Goods and Services Tax

GST not applicable on transfer of leasehold rights of industrial land under current GST laws, says HC ruling
Case-Laws
GST
The HC held that GST is not leviable on the assignment of leasehold rights of industrial land and buildings by the lessee to a third party for a lump sum, as such assignment constitutes a transfer of benefits arising from immovable property and falls outside the scope of supply under GST law. Applying the precedent, the court found the petitioner's transfer of leasehold rights to be similar and thus exempt from GST. Consequently, the impugned order and show cause notice issued without jurisdiction were quashed and set aside. The petition was allowed, affirming that the transfer did not attract GST liability.
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Writ Petition Dismissed for Non-Appearance; No Violation of Natural Justice Under Section 73 CGST/SGST Act
Case-Laws
GST
The HC dismissed the writ petition challenging the order issued under section 73 of the CGST/SGST Act, 2017, on grounds of alleged violation of natural justice. The court held that the petitioner was granted an opportunity of hearing but failed to appear, distinguishing non-appearance from denial of hearing. The petitioner's claim of seeking additional time was found insufficient as the hearing date was already fixed. The court ruled that the alleged procedural lapse did not amount to a violation of natural justice. Disputes regarding the merits of the order fall within statutory remedies, which the petitioner was liberty to pursue. Consequently, the petition was dismissed while preserving the petitioner's right to statutory recourse.
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Anticipatory bail granted for extortion and GST evasion case citing personal vendetta and no custodial need
Case-Laws
GST
The HC granted anticipatory bail to the applicant accused of extortion and GST evasion, finding the FIR to be motivated by personal vendetta and internal company disputes. The applicant, employed as a receptionist with no direct involvement in the alleged offenses and no recoverable material, was deemed not requiring custodial interrogation. The Court emphasized the applicant's willingness to cooperate and join the investigation as directed. Bail was allowed on the condition that the applicant executes personal or surety bonds and joins the investigation within one week, thereby avoiding unnecessary harassment and ensuring compliance with the investigative process.
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HC reduces deposit for tax stay to 10% under relevant revenue notifications, modifying earlier order accordingly
Case-Laws
GST
The HC adjudicated a challenge to the First Appellate Authority's order mandating a deposit for stay of the impugned tax order. It recognized a Central revenue notification reducing the deposit requirement to 10% of the disputed tax. The State revenue issued a corresponding notification aligning with this reduction. Consequently, the HC modified the earlier order, directing the petitioner to deposit 10% of the remaining disputed tax to maintain the stay. The petitioner's submission regarding the reduced deposit was accepted, and the writ petition was disposed of accordingly, with the stay contingent upon compliance with the revised deposit condition.
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Assessment order set aside for missing signature and DIN, garnishee notice quashed under GST rules
Case-Laws
GST
The HC set aside the impugned assessment order dated 02.02.2022 and the related summary dated 01.02.2022 due to the absence of a mandatory signature and the non-inclusion of a DIN number, rendering the orders invalid. Consequently, the garnishee notice dated 15.05.2023, which was predicated on these defective proceedings, was also quashed. The matter was remanded to the assessing authority for fresh adjudication, ensuring the petitioner is afforded proper notice and opportunity to be heard, in compliance with statutory requirements under the GST Act.
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HC allows appeal filing delay due to rectification application; 15% pre-deposit required under ITC mismatch case rules
Case-Laws
GST
The HC condoned a 67-day delay in filing the appeal against the impugned assessment order arising from mismatched Input Tax Credit claims and excess ITC. The petitioner's pursuit of a rectification application was deemed a sufficient cause for the delay. Consequently, the 2nd respondent/Appellate Authority was directed to admit the appeal without raising limitation objections, subject to the petitioner depositing 15% of the disputed tax demand-comprising a 5% amount agreed upon and a 10% statutory pre-deposit-within two weeks. The petition was disposed of accordingly.
