Part-117-One Pager Snapshot to Cases for Section 129 on Expired Eway Bill-Part II

-Is intent to evade relevant for Movement of Goods with Expired E-way Bill
-Can Penalty be dropped for failure to extend validity of Eway Bill
-What if vehicle intercepted with Cancelled E-way Bill

S.No

Case Subject

Case

Held

1

Is intent to
evade be seen
in case of
Movement of
Goods with
Expired E-way
Bill

Pushpa Devi Jain
v. Assistant
Commissioner of
Revenue, [2023]
149 taxmann.com
206 (Calcutta) (03-
03-2023)

Petitioner relied upon the judgement delivered by the Hon'ble Supreme Court in Satyam Shivam. The High Court observed that apart from a bald statement
that the vehicle broke down in the midst of the journey, there was no document in support of such statement. As long as the provision to revalidate the e-way
bill remained in the rule book, the same was required to be strictly complied despite the fact that the same may be practically difficult to implement. There is no
scope to exercise discretion at any stage and opportunity of hearing was given to allow the person in charge of the goods and/or the conveyance to produce
relevant documents to rebut the charge and not for examining the reason or ground for not being able to act in accordance with law. This Judgement was
reversed in Pushpa Devi Jain v. Assistant Commissioner of Revenue [2023] 152 taxmann.com 239 (Calcutta) (21-03-2023) has been discussed
hereinafter

2

Levy of Penalty
dropped for
failure to extend
validity of Eway
Bill

Pushpa Devi Jain
v. Assistant
Commissioner of
Revenue [2023]
152 taxmann.com
239 (Calcutta) (21-
03-2023)

The goods were detained as e-way bill had expired at 11:59 hours on 22nd April, 2022 and it had to be revalidated by 8 a.m. on 23rd April, 2022. However, said
date was a Saturday and the vehicle was intercepted at 8.52 a.m. There was no other allegation against the petitioner. The High Court considered the peculiar
facts of the case and observed that there was no lack of bona fide on the part of the appellant to state that there was wilful misconduct committed by the
appellant while transporting the goods. There was every possibility that even if an application was made for extension of the e-way bill within the time
permitted, 23rd April, 2022 being a Saturday, the e-way bill, in all probabilities, would not have been revalidated within the eight hours period.
Therefore, the appeal was allowed and the order was set aside by holding that considering the facts and circumstances of the case, the authority could not
have imposed penalty on the appellant

3

Intent to Evade
not to be seen in
cases wherein
goods
transferred to
another vehicle
and E-way Bill
not generated

Asian Switchgear
(P.) Ltd. v. State
Tax Officer [2023]
149 taxmann.com
120 (Calcutta) (03-
03-2023

The Court observed that the moment the goods are unloaded from the vehicle in respect of which e-way bill was generated and loaded in a different
vehicle without any e-way bill a statutory breach is committed, liable to be dealt with in accordance with the statute. It is not for the authority to
ascertain the reason as to why such action has been undertaken. There is no requirement in law to verify the reason for transporting goods in a vehicle
without a proper e-way bill. The Court further observed that decision of Hon’ble Apex Court in Satyam Shivam does not fit into the facts of the present case,
and accordingly, the ratio laid down therein cannot be made applicable in the facts and circumstances of the instant case. On the other hand, it relied upon the
precedence laid down by Hon’ble Apex Court in the matter of Guljag Industries wherein it was held that breach of statutory provision would attract levy of
penalty and the officer does not have any authority to either reduce or waive the penalty. They further held that decision of the same High Court in Ashok
Kumar Sureka cannot be treated as precedent. The High Court thereafter looking to admission of the petitioner that the vehicle in which the goods stood
transferred for being transported allegedly to the pre-recorded destination, did not have an e-way bill, held that Section 129 will be attracted in such a situation

4

No Intent to
evade to be
checked if
goods
transported
without valid Eway Bill

Abinash Kumar
Singh v. State of
West Bengal
[2023] 148
taxmann.com 393
(Calcutta) (03-03-
2023)

The Court observed that when the vehicle of the petitioner was intercepted, the same did not have a valid e-way bill. The e-way bill, on the basis of which the
goods were transported, expired prior to the vehicle reaching the final destination. Regarding no intent to evade being present, the High Court observed that if
the contention of the petitioner is to be accepted, then the authority will be flooded with a plethora of reasons from the errant transporters for not being able to
deliver the goods within time. In such a situation, the authority may exercise discretion either to accept or reject the ground put forth for explaining the delay in
transportation. The same will give rise to an anomalous situation when the authority may adopt pick and choose method as per their choice and tend to exercise
discretion arbitrarily. Law does not provide such unbridled power and right to the authority. In case of statutory violations, the statutory consequential steps are
required to be undertaken. Thus, it was held that as section 129 opens with a non obstante clause which lends a mandatory character to the same,
thus petitioner might or might not have been directly responsible for the delay in issuance of the gate pass, but he was certainly at fault.

5

No Intent to
Evade to be
established in
case of
movement with
Expired E-Way
Bill

Ashok and Sons
(HUF) v. Joint
Commissioner,
State Tax [2023]
147 taxmann.com
582 (Calcutta) (06-
02-2023)

The Court observed that petitioner's consignment was found lying within the territory of the state for more than three days. The E-Way bill had expired. The
driver of the vehicle stated that the vehicle suffered a breakdown. In support of his contention he failed to produce proper document. The petitioner had the
opportunity to extend the validity of the E-Way bill when the goods vehicle was allegedly had mechanical defect. The petitioner did not take any step for
extension of E-Way bill. The High Court also held that the ratio laid down in Hanuman Ganga Hydroprojects (P.) Ltd. (supra) and Ashok Kumar Sureka (supra)
are not applicable in the instant case. The High Court held that when the E-Way bill has not been extended it would be presumed that the consignment
was sent to the State of West Bengal and therefore, the respondent authority was lawfully permitted to impose penalty under section 129 as well as
the SGST as the goods were found to be detained in the territory of the State

6

Vehicle
intercepted with
Cancelled Eway Bill and
matter
remanded back
to establish
bonafide

Rumki Biswas v.
Senior Joint
Commissioner,
Commercial Taxes
[2023] 148
taxmann.com 359
(Calcutta) (01-12-
2022)

In the instant matter appellant had generated part A of the e-way bill on 22nd March, 2022 and part - B was generated on 24th March, 2022. However, since the
goods could not be loaded into the vehicle, the appellant cancelled part A of e-way bill dated 22nd March, 2022 and generated new part A e-way bill on 24th
March, 2022. When the vehicle was intercepted, the driver was carrying part B of e-way bill in respect of which part A has been cancelled. The High Court
observed that the short point, which was required to be canvassed by the appellant before the appellate authority was to establish the bona fides
of the appellant and to prove that there was no intention to evade payment of duty. Since this aspect was not adequately dealt with by the appellate
authority and taking note of the peculiar facts and circumstances arising in the case on hand, matter was remand back to the appellate authority
for a fresh consideration bearing in mind the conduct of the appellant. The appellant was directed to place all the materials in support of their claim
without unnecessary burdening the appellate authority

