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Allahabad High Court quashes GST registration cancellations for lack of reasoning, reinforcing the sanctity of natural justice in tax administration. #JusticePrevails #GSTLaw #RightToReason #TaxJustice Case Summary: Petitioner disputed GST registration cancellation due to lack of reasoning. Dispute involved contradictory statements in the order about petitioner's response to a notice, leading to legal contention under Uttar Pradesh Goods and Services Tax Act, 2017. Issue: Was the GST registration cancellation valid without proper reasoning and application of mind, and in compliance with natural justice and constitutional mandates? Held: Court found orders lacking reasoning, violating the petitioner's rights. Orders set aside, authority to review with the petitioner's response opportunity. Title: Sachin Kaushal vs State of Uttar Pradesh Court: Allahabad High Court Citation: Writ Tax No. - 1275 of 2023 Dated: 13-Feb-2024

Hello Connections, "🚨 Landmark Ruling: Fair Notice Beyond the GST Portal!" Here’s a key legal update in GST compliance and assessee rights: 📢 Important Legal Update: Assessee’s Rights Post-GST Registration Cancellation: In a recent judgment by the Allahabad High Court (Ahs Steels v. Commissioner of State Taxes), it was established that once a GST registration is cancelled, simply uploading a show-cause notice (SCN) on the GST portal does not suffice as proper service. The court ruled that the assessee is not obligated to check the GST portal after cancellation, and alternative service methods must be used to ensure fair notice. This decision highlights a critical aspect of natural justice in the GST regime, reinforcing that proper notification must be served beyond online posting alone. This ruling is a valuable reminder for tax professionals and businesses alike on the importance of adherence to fair practices in compliance and the role of regulatory advisors in safeguarding procedural rights. Sumit Kherajani & CA Dharmesh Suthar, would love to hear your thoughts on this significant ruling! #CA #GSTUpdate #TaxCompliance #NaturalJustice #RegulatoryAffairs #BusinessCompliance #LegalEagle #CaRaghav #RJACA

*ITC is a Statutory right and not a fundamental right*✅ *MP High Court* In the case of M/s Chirtantan Enterprises LLP v. Commissioner CGST and Central Excise, the Madhya Pradesh High Court dismissed a writ petition from a construction company regarding the Input Tax Credit (ITC) claim on goods used for constructing a building intended for leasing. The court referred to the Supreme Court case of Chief Commissioner of Central Goods and Services v. M/s. Safari Retreats Private Limited, which upheld the constitutionality of Sections 17(5)(c) and 17(5)(d) of the CGST Act, asserting that these sections specify that ITC is not available for works contract services related to the construction of immovable properties, barring designated exceptions. The petitioner had constructed a building to lease it to a school and had claimed ITC on goods used during construction. However, following summons from the Directorate General of GST Intelligence (DGGI), the petitioner was made to reverse a significant amount of ITC, leading to the issuance of a show-cause notice for payment of penalty and interest. The key constitutional issues regarding the ITC entitlement were addressed, emphasizing that ITC is a statutory right rather than a fundamental one. The court established that the construction of a building could qualify as "plant" under certain conditions depending on its role in the registered person’s business, but such interpretations need exact factual analysis. Cases that had previously read down the provision were remanded for further examination. Overall, the case reinforced the stringent conditions surrounding ITC claims under the GST framework, particularly in managing construction-related expenses. *Compiled by* *CA.Galib A.Mirza* *Partner - Tax Litigations* *Mirza Kotkar & Co.,* *Chartered Accountants* *Mob 7709873587* #GST #InputTaxCredit #ITC #TaxCompliance #TaxReform #GSTITC #TaxPlanning #TaxBenefits #BusinessFinance #TaxUpdates #GSTCompliance #Accounting #TaxConsulting #Finance #BusinessTax #TaxProfessionals

🔥 High Court Grants Interim Relief in GST Property Attachment Case The Andhra Pradesh High Court has provided significant clarity in a case involving property attachment and auction proceedings under the GST framework. Key Highlights: ➡️ Tax authorities issued attachment and auction notices for properties purchased by the assessees, aiming to recover GST dues from the vendor. ➡️ The authorities argued that these transactions were sham and void under Section 81 of the CGST Act. ➡️ The court observed that Section 81 cannot be invoked without a competent authority first determining the nature of the transactions. ➡️ It was further noted that the CGST Act lacks machinery provisions to make such determinations. ➡️ An interim stay was granted on attachment and auction proceedings, conditional on the assessees not alienating the property during the pendency of the case. Case Reference: Velagala Lakshmi v. State of Andhra Pradesh Writ Petition No. 22596 of 2024 This ruling underscores the importance of procedural safeguards and highlights gaps in the GST legal framework when dealing with property transactions. #GST #GSTUpdate #TaxLaw #GSTCaseLaw #LegalUpdate #IndirectTax #Taxation

