Goods and Services Tax

Project-level anti-profiteering methodology treats actual post-GST ITC gains as buyer benefits, including consequential GST and interest.
Case-Laws
GST
Project-level anti-profiteering computation measures additional ITC against project expenditure, allocates the resulting saving per square foot across the project and sold area, and does not use purchase value as a turnover proxy. Only tax credit actually availed is relevant to the supplier's economic benefit; unavailed pre-GST CENVAT credit cannot notionally offset post-GST ITC, including credit on input services. GST collected on price increases arising from profiteering forms part of the benefit to be passed to homebuyers, with interest payable under the statutory scheme. Writ review does not replace specialised fact-based computations absent non-consideration of material submissions or manifest legal or jurisdictional error.
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Natural justice in transfer-pricing proceedings requires a personal hearing and reasoned consideration of written objections before determination.
Case-Laws
GST
Natural justice in transfer-pricing proceedings requires a personal hearing, reasoned findings, and meaningful consideration of written submissions. Although the transfer-pricing order recorded that written replies had been considered, it neither disclosed that a personal hearing was granted nor addressed the contentions raised. The cryptic and unreasoned order was set aside, with directions for a fresh reasoned determination after a personal hearing. The time for completing the assessment was extended.
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Effective GST personal hearings require reply time to expire first; premature scheduling invalidates adjudication and requires fresh proceedings.
Case-Laws
GST
Effective opportunity of personal hearing in GST adjudication requires that the hearing be scheduled after expiry of the deadline for replying to the show-cause notice. Scheduling it earlier makes the hearing illusory because the taxpayer cannot first submit the permitted response, thereby breaching principles of natural justice. Adjudication and appellate orders passed in these circumstances were quashed, with fresh proceedings to recommence from the show-cause notice stage after allowing a reply and then fixing a personal hearing.
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Statutory stay on GST recovery requires review of claimed appellate deposits and refund or recredit of excess recovery.
Case-Laws
GST
Statutory stay of the balance GST demand applies once the prescribed cumulative appellate pre-deposits are paid under the GST enactment. The High Court did not determine whether the required deposits had actually been made or whether recovery from the Electronic Cash Ledger exceeded those deposits. It directed independent consideration of the taxpayer's representation after a personal hearing and required a reasoned and speaking order within the stipulated period. Any recovery found to exceed the cumulative statutory pre-deposits must be refunded or recredited. The underlying merits of the GST demand remain open.
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GST adjudication limits: demands and penalties cannot exceed the show-cause notice, requiring fresh adjudication when statutory limits are breached.
Case-Laws
GST
Section 75(7) of the GST law prohibits an adjudicating authority from confirming a tax demand or penalty exceeding the amounts proposed in the show cause notice. This statutory restriction is mandatory, and any adjudication order exceeding the proposed demand is without jurisdiction. The impugned order was set aside, with the matter remitted for fresh adjudication after providing an opportunity of hearing.
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Fresh GST adjudication follows claimed tax discharge and overlapping demands, conditional on payment of previously assessed interest and penalties.
Case-Laws
GST
Fresh GST adjudication was required where the taxpayer asserted that tax liability had already been discharged and that the final demand components overlapped with an assessment by the jurisdictional officer. The assessment was quashed and remitted for a fresh merits decision after notice, conditional on deposit of interest and penalty imposed in the earlier jurisdictional assessment. Failure to make that deposit permitted recovery in accordance with law.
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Expired e-way bills alone cannot support detention and penalty where invoices, verification and absence of tax evasion show compliance.
Case-Laws
GST
Expiry of an e-way bill, without more, does not justify detention, integrated tax, or penalty under section 129 where the consignment is accompanied by tax invoices and supporting documents, physical verification reveals no discrepancy, and no tax evasion is found. Board instructions distinguish minor procedural lapses from substantive breaches. The explanation for failure to extend e-way bill validity requires consideration, and intention to evade tax remains relevant. On these facts, invoking section 129 solely for expired e-way bills was unjustified, and the resulting tax and penalty demand was set aside.
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Mandatory employee canteens: recoveries avoid GST, while input tax credit is limited to the employer-borne cost.
Case-Laws
GST
Employee recoveries for subsidised canteen meals provided under statutory obligations at factories, R&D facilities and corporate offices are treated as employer-employee contractual perquisites rather than supplies under section 7 of the CGST Act; GST is therefore not payable on those recoveries. Input tax credit on GST charged by the canteen provider is available where the facility is legally mandatory, because the proviso to section 17(5)(b) applies across that clause. Credit remains restricted to the employer-borne canteen cost, while the proportion attributable to employee meal recoveries is disallowed.
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Personal liberty safeguards restrict arrest after court-directed GST appearance, requiring interim release where authorities overreach pending proceedings.
Case-Laws
GST
Personal liberty under Article 21 was prima facie infringed when GST authorities arrested a petitioner who had appeared with records pursuant to a court direction in pending proceedings. The arrest authorisation omitted the direction and appearance, relied on routine grounds considered misplaced, and reflected a discrepancy between the summons time and later generation of its DIN, indicating possible manipulation. Interim release was directed, subject to passport surrender and travel conditions, while officers were required to explain their conduct before any disciplinary recommendation. The interim relief did not determine the merits of the pending proceedings.