Part-116-One Pager Snapshot to Cases for Section -129 on Expired Eway Bill-Part I

-Goods could not be taken to the destination within the time for reasons beyond the control of the taxpayer
-Provisions of Section 126 applicable in case of Goods found to be moved with Expired E-way Bill
-Transporters are mandated not to transport goods basis expired E-Way Bills
-Goods unloaded after validity period although vehicle reached the destination within the prescribed time
-No Penalty on movement with Expired E-way Bill, if intent to evade absent
-Intent to Evade required to be established in case of expiry of E-way Bill due to circumstances beyond the control of the Taxpayer
-Movement of Goods with Expired E-way Bill falls within Section 122(1)(xiv) and leviable with a penalty of Rs 10000

S.No

Case Subject

Case

Held

1

Goods could not be
taken to the
destination within the
time for reasons
beyond the control of
the taxpayer

Assistant
Commissioner (ST) v.
Satyam Shivam Papers
(P.) Ltd. [2022] 134
taxmann.com 241 (SC)

Upon our having made these observations, learned counsel for the petitioners has attempted to submit that the questions of law in this case, as
regards the operation and effect of Section 129 and violation by the writ petitioner, may be kept open. The submissions sought to be made do not
give rise to even a question of fact what to say of a question of law. As noticed hereinabove, on the facts of this case, it has precisely been
found that there was no intent on the part of the writ petitioner to evade tax and rather, the goods in question could not be taken to the
destination within time for the reasons beyond the control of the writ petitioner. When the undeniable facts, including the traffic blockage
due to agitation, are taken into consideration, the State alone remains responsible for not providing smooth passage of traffic

2

Provisions of Section
126 applicable in
case of Goods found
to be moved with
Expired E-way Bil

Nirmal Kumar Mahaveer
Kumar v. Commissioner
of CGST [2023] 149
taxmann.com 128
(Delhi)

In the instant case subject goods were intercepted on 29-9-2020 at 3:40 AM, by which time the e-way bill had expired. The High Court observed
that the order was passed on the same date on which SCN was issued i.e., 30-9-2020. Therefore, matter was remanded to take a fresh decision in
the matter, after giving the petitioner due opportunity to produce relevant material/evidence to establish its case, that the delay in transporting the
goods to their destination was on account of genuine reasons. It was further directed by the High Court to the Proper Officer that while carrying
out this exercise, the concerned officer will also bear in mind, the provisions of section 126, which inter alia adverts to omission or mistake
in documentation which is easily rectifiable.

3

Transporters are
mandated not to
transport goods basis
expired E-Way Bills

C. Ranganathan v.
Commissioner of
Commercial Tax [2022]
139 taxmann.com 215
(Madras)

The petitioners are in the business of transportation of goods. They have to be careful and cautious while transporting goods. They cannot allow the
employer who employs them for transportation of the goods to evade tax. If the goods are being removed in the clandestine manner on the strength
either expired e-way bills or forged/fabricated invoice, the petitioners are not expected to transport the goods. At the same time, no useful purpose
will be served by allowing the vehicles to be detained any longer as the vehicles will loose their intrinsic value. There is also no evidence to suggest
that the respective petitioners conspired with the said M/s. Prime Gold International Private Limited to facilitate evasion of tax

4

Goods unloaded after
validity period
although vehicle
reached the
destination within the
prescribed time

State of Karnataka v.
Hemanth Motors [2021]
133 taxmann.com 323
(Karnataka)

It was argued by the Department that unloading was not done until 5.00 p.m. on the next day and therefore, the goods cannot be transported without
seeking extension of validity period of E-way bill. It was further contended that E-way bill for all practical purposes had expired on the midnight of 1-
1-2019 and therefore, it was incumbent upon taxpayer to seek extension of validity of said E-way Bill as provided under the proviso to rule 138(10).
The High Court observed that the Single Judge in his order has clearly stated that the conveyance had reached the destination on 1-1-
2019 at 11.00 p.m. which was well within the prescribed validity period under the E-way bill. The contention of the authorities that the
consignment was being delivered on 2-1-2019 and therefore, the goods cannot be transported cannot be acceded to. The materials on
record clearly indicate that the action by the authorities was taken at the destination and not during transit and therefore, an inference has to drawn
that the conveyance had reached the destination well within the subsistence of the valid period stipulated under the E-way bill. Thus, the High Court
declined to interfere with the order of the learned Single Judge

5

No Penalty on
movement with
Expired E-way Bill, if
intent to evade
absent

Balaji Steel Rolling Mills
Ltd. v. State of Tripura
[2023] 147
taxmann.com 417
(TRIPURA)

E-Way bills' were generated on 02-02-2020 which were valid upto 15-2-2020. But owing to some unforeseen circumstances, the movement
of the said vehicles was delayed. The said vehicles reached Churaibari on 17-2-2020. Claiming 'e-Way bills' have expired, GST authoritiesimposed duty with penalty. High Court allowed the petition holding that 'e-Way bills' had expired during the transit and the petitioner was
not able to ask for its renewal to the competent authority when vehicle entered into the territory of the State of Tripura. In view of the said
fact, order dated 6-4-2021 passed by the Appellate Authority was held not to be proper and was be set aside

6

Intent to Evade
required to be
established in case of
expiry of E-way Bill
due to circumstances
beyond the control of
the Taxpayer

NE Equipment
Solutions Pvt. Ltd. v.
State of Tripura [2022]
138 taxmann.com 96
(TRIPURA)

The High Court observed that vehicle arrived at Churaibari check post carrying proper e-way bill and within the validity period of the eway bill and the validity expired on account of unforeseen and unexpected delay in crossing the check post. The issue was cleared nd
the process, however, took more than 24 hours and in the meantime, the validity of the e-way bill expired. Though petitioner generated a
new e-way bill, the GST department of the State was not prepared to accept it. High Court held that allowing the department to detain the
machinery would be wholly impermissible. The fault of the petitioner if at all was rather technical. The tax authorities must make a clear distinction
between deliberate tax evasion and technical or minor defects which manifest no intention to evade tax. When IGST liability has been
fully discharged, no intention can be attributed on part of the petitioner to evade tax., High Court thus allowed the machinery to be released
upon undertaking being filed by petitioner that subject to appeal and further right to challenge, if liability is crystallized, he would discharge the same

7

Movement of Goods
with Expired E-way
Bill falls within
Section 122(1)(xiv)
and leviable with a
penalty of Rs 10000

Sri Gopikrishna
Infrastructure (P.) Ltd.
v. State of Tripura*
[2021] 125
taxmann.com 291
(TRIPURA)