📢HC Gauhati: Grants Stay on Demand Premised on DRC-01, Unsigned Documents on GST Portal Veerprabhu Auto Pvt. Ltd. vs. The State of Assam & Ors. Facts of the Case Issue: ▪The Revenue issued a demand notice amounting to approximately Rs. 10.29 crores against the assessee for an alleged excess claim of Input Tax Credit (ITC) under section 16(4) of the CGST Act. ▪The demand was based on a notice that the petitioner claimed was a summary rather than a proper show cause notice as required under section 73 of the CGST Act read with Rule 142 of the CGST Rules. The petitioner's counsel argued several legal points: ▪Cited the doctrine of Res Judicata, claiming that scrutiny under section 61 of the CGST Act had concluded and any further re-examination on the same issues was barred. ▪Highlighted that documents uploaded on the GSTN portal were unsigned, and no valid order had been served on the assessee. ▪Argued that DRC-01 and its annexures could not substitute a complete show cause notice. ▪Asserted that uploading documents on the GSTN portal merely serves as communication and cannot substitute the legal requirement of signed documents for validity. ▪The counsel for the petitioner secured a stay on the demand order, emphasizing that the unsigned documents and procedural lapses undermined the validity of the demand. Court Judgement Reasoning: ▪The Court found that prima facie, the provisions regarding issuance of the demand had not been adhered to by the respondents. ▪It acknowledged the petitioner's arguments regarding the inadequacy of the notice issued and the unsigned documents uploaded on the GSTN portal. ▪Emphasized that documents uploaded on the portal, lacking signatures, do not constitute valid orders in the eyes of the law. ▪Directed that the impugned order of demand shall remain stayed until further proceedings. Listed the matter for further hearing after a period of four weeks to allow for necessary adjudication. Conclusion The Gauhati High Court's decision underscores the importance of procedural compliance and adherence to legal requirements in tax proceedings. By granting a stay on the demand order, the Court upheld principles of natural justice and ensured that the petitioner's rights were protected pending further adjudication.

Kerala High Court Declares Rule 96(10) of CGST Rules Ultra Vires to Section 16 of IGST Act In a significant ruling in Vinayaka Cashew Company v. Union of India, the Kerala High Court struck down Rule 96(10) of the CGST Rules, 2017, for being ultra vires to Section 16 of the IGST Act, 2017. The contentious rule, implemented via Notification No. 53/2018-Central Tax, restricted IGST refund eligibility for exporters if they had procured supplies benefitting from certain notifications. The court observed that Section 16, which deals with zero-rated supplies, allows exporters a clear entitlement to refunds of IGST paid on exports without imposing restrictions on how input goods or services are sourced. The court noted that amendments to Rule 96(10) had progressively imposed conditions that contradicted the legislative intent behind Section 16, essentially denying exporters the rightful refund unless specific procurement criteria were met. By creating a disconnect between the IGST Act’s provisions and the rule, the regulation produced outcomes not intended by the legislature. This judgment is a thought-provoking precedent emphasizing the need to align delegated legislation (like CGST Rules) with the empowering statute’s intent. The court held that in the absence of express provisions in the IGST Act authorizing such restrictive rules, Rule 96(10) could not legally curtail the refund entitlement granted by Section 16. This ruling also highlights the acumen of the taxpayer’s counsel in questioning the legal validity of provisions that impact exporters’ rights. The ability to scrutinize legislative coherence and enforce taxpayer rights is crucial in tax litigation, especially when procedural rules appear to overstep statutory boundaries. #IGST #TaxLaw #CGST #HighCourt #Exporters #TaxCompliance #TaxLitigation #LegalPrecedent #LegislativeIntent #TaxpayerRights

In an important decision, Allahabad High Court holds that the burden to prove the eligibility of ITC under the GST law is on the taxpayer; relies on the Supreme Court judgement under the KVAT law in the case of Ecom Gill; lays down the need to substantiate the ITC claim’s genuineness along with evidence of actual physical movement of goods; and specifies that mere payments or invoices are not sufficient to discharge the burden of proof. The ruling emphasises the necessity for taxpayers to include evidence of actual receipt of goods and services with the documents laid out in the Supreme Court ruling, beyond just matching returns, thus necessitating a robust documentation process. Read more: https://bit.ly/3SWLVF3