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Order set aside for lack of reasoned decision under Sections 73(9) and 75(6) of CGST Act, remanded for fresh hearing
Case-Laws
GST
The HC set aside the impugned order due to non-application of mind and violation of natural justice, finding that the adjudicating authority merely replicated the Service Tax notice without independently considering the Petitioner's detailed submissions or relevant precedents. The order failed to address the applicability of the Board Circular or explain the rejection of cited case law, contravening the requirements under Sections 73(9) and 75(6) of the CGST Act, which mandate reasoned decisions based on due consideration of representations. Consequently, the matter was remanded for a fresh adjudication within three months, ensuring proper evaluation and reasoned determination in compliance with statutory provisions.
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Assessment order quashed for AY 2017-18 due to non-compliance with Section 140 of TNGST Act, fresh adjudication ordered
Case-Laws
GST
The HC quashed the impugned assessment order for AY 2017-18 concerning the petitioner's Input Tax Credit claimed without adhering to Section 140 of the TNGST Act, 2017. The matter was remitted to the first respondent for fresh adjudication de novo on merits within six months, conditional upon the petitioner depositing 25% of the disputed tax amount as a pre-deposit. The quashed order shall be treated as a corrigendum to the preceding notice. The petition was disposed of accordingly.
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Impugned order quashed for non-application of mind; fresh hearing ordered under natural justice principles
Case-Laws
GST
The HC quashed the impugned order due to non-application of mind and violation of natural justice principles. The petitioner had deposited 10% of the disputed tax and recovered over 25% during proceedings. The matter was remanded to the respondents to pass fresh orders on merits and in accordance with law after affording the petitioner a hearing within three months. The petitioner is directed to file a reply to the show cause notice, treating the impugned order as an addendum, within 30 days of receiving this order. The petition was disposed of by remand.
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Supply of Stationery Without Payment Not a Taxable Supply Under Section 7 CGST Act, 2017
Case-Laws
GST
The AAR held that supply of stationery items without consideration does not constitute a supply under Section 7 of the CGST Act, 2017, as it is not made for consideration and thus falls outside the scope of business under Section 2(17). Supply of stationery or repair services for consideration qualifies as a taxable supply. Recovery of fines or penalties for loss or breach does not constitute a supply unless linked to contractual obligations, which are taxable per Schedule II. Disposal of waste or scrap and sale of tender forms or used vehicles are taxable supplies under Section 7. The applicant must apportion and reverse input tax credit on exempt supplies per Rule 42/43. Classification and exemption applicability could not be ruled on due to insufficient information.
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Writ Petition Dismissed on ITC Ineligibility; Natural Justice Followed, Alternative Remedies Available
Case-Laws
GST
The HC dismissed the writ petition challenging the impugned order regarding ineligible ITC availed and utilized. The court found that the proper officer had complied with principles of natural justice by granting a hearing and considering the petitioner's contentions. The petitioner admitted wrongful availment of ITC for April to December 2020, which was subsequently reversed. The authority noted the absence of evidence for receipt of goods or services and corresponding payment. The petitioner's claim that certain documents were not fully considered did not justify invoking extraordinary jurisdiction, especially given the availability of effective alternative statutory remedies. The petitioner was granted liberty to pursue such remedies in accordance with law.
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Garlic peeled, chopped, and packed classified under HSN 07032000; no GST liability as per Section 97(2)(a) CGST Act
Case-Laws
GST
The AAR declined to rule on whether peeling, chopping, and packing garlic constitutes manufacturing, as this issue is not within its jurisdiction under section 97(2)(a) CGST Act, 2017. However, it held that peeled, chopped, and packed garlic falls under tariff heading 07032000, covering fresh or chilled alliaceous vegetables, including garlic in various prepared forms such as peeled or chopped. The absence of evidence to show the product is preserved otherwise excluded it from heading 20055900. Consequently, the product is classified under HSN 07032000, and the applicant is not liable to pay GST on the said goods.