The competent authority detained goods of assessee under transport on plea that vehicle was carrying expired e-way bill and imposed a
tax of Rs. 3.56 lacs and penalty of Rs. 3.56 lacs (equivalent to tax payable) upon it. The High Court held that the breach falls within the
ambit of section 122(xiv) of the CGST Act and as such the petitioner is excisable to the penalty. The High Court further observed that so far
the penalty for an amount equivalent to tax is concerned those are for the incidents when the tax is sought to be evaded or not deducted under
section 51 etc and as such we are of the firm view that the Superintendent of State Tax has exceeded his jurisdiction while imposing the penalty. As
there is no dispute about the tax, we will not lay our hands on that aspect. The High Court set aside the order of penalty and directed the petitioner
to pay the sum of Rs. 10,000/- as penalty for the breach which is covered under section 122(xiv) of the CGST Act

Part-115-One Pager Snapshot to Latest Case- Commissioner, Customs Central Excise and Service Tax, Patna v. Shapoorji Pallonji & Company (P.) Ltd. [2023] 155 taxmann.com 303 (SC) (13-10-2023)

Although a Decision in Service Tax Regime but has the potential impact of invalidating the Circular in GST and also reflects to the fact that that law should be interpreted in the manner it should be rather than to reach a particular outcome as it did not yield intended results

S.No

Case

Held

1

Commissioner,
Customs Central
Excise and Service
Tax, Patna v.
Shapoorji Pallonji &
Company (P.) Ltd.
[2023] 155
taxmann.com 303
(SC) (13-10-2023)

Question before the Apex Court- Whether the educational institutions in question, viz. (i) the Indian Institute of Technology, Patna (“IIT Patna”, hereafter) and (ii) the National
Institute of Technology, Rourkela (“NIT Rourkela”, hereafter), are covered by the definition of “governmental authority” in Mega Service Tax Exemption Notification?
Relevant Definition in Notification- “(s) "governmental authority" means an authority or a board or any other body;
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by Government,
with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution.”
Use of “or” and “and”- In the opinion of Court, the word “or” employed in clause 2(s) manifested the legislative intent of prescribing an alternative. The word “or” in clause
2(s) was used to reflect the ordinary and normal sense, that is to denote an alternative, giving a choice; and, a different meaning cannot be assigned unless it leads to vagueness
or makes clause 2(s) absolutely unworkable. Thus, word “or” between sub-clauses (i) and (ii) indicate independent and disjunctive nature of sub-clause (i), meaning thereby that
“or” used after sub-clause (i) cannot be interpreted as “and” so as to tie it with the condition enumerated in the long line of clause 2(s) which is applicable only to sub-clause (ii).
Use of Semi Colon- The Court observed that use of a semicolon is not a trivial matter but a deliberate inclusion with a clear intention to differentiate it from sub-clause (ii).
Further, it was also observed on reading of clause 2(s) that while there was a semicolon after sub-clause (i), sub-clause (ii) closes with a comma. In the view of the Court, it
essentially supported the only possible construction that the use of a comma after sub-clause (ii) relates it with the long line provided after that and, by no stretch of imagination,
the application of the long line can be extended to sub-clause (i), the scope of which ends with the semicolon.
Held- The long line of clause 2(s) governs only sub-clause (ii) and not sub-clause (i) because of the simple reason that the introduction of semicolon after subclause (i), followed
by the word “or”, has established it as an independent category, thereby making it distinct from sub-clause (ii). If the author wanted both these parts to be read together, there
is no plausible reason as to why it did not use the word “and” and without the punctuation semicolon.
Cases Referred- Superintendent & Legal Remembrancer, State of West Bengal vs. Corporation of Calcutt- (1967) 2 SCR 170, UOI & Ors. vs. Ind-Swift Laboratories Ltd (2011)
4 SCC 635, Commissioner of Sales Tax, U.P. vs. Modi Sugar Mills Ltd (1961) 2 SCR 189, Utkal Contractors & Joinery (P) Ltd. vs State of Orissa (1987) 3 SCC 279, Green vs.
Premier Glynrhonwy Slate Co (1928) 1 K.B. 561, Sri Jeyaram Educational Trust vs. A.G. Syed Mohideen (2010) 2 SCC 513, Kantaru Rajeevaru vs. Indian Young Lawyers
Association & Ors (2020) 9 SCC 121, Girdhari Lal & Sons v. Balbir Nath Mathur (1986) 2 SCC 237
Interesting Contention by the Revenue- It was contended by the Revenue that the impugned judgment of Patna High Court carried the risk of unconditionally broadening the
coverage and scope of the exemption to include various public bodies, such as Telecom Regulatory Authority of India, Airports Authority of India, and public sector banks. These
entities could potentially claim exemptions under different clauses of the Exemption Notification, covering various services provided by a “governmental authority”. A lenient
interpretation of the term “governmental authority” could unfairly burden the exchequer.
Held by the Court- The Court held that authority having the competence to issue a notification completed its job by re-defining “governmental authority” and now it is a task
entrusted to courts to interpret. If legislature has expressed itself by making the laws and difficulties arise in interpreting what it has said, a legislature cannot be asked to sit to
resolve those difficulties. Merely because the statute does not yield intended or desired results, that cannot be reason for us to overstep and cross the Lakshman
Rekha by employing tools of interpretation to interpret a provision keeping in mind its outcome. Interpretative tools should be employed to make a statute workable and
not to reach to a particular outcome

2

Section 51 and N.
No. 50/2018-CT Dt.
13.09.2018. &
Interpretation in
Circular No. 76 Dt.
31-12-2018 contrary
to above decision

Relevant Definition- (a) an authority or a board or any other body, -
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government,
with fifty-one per cent. or more participation by way of equity or control, to carry out any function;
How the Circular Interpreted- It is clarified that the long line written in clause (a) in notification No. 50/2018- Central Tax dated 13.09.2018 is applicable to both the items (i)
and (ii) of clause (a) of the said notification. Thus, an authority or a board or any other body whether set up by an Act of Parliament or a State Legislature or established by any
Government with fifty-one per cent. or more participation by way of equity or control, to carry out any function would only be liable to deduct tax at source.