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Alternative statutory remedy and delay bar GST writ challenges despite pending rectification, while distinct subject matter permits parallel proceedings.
Case-Laws
GST
Writ jurisdiction against a GST adjudication order is generally unavailable where an efficacious statutory appeal was not pursued within time and delay remains unexplained; a pending rectification application does not create a fresh period to challenge the original order. The statutory restriction on parallel GST proceedings applies only where proceedings concern the same subject matter, rather than merely the same assessee, period, transactions, or factual background. Proceedings based on incorrect tax liability and inadmissible input tax credit may continue independently from allegations of fraudulent credit without actual supply. The bar on duplicate penalties requires a prior penalty imposed on the person concerned for the same act or omission.
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Post-death GST liability remains recoverable from estate assets, while retained investigation deposits require a lawful basis and hearing.
Case-Laws
GST
Section 93 of the CGST Act permits post-death determination of tax, interest or penalty through a legal representative, without requiring adjudication to have begun during the deceased's lifetime. Liability remains confined to estate assets and does not attribute the underlying contravention to the representative; effective hearing and appellate safeguards support its constitutional validity. Pure questions concerning Section 93 may be examined in writ jurisdiction despite an alternative remedy, but factual and merits disputes, including service, proof, representative-liability conditions and penalty computation, belong in statutory appeal. Retention or appropriation of investigation deposits requires a disclosed lawful basis and reasoned determination after hearing; any unsupported balance must be released with accrued fixed-deposit interest.
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GST registration cancellation requires a fair opportunity to produce evidence; unrelated input tax credit demands require separate notice.
Case-Laws
GST
GST registration cancellation without deciding a registrant's request for time to submit transaction and input tax credit evidence breaches natural justice. The High Court quashed the show cause notice and cancellation order because the authority failed to consider material the registrant sought to produce, while permitting fresh proceedings on proper notice and opportunity. Registration-revocation proceedings cannot be combined with input tax credit disallowance or demands for tax, interest and penalty on grounds absent from the original notice. The rejection of revocation and appellate order were also quashed; fresh proceedings may be initiated in accordance with law, with merits left open.
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Overlapping GST proceedings bar consolidated demands for periods already covered by State tax action and require fresh determination.
Case-Laws
GST
GST law bars overlapping Central and State departmental proceedings when they assess or recover the same tax liability arising from the same contravention. The prohibition does not extend to distinct infractions solely because they produce similar liabilities or deficiencies. A consolidated GST demand that included FY 2017-18 and FY 2018-19, already covered by State proceedings, had to exclude those overlapping periods. The consolidated demand was quashed, and fresh determination was confined to periods not subject to the State proceedings.
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Effective service of rectification notices is essential before rejecting inverted-duty GST refunds, requiring fresh hearing on remand.
Case-Laws
GST
Effective service of a rectification notice is required before adjudicating a refund of accumulated input tax credit under an inverted duty structure. Adjudication after the notice was returned undelivered breached principles of natural justice because the claimant was denied an opportunity of hearing. The refund rejection was set aside and remitted for fresh adjudication after granting a hearing, while leaving the merits of the refund claim open.
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Erroneous refund recovery permits statutory interest on excess inverted-duty ITC refunds despite unchallenged sanction orders and principal repayment.
Case-Laws
GST
Recovery of an excess monetary refund of unutilised input tax credit under the inverted-duty scheme may proceed as an erroneous refund under section 73, even where the original refund sanction was not challenged by appeal or revision. The recovery mechanism is distinct from appellate or revisional review of the sanction order. Statutory interest applies under sections 73 and 50 until the principal is repaid; repayment through FORM GST DRC-03 does not close proceedings unless interest is also paid. Substituted Rule 89(5), operative before the refund claim and sanction, governs entitlement; later judicial validation and Rule 88B do not make interest impermissibly retrospective. Interest is computed for the period the erroneous refund remained with the recipient.
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Rule 86A ledger blocking remains distinct from deemed recovery stay following an appellate pre-deposit, requiring separate unblocking consideration.
Case-Laws
GST
Rule 86A blocking of an electronic credit ledger is a provisional measure that requires recorded reasons and cannot continue beyond one year. Filing an appeal with the prescribed pre-deposit creates a deemed stay of recovery for the remaining demand, preventing appropriation from the electronic cash ledger and the blocked credit ledger. That recovery stay does not automatically lift the separate Rule 86A blocking order. Unblocking must be sought independently, and any refusal should be issued through a speaking order after consideration of the request.
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Provisional GST bank-account attachments lapse after one year, requiring defreezing where no fresh attachment order exists.