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No GST Exemption for Student Transportation and Catering Services Under Notification 12/2017-CT Rate
Case-Laws
GST
The AAR held that the applicant is ineligible for exemption under serial no. 66(b)(i) & (ii) of notification No. 12/2017-CT (Rate) for transportation and catering services provided directly to students, as the consideration was received from students and not from the educational institution. Consequently, the services are not deemed to be provided to the school, failing the primary condition for exemption. The authority further declined to address the question of refund of tax paid on such services in earlier years, as it falls outside the scope of subsection 97(2). Therefore, the applicant cannot claim exemption or refund under the specified notification for the impugned services.
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Job work on metallic film rolls not classified as textiles; GST rate fixed at 12% under serial No. 26(id)
Case-Laws
GST
The AAR held that job work involving cutting of metallic film rolls used for zari/metallic yarn does not qualify as textile or textile products under chapters 50 to 63 of the CTA '75, as the applicant failed to prove the classification. Consequently, the benefit of concessional GST at 5% under serial No. 26(i)(b) was denied. The job work falls under serial No. 26(id), attracting GST at 12%. The applicant's invoicing at 12% GST aligns with this classification, and the higher rate under general job work category at 18% is inapplicable since the clients are registered persons under GST. Thus, the correct GST rate for the service is 12%.
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Penalty under Section 27(3) TNVAT Act for ITC reversal must follow latest Circulars and proper factors
Case-Laws
GST
The HC held that the penalty imposed under Section 27(3) of the TNVAT Act, 2006, for reversal of ITC due to mismatched returns was improperly determined without regard to relevant factors and applicable Circulars. The Tribunal erred by relying on an outdated Circular, failing to consider the subsequent Circular No.5/2021 issued pursuant to this Court's directive mandating a mechanism for return reconciliation. As the assessment and first appellate orders predated these developments, the HC found merit in remanding the matter to the assessing authority for fresh adjudication in accordance with the latest Circular. The question of law was resolved in favor of the State, endorsing the remand for reassessment consistent with current procedural guidelines.
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HC limits GST cancellation to Show Cause Notice date, overturns retrospective cancellation from 2017 under Section 29
Case-Laws
GST
The HC quashed the impugned final order of GST cancellation dated 6 September 2024, allowing the petition. The court held that since the taxpayer was found non-existent at the principal place of business during physical verification, retrospective cancellation from 1 July 2017 was inappropriate. Relying on precedent, the HC modified the cancellation date to 4 September 2021, the date of issuance of the Show Cause Notice, recognizing that the petitioner did not intend to continue business or registration. Consequently, the retrospective cancellation was set aside, and the GST registration cancellation was limited to the date of the Show Cause Notice.
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Demand orders set aside for violating natural justice; fresh reply allowed under GST rules 16(4)
Case-Laws
GST
The HC set aside the impugned demand orders and remanded the matter to the Adjudicating Authority due to violation of natural justice principles. The Court held that the SCN, issued prior to changes in the GST portal making the 'Additional Notices Tab' visible, was not properly communicated to the Petitioner, depriving them of a fair opportunity to respond. Consequently, no reply was filed by the Petitioner. The matter was remitted for fresh consideration, allowing the Petitioner thirty days to file a reply to the SCN, ensuring compliance with procedural fairness. The petition was disposed of accordingly.
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Order quashed for defective service of Show Cause Notice under Section 169 CGST Act; natural justice principles upheld
Case-Laws
GST
The HC quashed the impugned order due to defective service of the Show Cause Notice (SCN), which was only uploaded on the GST Portal without physical service, depriving the petitioner of an opportunity to reply. The Court held that mere upload on the portal does not constitute effective service if no response is received, and the issuing officer must explore alternative modes of service as per Section 169 of the CGST Act, such as RPAD, to ensure compliance with natural justice. The impugned order was found to be passed without application of mind and violated natural justice principles. The matter was remanded to the respondent for fresh consideration without imposing any deposit condition on the petitioner.
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Regasification of Third-Party LNG as Job Work Under Section 2(68) CGST Act, Taxable at 12%
Case-Laws
GST
The AAR held that the service of regasification of LNG owned by a third party, provided through an intermediary under contractual arrangements, constitutes job work within the meaning of section 2(68) of the CGST Act, 2017. The applicant acts as a job worker for the owner of the goods, without holding ownership. The service is classifiable under serial no. 26(id) of notification No. 11/2017-CT (R) and is subject to GST at 12%. The ruling confirms that the activity is a back-to-back job work arrangement, and the applicable tax treatment aligns with the prescribed classification for such services.
