded that statutory cap, the show-cause notice and penalty order were quashed and set aside. The writ petition was disposed of.
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Show cause notice limits GST demand grounds, requiring quashing where the final order relies on a different basis.
Case-Laws
GST
Section 75(7) of the UPGST Act bars confirmation of a GST demand on grounds not proposed in the DRC-01 show cause notice. A demand founded in the final order on a ground different from that set out in the notice breaches this mandatory requirement and constitutes an incurable defect in the proceedings. The demand order was therefore quashed, while preserving the revenue's liberty to issue a fresh show cause notice in accordance with law.
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Condonation of delay restored a GST appeal for merits review, subject to timely payment of costs.
Case-Laws
GST
Condonation of delay in a statutory GST appeal was granted after the proprietor attributed the delayed filing to attendance on a critically ill spouse. High Court, acting on the parties' concession and the explanation furnished, set aside the appellate dismissal as time-barred and restored the appeal for fresh adjudication on merits. Restoration was conditional on timely payment of costs; failure to comply would remove the benefit of restoration. All issues on the underlying GST dispute remained open before the appellate authority.
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Double taxation of turnover requires holistic verification across separately registered units and permits limited rectification of overlapping assessments.
Case-Laws
GST
Double taxation of the same turnover across separately registered units constitutes a rectifiable mistake where the assessee establishes that turnover taxed in one unit was assessed again in another. Separate registrations or assessment under different charges do not prevent the Department from examining all relevant records holistically to ensure that turnover is taxed only once. The assessment was set aside solely for verification and reworking of the alleged overlapping turnover between the units, with a fresh determination directed on that limited issue. Other disputed issues remained open to be pursued through available remedies.
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Duplicate GST adjudication on GSTR reconciliation and excess input tax credit was quashed where identical proposals were previously determined.
Case-Laws
GST
Duplicate GST adjudication cannot be sustained where tax proposals concerning GSTR-1/GSTR-3B reconciliation and excess input tax credit in GSTR-3B versus GSTR-2A have already been determined in an earlier order. Complete overlap between the proposals prevents a second determination, even while an appeal against the earlier order is pending. The impugned order was quashed to the extent it repeated those two proposals.
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GST proceedings against deceased sole proprietors lack jurisdiction where authorities knew of death and legal heir, requiring fresh lawful action.
Case-Laws
GST
GST demand proceedings initiated in the name of a deceased sole proprietor lacked jurisdiction where the authority had been informed of the death during cancellation proceedings and knew that the legal heir had pursued an earlier appeal. Fresh action against the deceased was therefore invalid, notwithstanding allegations of wrongful input tax credit availment. The intimation, show-cause notice and demand order were quashed. The authority retained liberty to initiate proceedings against the legal heir where permissible in law, while the merits of the input tax credit allegations and all contentions concerning such proceedings remained open.
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Prospective omission of Rule 96(10) preserved IGST refund processing where no saving clause retained the export restriction.
Case-Laws
GST
Prospective omission of Rule 96(10) of the CGST Rules removed the restriction relied on to reject an IGST refund claim for exports made using Advance Authorisation imports. In the absence of a saving or sunset clause, the omitted restriction could not continue to defeat the claim. The refund rejection was quashed, and the claim was required to be processed within 12 weeks.
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Input tax credit reconciliation enables fresh GST adjudication after non-participation, subject to timely evidence and conditional tax deposit.
Case-Laws
GST
GST adjudication concerning a mismatch between input tax credit claimed in Form GSTR-3B and reflected in Form GSTR-2A was reopened after the taxpayer's non-participation following a board change. The adjudication and demand orders were quashed conditionally, requiring timely submission of a reconciliation and supporting transaction documents, together with deposit of 10% of the disputed tax, pending fresh adjudication.
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E-Way Bill Reuse Requires Cogent Evidence of Prior Transport Before Penalty Can Be Sustained Under GST
Case-Laws
GST
Penalty under section 129 for alleged e-way bill reuse requires cogent, positive evidence of prior transportation or delivery of the same goods; extended document validity and the driver's statement on loading date, without independent corroboration, are insufficient. Matching quantities and descriptions in tax invoices and valid e-way bills supported the recorded movement, while omission of the dispatching premises' GSTIN did not establish unaccounted goods or a fictitious transaction. In the absence of proof of earlier delivery, unloading, return, second loading, or an intent to evade tax, the penalty could not be sustained. The order setting aside the penalty remained in force and the departmental appeal failed.
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Merger-related input tax credit transfers raise statutory eligibility questions requiring scrutiny of prescribed transfer procedures.
Case-Laws
GST
Transfer of input tax credit in a merger requires examination of the interaction between section 16(2), section 18(3) and rule 41, particularly whether a transferee may directly avail credit reflected against the transferor's GSTIN without using the prescribed transfer mechanism. The issue concerns whether that mechanism is mandatory and whether non-compliance is procedural or substantive. Statutory interpretation of eligibility and transfer requirements constitutes a question of law for purposes of Division Bench jurisdiction under section 109(8), rather than merely a factual dispute. The appeal is to be heard by a Division Bench on merits.