Case-Laws
GST
Provisional attachment of bank accounts under GST is a pre-emptive revenue-protection measure that ceases by operation of law one year after the attachment order. Continued freezing cannot rest on an expired attachment where no fresh provisional attachment order has been issued. Where account holders were not recipients of a later demand-cum-show cause notice, that notice did not provide a basis to maintain restrictions on their accounts. The lapsed attachments required the bank accounts to be defreezed and made operable upon production of a certified copy of the order.
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Incorrect GST head payments may be adjusted against IGST liability without duplicate tax payment or interest.
Case-Laws
GST
Tax paid under the CGST and SGST heads through a clerical error may be appropriated towards the corresponding IGST liability where the entire liability was discharged within the prescribed period. Although Section 77 does not expressly address this payment error, its underlying principle avoids requiring the taxable person to make a duplicate payment and then pursue a refund. Interest should not apply where the required tax has already been remitted, albeit under incorrect GST heads. Appropriation may be made on application, with a refund application filed if required procedurally.
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Duplicate GST adjudication on identical issues and periods undermines later State GST assessment and rectification action.
Case-Laws
GST
Parallel Central and State GST proceedings concerning identical issues for the same assessment period require avoidance of duplicate adjudication. Where Central GST authorities issue an earlier adjudication order and an appeal against it remains pending, subsequent State GST assessment and rectification orders addressing the same issues and period cannot be sustained. The overlap between the two proceedings makes the later State GST action duplicative of the prior Central GST adjudication.
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Mandatory e-way bill compliance was not enforceable before nationwide implementation, preventing detention and penalty for non-production.
Case-Laws
GST
Mandatory nationwide e-way bill compliance for inter-State movement of goods took effect only from 1 April 2018, despite rule 138 having provided the operational mechanism earlier. Non-production of an e-way bill for goods intercepted before that date therefore did not justify detention or penalty. Correspondence between the goods, invoice and transport documents, coupled with the absence of discrepancies or material indicating intent to evade tax, supported deletion of the detention proceedings and penalty. The Revenue's challenge against that deletion failed.
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E-way bill validity requires correct Part B vehicle details; expired bills with mismatched vehicles can support tax-evasion penalty.
Case-Laws
GST
E-way bill validity requires Part B to state the actual vehicle used for movement; a concession for minor clerical errors does not cover entirely different vehicle particulars. Transport under an expired e-way bill bearing a wholly different vehicle number may support a rebuttable presumption of intent to evade tax. Mens rea is not required for a civil fiscal penalty unless the governing enactment makes it essential. The presumption remains rebuttable through surrounding facts, but failure to provide a satisfactory rebuttal supports penalty under the CGST/UPGST transport-of-goods provisions. On the stated facts, the penalty was sustained and the second appeal dismissed.
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Inverted Duty Refund Turnover Requires Verified Treatment of Differently Taxed Outward Supplies Before Refund Computation
Case-Laws
GST
Inverted duty structure refund computation requires accurate determination of turnover of inverted-rated supplies and adjusted total turnover. The treatment of outward supplies allegedly taxable at a higher rate must be verified before deciding whether they form part of the relevant turnover figures. Where supporting invoices or other documents are unavailable and the relevant issue has not been examined, the admissible accumulated input tax credit refund cannot be correctly quantified. Refund computation requires fresh examination after production of relevant records and a reasonable opportunity for both sides to address the turnover treatment.
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Pre-GST service tax refunds for cancelled flat bookings must be claimed in cash, not through GST input tax credit.
Case-Laws
GST
Pre-GST service tax paid on advances for flat bookings later cancelled after the appointed day does not qualify as input tax under the CGST/SGST Acts and cannot be carried as GST input tax credit. Where services are ultimately unprovided, the transitional provision requires the service-tax refund claim to be processed under the existing law and paid in cash. Taxpayers cannot adjust that claim through an electronic credit ledger without specific statutory authority. The claimed GST credit was therefore inadmissible.
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Reasoned GST appellate orders required as unaddressed grounds and procedural objections require fresh adjudication in full.
Case-Laws
GST
Reasoned appellate orders are required by natural justice: common GST appellate orders confirming demands were invalid because they gave only a general conclusion without addressing material appeal grounds, cited judicial authorities, or each appellant's distinct contentions. The failure to give cogent reasons constituted a failure to exercise appellate jurisdiction. Objections concerning show cause notices, availability of relied-upon documents, and effective personal hearing in original proceedings also required consideration. The Tribunal set aside the appellate and original orders and remitted the matters for fresh adjudication after providing relied-upon documents, allowing replies and effective hearings, and issuing reasoned orders.
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Mixed Supply Classification Applies Highest GST Rate to Bundled Digital Cinema Equipment Leasing Under a Single Rental Agreement
Case-Laws
GST
Leasing digital cinema equipment comprising a projector, server, UPS and VSAT for a single rental is classified as a mixed supply where the items are not naturally bundled in the ordinary course of business and can be supplied independently. The bundled lease therefore does not meet the requirements of a composite supply. GST is payable at the highest rate applicable to any constituent supply, which is the rate applicable to the projector: 28% up to 21 September 2025 and 18% thereafter. The bundled-lease treatment as a mixed supply is accordingly correct.
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