3

Interpretation by
AAR of definition of
Government Entity
in NHPC Ltd [2018]
100 taxmann.com 16
(AARUTTARAKHAND)
(22-10-2018)

Relevant Definition- "Government Entity" means an authority or a board or any other body including a society, trust, corporation,
(i) set up by an Act of Parliament or State Legislature; or
(ii) established by any Government,
with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local
authority.
How it was Interpreted- AAR observed that the condition of 90% or more participation by way of equity or control to carry out a function entrusted by the Central Government,
State Government, Union Territory or a local authority is relatable to only sub-clause (ii) of the definition of "Government Entity". This was held based on judgment of High Court
of Patna in the case of Shapoorji Paloonji & Company Pvt. v. CCE which has now been confirmed by the Hon’ble Apex Court

Part-114-One Pager Snapshot to Cases for Section 122, 125, 126 and 127 of CGST Act, 2017-Part I

-Rule 142(1)(a) is no manner in conflict with any provisions of the Act in view of powers conferred under Section 164
-No Penalty in the matter of Classification Disputes
-Non-mentioning of Vehicle Number in case of no intent to evade, is a procedural error
-No Interest and Penalty for Transitional credit which could not have been availed due to technical glitches on portal maintained by the Government
-To Levy Penalty U/Sec 122(2)(a), procedure U/Sec 73 is to be followed

S.No

Case Subject

Case

Held

1

Rule 142(1)(a) is
no manner in
conflict with any
provisions of the
Act in view of
powers conferred
under Section 164

Mahavir Enterprise
v. Assistant
Commissioner of
State Tax [2020] 117
taxmann.com 471
(Gujarat) (22-06-
2020)

It was contended that Rule 142(1)(a) travels beyond the provisions of the Act when it provides for procedure to issue Notice for Section 122. Thus, Rule
142(1)(a) deserves to be declared as ultra vires being in excessive delegation of the powers.
The Court observed that Section 164 provides for the power to make rules and confers power on the Central Government to frame the rules to make rules
generally to carry out all or any of the purposes of the Act. Thus Rule 142(1)(a) is valid and is no manner conflict with any of the provisions of the Act in
view of the powers conferred under Section 164. The challenge to the validity of Rule 142(1)(a) was denied.
Cases Referred- Registrar, Co-operative Societies v. K. Kunjabmu, AIR 1980 SC 350 and State of Nagaland v. Ratan Singh, AIR 1967 SC 212, St. Johns
Teachers Training Institute v. Regional Director, National Council for Teacher Education AIR 2003 SC 1533, Ajay Canu v. UOI, AIR 1988 SC 2027.

2

No Penalty in the
matter of
Classification
Disputes

Atlantic Care
Chemicals (P.) Ltd.
v. Superintendent
Central Tax &
Central Excise
[2023] 155
taxmann.com 3
(Kerala) (07-09-2023)

During assessment period from April 2020 to June 2021, petitioner manufactured hand sanitizers and classified under the Tariff heading 30049088 and
declared tax liability @ 12% applicable to medicament. However, later on 5-7-2022 action was initiated under section 74(1) by issuing a SCN that
classification was under Hand Sanitizers (alcohol based) under HSN 3808 exigible to GST @ 18%. In pursuant to the SCN, order was passed and petitioner
paid assessed amount along with interest. petitioner was not disputing the said liability, he was only aggrieved by the initiation of the penalty proceedings.
The court referred to the judgement in Chakkiath Brothers v. Assistant Commissioner [2014 (3) KLT 222], wherein it was held that for a mere dispute in
classification, no penalty proceedings can be initiated and Court observed that since in the present case also there was a dispute of classification and the
authority had not considered the said judgment. Thus, the matter was remanded back for a fresh order in accordance with law, after taking into consideration
the Judgment in the case Chakkiath Brothers v. Assistant Commissioner (supra).

3

Non-mentioning
of Vehicle
Number in case of
no intent to evade,
is a procedural
error

Novateur Electrical
and Digital Systems
(P.) Ltd. v. Additional
Commissioner of
State Tax [2023] 154
taxmann.com 637
(Punjab &
Haryana)(11-09-23)

n the instant case, vehicle number was not mentioned in Part-B of the Eway Bill however, All other documents were shown by the driver. Revenue
contended that E-Way Bill was generated without completely filling Part B and thus there was violation of the provisions of law.
The Court referred to Circular dated 14-9-2018 wherein Para (f) refers to error in one or two digits/characters of the vehicle no. while generating E-Way
Bill. The Court observed that case of petitioner falls under clause (f) as he did not mention vehicle no in part B and thus proceedings under section 129
should not have been initiated. Further, at the time of search of vehicle, Part B was not filled up but the time driver filled up Part B in the presence of the
Officer and hence there was no malafide intention on the part of petitioner. Thus, it was held that proceedings under section 129 should not have been
initiated, as per circular dated 14-9-2018). It was held that object of circular dated 14-9-2018 was that in case of circumstances as detailed in the circular,
which were procedural in nature and there no intention of misleading the transfer of goods, the proceedings should not be initiated under Section 129.

4

No Interest and
Penalty for
Transitional credit
which could not
have been availed
due to technical
glitches on portal
maintained by the
Government

Nithya Packaging
(P.) Ltd. v. Assistant
Commissioner of
GST and Central
Excise [2023] 154
taxmann.com 494
(Madras) (03-07-
2023)

Petitioner faced difficulty in transitioning ITC on capital goods and communicated with Department and officials named on Web Portal. However, he was
unable to transfer the transitional credit. Thereafter, petitioner decided to avail such Credit. The credit was confirmed by Sanction Order (Tran-1 Credit)
dated 20-2-2023. Meanwhile, proceedings were initiated to recover the amounts from the petitioner, which culminated in the impugned order. By the
impugned order dated 28-3-2023, officer had imposed penalty and interest on the petitioner under section 50 and Section 73(9) read with Section 122(2)(a).
The impugned order was passed as petitioner filed a revised return in terms of the decision of Bombay High Court in Chep India Private Limited v. Union
of India and others dated 27-6-2022 and decision of the Hon'ble Supreme Court in Union of India and another v. FILCO Trade Centre Private Limited dated
22-7-2022, claiming ITC, which was earlier sanctioned by the Sanction Order (Tran-1 Credit) dated 20-2-2023. The only point that arose for consideration
was whether petitioner could be mulcted with interest and penalty even though the credit which was taken was sanctioned and merely because the petitioner
had also filed returns to transition the same credit.
The Court observed that petitioner was entitled to Rs. 11,06,396/- on the eve of implementation of GST with effect from 1-7-2017 and by Sanction Order
(Tran-1 Credit) dated 20-2-2023, proper officer had confirmed that petitioner was entitled to the aforesaid transitional credit. Therefore, merely because
petitioner had filed subsequent return and had given up the same would not mean that petitioner could be subjected to pay interest and penalty. The
difficulty arose only on account of technical glitches in the web portal maintained by the Central Government at the time of implementation of GST. The
petitioner cannot be penalized as the credit itself was allowed after the implementation of GST by Sanction Order (Tran-1 Credit) dated 20-2-2023.
Therefore, order seeking to impose interest and penalty on the petitioner was held to be unsustainable and thus quashed

5

To Levy Penalty
U/Sec 122(2)(a),
procedure U/Sec
73 is to be
followed

Nandi PVC (P.) Ltd.
v. Union of India
[2022] 145
taxmann.com 4
(Andhra Pradesh)
(14-09-2022)