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India and New Zealand sign Memorandum of Cooperation (MoC) on Electronic Origin Data Exchange to Facilitate Bilateral Trade Under the India-New Zealand Free Trade Agreement (FTA)
GST
Dated:- 21-10-2026

India-New Zealand MoC will deepen Customs cooperation and support effective implementation of trade facilitation measures

The Central Board of Indirect Taxes and Customs (CBIC), India, and the New Zealand Customs Service (NZCS) signed a Memorandum of Cooperation (MoC) concerning Electronic Origin Data Exchange of Trade in Goods.

The MoC marks an important step towards strengthening customs cooperation and facilitating bilateral trade between the two countries. The MoC was signed under the India-New Zealand FTA which entered

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Provisional attachment cannot freeze a payment aggregator's escrow funds without tangible material linking it to GST liability.
Case-Laws
GST
Provisional attachment of a payment aggregator's current and regulated escrow accounts requires an opinion based on tangible material showing that attachment is necessary to protect revenue. Vague suspicion of GST evasion by unidentified third-party online gaming merchants, without identifying the aggregator's tax liability, relevant transactions, evasion method, or statutory status, does not satisfy that threshold. Escrow funds reserved for merchant settlements are held in trust and are not the aggregator's attachable property. The High Court treated the attachment orders and continuing debit freezes as illegal and quashed them.
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Assessment jurisdiction transfers require proven searched-group nexus; isolated transactions alone cannot justify inter-State coordinated investigation.
Case-Laws
GST
Inter-State transfer of assessment jurisdiction for coordinated investigation requires a demonstrated structural nexus between the taxpayer and the searched group; an isolated transaction is insufficient. Alleged incriminating material must establish interlacing of funds or interconnected business activities, rather than an unfounded or non-transparent conclusion. Absent a legitimate necessity for coordinated investigation, transfer may be arbitrary, show non-application of mind, and breach natural justice. Assessment jurisdiction remained at Kolkata, while material gathered at New Delhi was to be sent to the Kolkata Assessing Officer for lawful inquiry, preserving the Revenue's ability to investigate there.
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Service of GST seizure orders is established by signed physical delivery, defeating a non-service challenge to seizure proceedings.
Case-Laws
GST
Service of a seizure order in Form GST INS-02 was satisfied where the order identified the seized articles and bore the petitioner's signatures acknowledging physical delivery. The High Court declined to resolve conflicting factual claims on affidavits in writ jurisdiction, rejected the non-service challenge to the search and seizure proceedings, and dismissed the writ petition. The merits of the statutory proceedings remained open before the competent authority.
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Input tax credit survives supplier deregistration when bona fide purchase evidence is unrebutted and recipient collusion remains unproven.
Case-Laws
GST
Input tax credit may remain available to a bona fide purchasing dealer where contemporaneous records, including tax invoices, e-way bills, consignment notes, banking payment evidence and proof of material consumption, establish actual receipt and use of goods. A supplier's later non-existence or retrospective registration cancellation does not by itself defeat credit if the supplier was registered when the supply occurred and transaction evidence remains unrebutted. Penalty for wrongful credit requires proof of fraud, wilful misstatement, suppression or collusion attributable to the recipient; a purchaser is not a guarantor of the supplier's subsequent non-compliance.
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E-way bill obligations cover internal stock transfers, but penalties fail where bona fide error negates tax-evasion intent.
Case-Laws
GST
E-way bill rules require an e-way bill for internal stock transfers exceeding the prescribed value, even where goods move under a delivery challan otherwise than by supply; the challan does not replace that obligation. Transfer of tax-paid goods between a dealer's own premises, without another person or consideration, does not constitute supply and attracts no tax. Although failure to carry an e-way bill was a technical procedural breach, penalty under Section 129 was unsustainable because the goods were traceable and a bona fide misunderstanding of distance-based rules negated intent to evade tax. The penalty and related orders were set aside, with refund of the deposited penalty plus applicable interest.
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Specific tariff classification places Ghamella/Tasla under taxable goods provisions rather than the agricultural hand-tool exemption.
Case-Laws
GST
Ghamella/Tasla is classified as a taxable article under the specific Chapter 73 tariff description rather than as an exempt agricultural hand tool. Its concave, load-bearing container design lacks the active working attributes of a hand tool, so the specific entry prevails over the general exemption entry. The later exclusion from the agricultural-tools exemption is clarificatory and does not create retrospective tax liability. Internal audit clearance or pre-notice administrative closure is not a quasi-judicial adjudication and does not bar a subsequent show cause notice on res judicata grounds. Describing the unchanged product as an exempt implement supports penalty for deliberate misstatement and suppression of taxable supplies.
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Proof of actual diversion is required before GST penalty can override a valid invoice and e-way bill.