📢HC Gauhati: Grants Stay on Demand Premised on DRC-01, Unsigned Documents on GST Portal Veerprabhu Auto Pvt. Ltd. vs. The State of Assam & Ors. Facts of the Case Issue: ▪The Revenue issued a demand notice amounting to approximately Rs. 10.29 crores against the assessee for an alleged excess claim of Input Tax Credit (ITC) under section 16(4) of the CGST Act. ▪The demand was based on a notice that the petitioner claimed was a summary rather than a proper show cause notice as required under section 73 of the CGST Act read with Rule 142 of the CGST Rules. The petitioner's counsel argued several legal points: ▪Cited the doctrine of Res Judicata, claiming that scrutiny under section 61 of the CGST Act had concluded and any further re-examination on the same issues was barred. ▪Highlighted that documents uploaded on the GSTN portal were unsigned, and no valid order had been served on the assessee. ▪Argued that DRC-01 and its annexures could not substitute a complete show cause notice. ▪Asserted that uploading documents on the GSTN portal merely serves as communication and cannot substitute the legal requirement of signed documents for validity. ▪The counsel for the petitioner secured a stay on the demand order, emphasizing that the unsigned documents and procedural lapses undermined the validity of the demand. Court Judgement Reasoning: ▪The Court found that prima facie, the provisions regarding issuance of the demand had not been adhered to by the respondents. ▪It acknowledged the petitioner's arguments regarding the inadequacy of the notice issued and the unsigned documents uploaded on the GSTN portal. ▪Emphasized that documents uploaded on the portal, lacking signatures, do not constitute valid orders in the eyes of the law. ▪Directed that the impugned order of demand shall remain stayed until further proceedings. Listed the matter for further hearing after a period of four weeks to allow for necessary adjudication. Conclusion The Gauhati High Court's decision underscores the importance of procedural compliance and adherence to legal requirements in tax proceedings. By granting a stay on the demand order, the Court upheld principles of natural justice and ensured that the petitioner's rights were protected pending further adjudication.

Recently, the Hon’ble Bombay High Court in a writ petition in L&T IHI Consortium vs Union of India and Ors dated 14th November 2024 held that the petitioner was entitled to avail GST Input Tax Credit on GST paid on advance amounts to its contractor, before the actual service was received by the petitioner from its contractor. The dispute had arisen under a contract between the petitioner (L&T IHI Consortium) and the Mumbai Metropolitan Development Authority (MMRDA) for development of Atal Setu - Mumbai Trans Harbour Link Project.  The Hon’ble High Court in the said ruling has laid significant emphasis on harmonious interpretation of taxing statutes and a judicious reading of the provisions under GST, which require the taxpayers to discharge GST at the instance of payment of ‘advance’ for services vis-à-vis the provisions which permit taking ITC only on actual receipt of goods/services.  Against this background, our Partner Stella Joseph, & Principal Associate Yash K Desai have co-authored an article titled “𝗚𝗦𝗧 𝗜𝗻𝗽𝘂𝘁 𝗧𝗮𝘅 𝗖𝗿𝗲𝗱𝗶𝘁 𝗼𝗻 ‘𝗔𝗱𝘃𝗮𝗻𝗰𝗲 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀’: 𝗥𝗲𝗰𝗲𝗻𝘁 𝗿𝘂𝗹𝗶𝗻𝗴 𝗼𝗳 𝘁𝗵𝗲 𝗛𝗼𝗻’𝗯𝗹𝗲 𝗕𝗼𝗺𝗯𝗮𝘆 𝗛𝗶𝗴𝗵 𝗖𝗼𝘂𝗿𝘁” published by Lexology which discusses the key facts, issues and findings by the Hon’ble Bombay High Court along with a few key takeaways for the taxpayers. Read the article here: https://lnkd.in/djua8W8V #ELPinsights #lexology #GST #inputtax #bombayhighcourt

🚨 Legal Update: Significant Ruling by Madras High Court in GST Adjudication Case In a notable judgment dated April 15, 2024, the Madras High Court held in the case of *TVL. Shakthi Mother and Child Care Rep by its Partner M.N. Ramesh vs. The Union of India, The Goods and Service Tax Council, The State Tax Officer Melur Assessment Circle, Madurai (W. P. (MD) No. 8571 of 2024 and W. M. P. (MD) Nos. 7807 and 7809 of 2024),* that an adjudication order passed under Section 73 of the TN-GST Act was unsustainable. 🔍 Key Points: The petitioner had submitted a detailed reply to the show-cause notice. The impugned order was passed without considering the petitioner’s reply. The court found this oversight significant and declared the impugned order unsustainable. 📜 Court's Decision: The impugned order was set aside. The case was remitted back to the tax authorities to pass a fresh order on merits and in accordance with the law within 8 weeks. The impugned order, which stands quashed, is to be treated as a corrigendum to the show-cause notice (DRC-01) dated 30.09.2023. This decision underscores the importance of due process and proper consideration of taxpayer responses in GST adjudications. It's a reminder for tax authorities to meticulously review and address the replies submitted by taxpayers before passing orders. #MadrasHighCourt #GST #TaxLaw #LegalUpdate #DueProcess #TN_GSTAct.