An Assessment Order was passed under Section 62 in Form GSTR ASMT - 13, dated 05.02.2019, demanding the Petitioner to pay tax with interest and
penalty. The penalty was levied under Section 122(2)(a) of the CGST Act, 2017. It was contended that, to impose penalty under Section 122 of CGST Act,
procedure under Sections 73 or 74 is required to be followed, for which a SCN has to be issued.
The Court observed that in order to impose penalty in terms of Section 122(2)(a) of the Act, the demand for recovery should be made following the
procedure under Section 73, in which case, the proper Officer shall issue a notice under Section 73 within three months prior to the time specified in Section
73(10). It appeared from the record that such a notice was not issued prior to passing of impugned order. Thus, order imposing penalty was set-aside and
matter was remanded back to the authority concerned

Part-113-One Pager Snapshot to the Latest Cases on Section 16(4), 107, 129 of CGST Act, 2017 and Section 10 of IGST Act, 2017

-Statement of the Driver for goods to be unloaded at other place
-Goods not enroute the correct route to destination
-Power to seize only to be exercised when goods not accompanying proper documents
-Tax paid under CGST and SGST cannot be claimed as ITC in IGST
-Mere declaration by supplier to treat tax paid under CGST and SGST as IGST not sufficient as Revenue already distributed
-Since invoice pertained to 17-18 but writ filed in 2021, claim of ITC barred by time limit provided in enabling provision in Section 16(4)
-When High Court, at outset, stated that petitioner had an alternative statutory remedy, it ought not to have proceeded to make observations on the merits

S.No

Section

Case Subject

Case

Held

1

Section
129

-Statement of the
Driver for goods to be
unloaded at other
place
-Goods not enroute
the correct route to
destination
-Power to seize only
to be exercised when
goods not
accompanying proper
documents

Om Prakash Kuldeep
Kumar v. Additional
Commissioner Grade-2
[2023] 155 taxmann.com
249 (Allahabad)

The Court observed that the goods in question were sold by the registered dealer along with genuine documents i.e. tax invoices
and e-way bills. At the time of interception it was alleged that driver of the vehicle made statement that goods were to be unloaded at
the place which is not mentioned in the tax invoice but at Mainpuri itself. But perusal of the statement of the truck driver, which was
prepared and uploaded by the revenue authority in GST MOV-01, it appeared that not a single word had been whispered in respect
of the goods in question to be unloaded at the place which was not shown in the tax invoice accompanying the goods.
The Court noted that it was alleged that since goods along with truck were not on the route of its destination, therefore, there was
intention to evade tax. The Court observed that under the GST Act, there was no specific provision which bound the selling dealer
to disclose the route to be taken during transportation of goods or while goods are in transit however there was a provision under VAT
Act to disclose the rout during transportation of goods to reach its final destination. Once the legislature itself in its wisdom had chosen
to delete the said provision, the Court opined that authorities were not correct in passing seizure order even if the vehicle was not on
regular route or on different route.
The power of detention as well as seizure can be exercised only when the goods were not accompanying with the genuine
documents provided under the Act. The genuineness of the documents has not been disputed at any stage. Observation/allegation
was made that at the time of interception/detention of the goods in question, the driver of the vehicle had only produced one tax invoice
and eway bill dated 16-3-2020 but none of the documents as prescribed under the Act was referred or brought on record before the
Court in support of the said contention. Once the documents accompanying the goods were found to be genuine the goods ought not
to have been seized.
Cases Referred- Gujrat High Court in Special Civil Application No. 19549 of 2021 (M/s Karnataka Traders v. State of Gujrat) decided
on 6-1-2022, Telengana High Court in W.P. No. 2869 of 2021, Vijay Metal v. Deputy Commercial Tax Officer, decided on 28-4-2021

2

Section
10 of
IGST
Act,
2017 and
Section
16(4) of
CGST
Act,
2017

-Tax paid under
CGST and SGST
cannot be claimed as
ITC in IGST
-Mere declaration by
supplier to treat tax
paid under CGST and
SGST as IGST not
sufficient as Revenue
already distributed
-Since invoice
pertained to 17-18 but
writ filed in 2021,
claim of ITC barred by
time limit provided in
enabling provision in
Section 16(4)

Vishwanath Iron Store v.
Union of India [2023] 155
taxmann.com 248 (Patna)

The petitioner firm was registered in the state of Bihar. They purchased goods in auction from East Central Railways. The invoice
levied CGST and SGST. The petitioner contended that when tax consultant was apprised of the delivery/sale invoice, it was pointed
out that since goods were taken possession of in Jharkhand and moved to outside the State, what was to be levied was IGST and not
CGST and SGST and in the above circumstances, the petitioner was denied the input tax credit, is the claim raised.
The Court observed that admittedly, goods were delivered at Jharkhand and sale was shown to be a local sale, as evidenced from
delivery/sale release order itself. If the petitioner had intended to move the material out of the State, the petitioner should have specified
it and also insisted that the sale be treated as an Inter-State one. The auction though conducted in Samastipur, the sale was to be
effected from Jharkhand and unless the sale occasioned the movement of goods outside the State, it could not be termed as an InterState sale. Further, there was absolutely nothing to prove in the writ petition as well that the movement of goods to the State of Bihar.
The mere statement of Railways that the invoice issued should be deemed to have been issued under the IGST Act, could not enable
the petitioner to seek input tax credit. The transaction between the Railways and the petitioner would not regulate the tax liability and
in any event, the tax levied and collected as CGST and SGST would have been credited to the respective head of account. There can
be no understanding between the parties to the transaction that what has been paid as SGST and CGST is to be deemed to be paid
as IGST without due compliance of the provisions of the taxation enactment. Such understanding cannot also regulate an input tax
credit without such credit being shown in the ledger account maintained by the assessee with the Department.
It was also noticed that the invoice was one issued in assessment year 2017-18. The petitioner had filed the writ petition in the year
2021 when the enabling provision in Section 16(4) for claiming input tax credit would not have been available in any event. The present
invoice is dated 23-10-2017 and hence, ITC was to be claimed before 28-11-2017 or furnishing of the annual return for the year 2017-
18, whichever is earlier. The Court thus held that there was absolutely no possibility of the ITC being availed of at this point

3

Section
107

When High Court, at
outset, stated that
petitioner had an
alternative statutory
remedy, it ought not to
have proceeded to
make observations on
the merits

Dhan Prakash Gupta v.
Central Goods and
Service Tax Department
[2023] 155 taxmann.com
227 (SC)

The High Court in the given matter had stated that petitioner had alternative remedy but also further stated that since material based
upon which assessment was completed was taken from URLs owned by petitioner and petitioner was also confronted with the material
so gathered and that material was, in any case, in public domain, therefore there was no justification in principles of natural justice
being violated.
The Apex Court held that when the High Court, at outset, stated that the petitioner had an alternative statutory remedy, it ought not
to have proceeded to make observations on the merits of the case and thereafter, state that the petitioner would not be precluded
from pursuing alternative remedies. It was further stated that any observation made on merits of the case in the impugned order shall
not come in the way of the appellate authority considering the case of the petitioner on merits