Case-Laws
GST
Penalty under Section 129(3) for alleged diversion of goods requires reliable evidence that the actual movement or delivery contravened GST law, even where valid invoices and e-way bills accompany the consignment. Vehicle proximity to another factory, discrepancies in a transport bilty, and the driver's statement do not, without corroboration, establish delivery to an undeclared recipient where the goods' description and quantity match the accompanying documents. Failure to provide GPS-camera footage relied on adversely may deny a fair opportunity to contest the allegation. The penalty orders were set aside and the penalty quashed.
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Compensation Cess ITC refunds require meeting the inverted-duty statutory test; eligible credit alone does not create cash-refund entitlement.
Case-Laws
GST
Refund of accumulated Compensation Cess ITC for domestic leather-product supplies under the inverted-duty structure requires more than lawful availment of credit. Section 54(3) limits refunds of unutilised ITC to statutory categories; credit usable only for Compensation Cess does not itself establish a cash-refund right. The claimant must meet the inverted-duty test and show that the exclusion for nil-rated or exempt outward supplies does not apply. A clarification on qualifying zero-rated supplies does not create an unconditional domestic-supply refund. As statutory entitlement was not established, the refund-granting order was set aside and rejection orders restored.
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Delayed transport documents failed to validate intercepted goods, sustaining transit-state penalties where the claimed interstate destination remained unproved.
Case-Laws
GST
Delayed production of invoices and bilties did not establish that intercepted makeup accessories were documented, where the driver initially produced all documents available and the later material was uncorroborated. Unidentified buyers and sellers, unverified business credentials, unexplained discrepancies, and no reliable link between the documents and goods supported treating the consignment as undeclared. Transit-State action was not excluded by the asserted inter-State movement because the claimed out-of-State destination was not established. The documented-consignment precedent was distinguishable, and the penalty for transporting undeclared goods was sustained.
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Inverted tax refunds require independent statutory entitlement; eligible Compensation Cess credit alone does not justify cash refunds for domestic supplies.
Case-Laws
GST
Refund of accumulated Compensation Cess input tax credit on coal used to manufacture leather products for domestic supply under an inverted tax structure depends independently on the conditions in Section 54(3); credit standing in the electronic credit ledger does not itself create a cash-refund right. Availability of credit, including the absence of a blocked-credit restriction, concerns credit availment rather than refund eligibility. Inability to use cess credit against other liabilities and the absence of cess on domestic output supplies do not establish inverted tax structure eligibility. Clarifications and export-related decisions concerning zero-rated supplies do not support the domestic refund claim. The refund-granting appellate order was set aside, restoring the original rejections.
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Compensation Cess refund for domestic supplies requires statutory refund eligibility; credit availment alone does not create entitlement.
Case-Laws
GST
Refund of accumulated Compensation Cess input tax credit on coal used to manufacture domestically supplied leather products is limited to the statutory categories for unutilised credit. A cess burden on inputs, where domestic outward supplies do not attract the cess, does not by itself meet the inverted tax structure requirement. Eligibility to avail credit, including the absence of a blocked-credit restriction, is distinct from entitlement to a cash refund. Restrictions on credit utilisation neither bar every refund nor create an independent refund right. Clarifications and authorities concerning zero-rated supplies or exports do not establish eligibility for domestic supplies.
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E-way bill expiry triggers GST civil penalty without proof of tax-evasion intent where vehicle breakdown lacks credible evidence.
Case-Laws
GST
Section 129(1)(a) of the GST Act treats transportation in contravention of the Act or Rules, including movement after expiry of an e-way bill, as attracting civil penalty without requiring proof of intent to evade tax. A claimed vehicle breakdown must be established by reliable material. GPS data concerning another vehicle, repair records lacking evidentiary value, and an explanation not contemporaneously disclosed do not substantiate the claim. Guidance that does not address movement with an expired e-way bill provides no justification; on these facts, the penalty was upheld.
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Road-restoration charges form taxable consideration when restoration is requested for a business pipeline project under reverse charge.
Case-Laws
GST
Road-restoration charges paid for planned restoration following road cutting for a business pipeline constitute consideration for a taxable service where the work is specifically requested and involves bilateral reciprocity, rather than compensatory damages. Targeted restoration undertaken for a commercial entity does not qualify as a general governmental public-function service or non-supply, and recipient-side reverse-charge liability applies where forward-charge payment is unproven. Refund sanctions for parallel registrations in other jurisdictions neither bind an independent appellate authority nor override statutory conditions. Electronic GST proceedings remain valid without a physical Document Identification Number where authenticated portal records establish source and integrity, the notice identifies the factual and legal basis, and no prejudice is shown.
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Personal GST penalty extends beyond registration only when benefit retention and transaction control are cumulatively proved.
Notes
GST
Section 122(1A) of the CGST Act extends penalty exposure to registered and unregistered persons, not only taxable persons, for specified invoice and input tax credit contraventions. Liability requires cumulative proof that the person retained the benefit of the identified transaction and that it was conducted at that person's instance; status as a director, employee, signatory or associate is insufficient. Proceedings must identify the covered underlying contravention and make person-specific, evidence-based findings on both elements, consistent with natural justice and reasoned adjudication. The provision does not create general vicarious liability and applies prospectively only to underlying acts or transactions occurring on or after 1 January 2021.
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