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Interest and costs from arbitration awards before GST are not taxable under Schedule II, clause 5(e)
Case-Laws
GST
The AAR held that the amounts received as interest and costs awarded under arbitration do not constitute a supply liable to GST, as the transactions relate to the pre-GST period and fall outside the scope of Schedule II, clause 5(e). The work contract lacked any penalty, compensation, or interest recovery provisions for delayed payments. Consequently, the applicant is not obligated to remit GST on the arbitration-awarded interest and costs. Other related contentions were deemed inapplicable.
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HC defers ruling on Section 168A GST Act validity, awaiting Supreme Court decision on identical issues
Case-Laws
GST
The HC declined to adjudicate the constitutional validity of Section 7 of the Taxation and Other Laws (Relaxation and Amendment) Act, 2020, introducing Section 168A in the GST Act, and the related Notifications Nos. 9 and 56 of 2023, as identical issues are pending before the SC. Exercising judicial discipline, the HC refrained from expressing any opinion on the vires of Section 168A or the challenged notifications. The HC directed that the petition be governed by the forthcoming SC judgment, which shall be binding on the parties. Consequently, the petition was disposed of without a substantive ruling on the merits.
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Section 74 CGST Act Misapplied Without Fraud; Interim Relief Granted for Prepaid GST Liability Dispute
Case-Laws
GST
The HC held that the authorities improperly invoked Section 74 of the CGST Act, 2017, as the petitioner had already discharged the GST liability with interest before the show-cause notice issuance. The court emphasized that Section 74 applies only in cases involving fraud, willful misstatement, or suppression of facts, which were not established here. Given the vacancy in the State Tribunal and ongoing similar disputes in other High Courts and the Supreme Court, the HC found sufficient grounds to grant interim relief to the petitioner. Consequently, the petition was admitted for hearing, acknowledging a prima facie case against the invocation of Section 74 under the present facts.
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Provisional Attachment Order Under Section 83(2) CGST Act Ceases After One Year, Bank Account Released
Case-Laws
GST
The HC held that the provisional attachment order issued under Section 83(2) of the CGST Act, 2017, ceased to have effect after one year from the date of the order under Section 83(1). Since more than one year had elapsed since the impugned order dated April 5, 2024, the attachment of the petitioner's bank account was no longer valid. Consequently, the HC quashed and set aside the provisional attachment order, allowing the petition and directing that the attachment on the petitioner's bank account shall not operate beyond the statutory one-year period.
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Section 161 CGST Order Set Aside for Lack of Hearing and Non-Speaking Reasons, Remanded for Fresh Consideration
Case-Laws
GST
The HC set aside the impugned rectification order under Section 161 of the CGST/DGST Act, finding it to be cryptic, non-speaking, and issued without affording the petitioner a hearing, thereby violating principles of natural justice. Although the Show Cause Notice and demand order were reasoned and a detailed reply was filed, the rectification order merely dismissed the application as “unsatisfactory” without reasons. The matter was remanded to the Adjudicating Authority for a de novo consideration of the rectification application, ensuring the petitioner is granted an opportunity for a proper hearing. The petition was disposed of accordingly.
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Writ Petition Under Article 226 Allowed Despite Alternative Remedy Due to Natural Justice Violation and Procedural Errors
Case-Laws
GST
The HC held that despite the availability of an alternative statutory remedy, the writ petition under Article 226 was maintainable due to violation of natural justice and non-application of mind in the impugned assessment order. The court found that the order ignored the petitioner's detailed reply and merely reiterated the show cause notice without proper consideration. Consequently, the impugned order and the related detailed order were set aside for being vitiated by procedural infirmities and lack of jurisdictional exercise. The petition was accordingly disposed of, affirming that exceptions to the rule of alternative remedy apply where there is an apparent error on the face of the record or a breach of natural justice.
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