Part-112-One Pager Snapshot to the Latest Cases on Section 29, 30, 54, 75 and 129 of CGST Act, 2017

-Amendment to Rule 89(4)(C) to definition of Export would apply prospectively.
– Right for refund of the accumulated ITC stands crystalised on the date when subject goods are exported.
– ITC relatable to the turnover of a period must be ascertained in terms of the rules as in force during the said period.
-Notice issued with time, place and venue of hearing mentioning “NA” was contrary to provisions of Section 75(4).
-Seven Days for issuance of notice U/Sec 129(3) have to be calculated from the date of detention and not from the following date
-Reasons are heart and soul of the order and non-communication of same itself amounts to denial of reasonable opportunity of hearing

S.No

Section

Case Subject

Case

Held

1

Section
54

Amendment to Rule
89(4)(C) to definition
of Export would apply
prospectively.
- Right for refund of
the accumulated ITC
stands crystalised on
the date when subject
goods are exported.
- ITC relatable to the
turnover of a period
must be ascertained
in terms of the rules as
in force during the
said period.

Indian Herbal Store (P.)
Ltd. v. Union of India
[2023] 155 taxmann.com
189 (Delhi)

The bone of contention amended Rule 89(4)(C) w.e.f. 23-03-2020 wherein export turnover would mean the value, which is 1.5 times
the value of the similar goods domestically supplied by the same, or similarly placed supplier, was added as a condition for computing
the turnover of zero-rated supplies. Petitioner had filed refund applications for quarters comprising 1-10-2018 to 30-9-2019. The said
applications were rejected by orders dated 15-9-2020, 24-9-2020, 22-10-2020 and 5-11-2020. The said applications were rejected as
computation of eligible export turnover was not compliant with amended Rule 89(4)(C). Petitioner contended that Sub-rule (4)(C) of
Rule 89, which was substituted with effect from 23-3-2020, had no application for refund in respect of exports made prior to the said
date.
The Court observed that the right for refund of the accumulated ITC stands crystalised on the date when subject goods are exported.
This is also reflected in Section 54 of the CGST Act. In terms of Section 54(1) of the CGST Act, the application for refund is required
to be made "before the expiry of two years from the relevant date in such form and manner as may be prescribed". The Court further
observed that the expression 'turnover' must necessarily read to mean the period during which the turnover is affected, that is, the
date when the supplies are made. It would thus follow that ITC relatable to the turnover of a period must-unless it is indicated otherwise
either expressly or by necessary implication-be ascertained in terms of the rules as in force during the said period. Thus, it was held
that the appellate authority erred in applying Rule 89(4)(C) of the Rules as amended with effect from 23-3-2020 for computing the
export turnover for the purposes of determining the refund as claimed by the petitioner. The High Court further stated that We do not
consider it necessary to examine the challenge in view of the decision of the Hon'ble Karnataka High Court in M/s Tonbo Imaging
India Pvt. Ltd. v. Union of India and Ors., decided on 16-2-2023

2

Section
75

Notice issued with
time, place and venue
of hearing mentioning
“NA” was contrary to
provisions of Section
75(4)

Sumit Enterprises v.
State of U.P. [2023] 155
taxmann.com 190
(Allahabad)

Notice was issued under Section 74 wherein the date by which the reply was to be submitted was mentioned as 26.07.2021, however,
date of personal hearing, time of personal hearing and venue of personal hearing were not indicated and simply the word "NA" was
transcribed. Even in the reminder notice sent to the petitioner, in the column of date of personal hearing, time of personal hearing and
venue of personal hearing, "NA" was transcribed.
The Court observed that provisions of Section 75(4) was interpreted in Party Time Hospitality Prop. Smt. Punita Gupta Lko. v. State
Of U.P. & 2 Others (Writ Tax No.176 of 2023) decided on 28.08.2023 wherein it was held that compliance of Section 75(4) of GST
Act is mandatory. Thus, the Court quashed the order as it was contrary to the mandate of Section 75(4) and was violative of principles
of natural justice.

3

Section
129

Seven Days for
issuance of notice
U/Sec 129(3) have to
be calculated from the
date of detention and
not from the following
date

Tvl. V. V. Iron and Steels
v. State Tax Officer [2023]
155 taxmann.com 220
(Madras)

The goods/conveyance were intercepted on 30-8-2023 and order for physical verification/inspection of goods/conveyance and
documents was issued in Form GST Mov-02 on the same date i.e., on 30-8-2023. The notice was received by the petitioner on 8-9-
2023. The petitioner contended that the impugned notice in Form GST Mov-07 was issued beyond the period of limitation prescribed
under section 129(3). The revenue contended that the notice was dispatched to the petitioner through e-mail at about 5.54 p.m. on 7-
9-2023 and on the same date i.e., on 7-9-2023, the notice was also affixed on the vehicle.
The Court observed that provision of Section 129(3) has not used the expression "within seven days from the date of detention or
seizure". The language in Section 129(3) is clear. Notice specifying payment of penalty has to be issued within seven days of detention
or seizure of goods. Issuance of notice within seven days has to be calculated from the date on which seizure was to be effected and
not from the following date. Thus, the last date for issuance of the impugned notice would have expired on 6-9-2023. However, the
impugned notice has been dispatched through e-mail only on the following date i.e., on 7-9-2023 after the expiry of limitation.
Therefore, on this ground alone, the impugned notice was quashed

4

Section
29 and
Section
30

Reasons are heart
and soul of the order
and noncommunication of
same itself amounts to
denial of reasonable
opportunity of hearing

Suresh Industries v.
Superintendent Range VI
[2023] 155 taxmann.com
221 (Gujarat)

The petitioner stated that the reason given in the SCN was vague and did not refer to any particular facts so as to enable the petitioner
to give reply. The respondent never verified registered premises of petitioner and hence that ground mentioned in SCN was incorrect.
The Court observed that reasons are heart and soul of the order and non-communication of same itself amounts to denial of
reasonable opportunity of hearing, resulting in miscarriage of justice. Thus, it was held that by issuing a cryptic SCN, authorities had
violated the principles of natural justice. From SCN, reasons for cancellation were not decipherable and thus, it was set aside.
Cases Referred- Aggarwal Dyeing and Printing Works v. State of Gujarat., reported in [2022] 137 taxmann.com 332 (Gujarat), A.K.
Kraipak v. Union of India, (1970) 1 SCR 45. The Hon'ble Supreme Court vide judgments in the cases of Ravi Yashwant Bhoir v. District
Collector Raigad, (2012) 4 SCC 407, Sant Lal Gupta v. Modern Cooperative Grouop Housing Society Limited, (2010) 13 SCC
336; Kranti Associates Private Limited v. Masood Ahmed Khan, (2010) 9 SCC 496; Abdul Ghaffar v. State of Bihar, (2008) 3 SCC
258

Part-111-One Pager Snapshot to Latest Cases on Section 73, 75, 107, 140, 155, 169 and 171 of CGST Act, 2017

-SCN asking petitioner to pay dues instead of giving show cause is a minor mistake
-Order passed without serving notice as per Section 169(1)(b) and without considering business verticals set aside
-Order held invalid as it did not mention provision under which it was passed and had no discussion on merit
-Order passed basis on the reports never provided to assessee held to be invalid and all contentions by the petitioner to be considered and decided
-Order passed basis upon GSTR-3B and GSTR-2A held to be valid as assessee did not avail opportunity to discharge burden casted U/Sec 155
-Appellate Authority order binding upon the lower authority and appeal shall be filed if the same is not correct in view of the lower authority
-SCN mentioning “NA” against time, place and venue of hearing invalid

S.No

Section

Case Subject

Case

Held

1

Section
73

SCN asking petitioner
to pay dues instead of
giving show cause is a
minor mistake

Sansar Auto and Retail
(P.) Ltd. v. State Tax
Officer [2023] 155
taxmann.com 157
(Madras) (20-09-23)

GST DRC-01 was issued to petitioner and it was challenged it was not a SCN but an order as petitioner was asked to pay the dues.
The Court observed that a reading of impugned Notice indicated that respondent had asked the petitioner to pay the amount directly
instead of calling upon the petitioner to show cause as to how the amounts specified therein should not be demanded. It was held to
be a minor mistake as it gave an impression that it was an order. The Court disposed of the writ petition by directing respondent to
issue a corrigendum to the Impugned Notice in Form GST DRC-01.

2

Section
169

Order passed without
serving notice as per
Section 169(1)(b) and
without considering
business verticals set
aside

Tvl. Diamond Shipping
Agencies (P.) Ltd. v.
Assistant Commissioner
(ST) [2023] 155
taxmann.com 160
(Madras) (29-08-23)

Petitioner was having three business verticals of the same PAN, but respondents passed order without considering GSTR-9 and
GSTR-9C for the said three business verticals. Therefore, it was claimed that if an opportunity was granted, petitioner would explain
the same to the authorities. Moreover, without serving physical notice/order, impugned order was passed violating Section 169(1)(b).
The Court observed that the impugned order was passed without serving notice as per section 169(1)(b) and without taking into
account that petitioner was having three business verticals. Therefore, the Court quashed impugned order and directed the
respondents to grant an opportunity of being heard to the petitioner.

3

Section
140

Order held invalid as it
did not mention
provision under which
it was passed and had
no discussion on merit

Alutec Facades India (P.)
Ltd. v. Assistant
Commissioner (ST)
[2023] 155 taxmann.com
161 (Madras) (04-09-23)

Petitioner was sought to be denied Transitional Credit from VAT Returns by referring “second proviso to the TNGST Act 2017”.
The Court held that reading of the impugned order indicated that there was no clear discussion as to which provision was referred to
in the paragraph immediately following the table in the impugned order. There was also no discussion in the impugned order while
denying the amount of Input Tax Credit that was allegedly wrongly transmitted by the petitioner in Trans-1. Thus, impugned order was
set aside and the case was remitted back to the respondent to pass a fresh order on merits.

4

Section
171

Order passed basis
on the reports never
provided to assessee
held to be invalid and
all contentions by the
petitioner to be
considered and
decided

E-Homes Infrastructure
(P.) Ltd. v. Competition
Commission of India
[2023] 155 taxmann.com
162 (Delhi) (12-09-23)

The Court observed that the reports submitted by the DGAP, pursuant to which the impugned order was passed, were not provided
to the petitioner. It was also not disputed that the said reports were are not favourable to the petitioner. The petitioner had no
opportunity to address the issues raised in the said reports. The Authority had examined the reports submitted by the DGAP (copies
of which were not provided to the petitioner) and issued further directions for verification and investigation. The Authority had not
accepted petitioner's contention to close the proceedings. Thus, it was held that the impugned order was vitiated as it was passed
without following the principles of natural justice and the impugned order was set aside. It was further directed by the Court to the
Authority that it shall consider the contentions advanced by the parties and pass a speaking order because one of the petitioner's
grievances was that all contentions advanced by the petitioner were not considered and decided by the Authority.

5

Section
155

Order passed basis
upon GSTR-3B and
GSTR-2A held to be
valid as assessee did
not avail opportunity
to discharge burden
casted U/Sec 155

Ansil Ibrahim v. Assistant
Commissioner [2023] 155
taxmann.com 186
(Kerala) (25-09-23)

Petitioner was issued SCN under section 73(1). Petitioner did not reply to the said SCN, nor did petitioner appear for a personal
hearing. Assessing Authority verified ITC as per GSTR 2A and return as per GSTR 3B for 2017-18.
The Court observed that as the petitioner did not appear in pursuance of the SCN nor did he provide any document or evidence to
discharge his burden under section 155 of the GST Act, the Assessing Authority had no other material before them except for Form
GSTR 2A and GSTR 3B. Assessing Authority, therefore, denied the claim of ITC. If there was a difference between GSTR 2A and
GSTR 3B, then it was for assessee/dealer to prove his claim of ITC by leading cogent and credible evidence for his claim. The Court
thus held that when petitioner himself had given up his right to prove his claim, the Court cannot help such by entertaining writ petition

6

Section
107

Appellate Authority
order binding upon the
lower authority and
appeal shall be filed if
the same is not
correct in view of the
lower authority

Keysight Technologies
India (P.) Ltd. v. Assistant
Commissioner, CGST,
Range-V [2023] 155
taxmann.com 187
(Calcutta) (13-09-23)

Adjudicating Authority passed the impugned order on remand by higher authority by recording that order of the Appellate Authority
was not in accordance with law and he could not comply the order of the Appellate Authority and rejected petitioner's claim of refund.
The Court observed that such conduct of Adjudicating Authority was highly deprecable and if such stand was taken by an adjudicating
authority on his senior authority's order by contending that his officer's order was not correct and he would not obey and comply such
order, there would be administrative anarchy in Government offices and such conduct was also beyond norms of the quashi-judicial
authority's' function. If Adjudicating Authority was of the view that order of the Appellate Authority was not in accordance with law he
could have gone to further appeal. The impugned order was set aside and the matter was remanded back to the Adjudicating Authority

7

Section
75

SCN mentioning “NA”
against time, place
and venue of hearing
invalid

Brijesh Kumar Singh v.
State of U.P. [2023] 155
taxmann.com 188
(Allahabad)

SCN did give any opportunity of hearing to the petitioner by mentioning "NA" against column description "Date of personal hearing".
Similar endorsements were made against the columns for "Time of personal hearing" and "Venue where personal hearing will be
held". Thus, it was contended that the petitioner was completely denied opportunity of oral hearing before the Assessing Authority.
The Court referring to Section 75(4) held that once it is laid down that an assessee is not required to request for "opportunity of
personal hearing", it remained mandatory to afford such opportunity before passing an adverse order, even if petitioner may have
signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence.
Cases Referred- Bharat Mint & Allied Chemicals Vs. Commissioner Commerical Tax & 2 Ors., (2022) 48 VLJ 325, M/S Hitech Sweet
Water Technologies Pvt. Ltd. Vs. State of Gujarat, 2022 UPTC (Vol. 112) 1760.

Part-110-Snapshot to Legal Cases-

Whether a Notice served within limitation period was bad in law because assessee was asked to appear on a public holiday and although the said defect was cured by a subsequent letter (although issued after the limitation period) fixing the date of hearing on another date-Commissioner Of Sales Tax vs Paramount Industrial Stores 1976 384 STC 555 Bom

S.No

Relevant Matter

Held

1

Facts of the Case

On 29th March, 1956, assessee was served a Notice under section 15(1) of Bombay Sales Tax Act, 1956 directing the assessee to attend in person or by a legal practitioner
or by an agent authorised in writing at 11 a.m. on 19th April, 1956, at the place and address mentioned therein. The Sales Tax Officer by his letter dated 18th April, 1956,
served on the assessee and purporting to be in continuation of the said notice requested the assessee to attend his office on 24th April, 1956, at 11 a.m. instead of 19th
April, 1956, as the day on which the assessee were required to attend, 19th April, 1956, happened to be a public holiday. It was contended by the assessee that that the
notice served on 29th March, 1956, " was defective, as 19th April, 1956, was a public holiday.

2

Decision of Tribunal

The notice was defective because 19th April, 1956, which was the date fixed for hearing in the said notice, was a public holiday and the assessee was wrongly asked to
appear on a holiday. Tribunal held that the defect could not be cured after expiry of a period of five years from the end of assessment period on 31
st March, 1951, and hence
action taken to correct the same by way of the letter dated 18th April, 1956, was clearly beyond limitation

3

Contention of Revenue

Department contended that the notification issued did not in any manner prevent and prohibit public officers from working or performing their official duties on public
holidays. It was urged by him that there was nothing in law or by way of a binding order which prevented the Sales Tax Officer from directing the assessee to appear before
him on 19th April, 1956, and it was perfectly open to the Sales Tax Officer to proceed with the hearing on that date irrespective of whether the assessee appeared or not, and
all that the assessee could do was to apply, if they so thought fit, for an adjournment of the hearing which the Sales Tax Officer would have normally granted on account of
that day being a holiday.
All that was required was that notice should be issued within the prescribed time and it must contain all or any of the requirements which may be included in a notice under
sub-section (3) of section 14 of the said Act. Although it was agreed that for a notice under section 15 of the said Act to be a valid notice such notice must contain the date
on which the dealer was required to attend and the place at which he was required to attend. But, once some date and some place was specified in the notice, validity of the
notice would not be affected, although date or place might happen to be an impossible one on which it could not have been physically possible to hold a hearing. The said
notice must be regarded as valid as it did not in any manner mislead the assessee, nor were the assessee prejudiced, because they were, in fact, heard before the order of
reassessment was made

4

Whether Tribunal was
justified in holding that
notice served within
prescribed period was
bad in law because
assessee was asked to
appear on 19th April,
1956, being a holiday.

High Court observed that a notification to declare days set out therein to be public holidays was issued and 19th April, 1956, being on account of Ramnavami was also a
Holiday.
High Court observed that to hold that once the date is stated in the notice, however meaningless it might be, the requirement regarding the stating of the date has been
complied with would, reduce this requirement to a mere idle and meaningless formality. High Court cited an example stating that let us take a case where an assessee is
served with a notice under section 15 of the said Act and the date on which he is required to attend is given in the notice as 1st January, 1880, or let us say, 35th January,
1976, and there was no other indication as to what was the correct date on which he is required to attend. Such a notice would convey no information whatsoever to the
assessee concerned as to the date on which his attendance is required and, thus such notice cannot be treated on a better or higher footing than a notice which does not
contain a date of hearing at all

5

Even if notice was bad
in law, could the defect
be cured by letter dated
18th April, 1956, issued
by Sales Tax Officer,
fixing date of hearing
on 24th April, 1956.

The High Court observed that thus, even if an invalid notice under section 15 of the Bombay Sales Tax Act, 1956 was complied with by assessee, yet the defect cannot be
said to have been waived and proceedings taken pursuant to such a notice would be invalid.
In view of this, it was thus held that the defect in the notice could not be cured by reason of subsequent letter dated 18th April, 1956 and quite apart from this, and what was
even more important, was that the letter dated 18th April, 1956, was admittedly written and served on the assessee after the period of five years prescribed under section
15 of the said Act in the case of concealed income had already expired, and hence such an attempted correction could have no legal effect.

6

Cases Relied upon

Commissioner Of Income-Tax vs Ramsukh Motilal AIR 1955 Bom 227-If a notice under section 34 of the Income-tax Act, 1922, gave only six days to the assessee to
make a return under that section, the notice was clearly illegal and such illegality cannot be waived by the assessee and no consent can confer jurisdiction upon a court if
court had no jurisdiction, and if we take the view that the Income-tax Officer can have jurisdiction only provided he complies with the conditions laid down in section 34, then
no consent by the assessee or no waiver on his part can confer jurisdiction upon the Income-tax Officer. Thus, in that case assessee had actually made a return pursuant to
the invalid notice under section 34 and it was yet held that reassessment proceedings pursuant to the said notice were invalid. (This decision was approved by Supreme
Court in Y. Narayana Chetty & Another vs The Income-Tax Officer, Nellore Equivalent citations: 1959 AIR 213).
B.K. Gooyee vs Commissioner Of Income-Tax, AIR 1966 Cal 438-A notice issued under section 34 of the Indian Income-tax Act, 1922, which does not contain the
signature of the Income-tax Officer, who issues it, is invalid and, all proceedings taken in pursuance of such a notice are invalid.
Also Referred- Kulkarni v. Tribhovandas Bhimji Zaveri [1956] 7 S.T.C. 385 (Bom); Nyalchand Malukchand Dagli v. Commissioner of Income-tax [1966] 62 I.T.R. 10 (Guj)

Part-109-One Pager Snapshot to cases in Service Tax regime on invoking extended period-(Section 73 of Finance Act, 1994 which was similar to Section 73/74 of CGST Act, 2017)-Part-IV

-Availing of ITC cannot be termed as illegal when Tax was paid under RCM on services which were exempted from tax
-When relevant facts are in the knowledge of the authorities, when the first SCN was issued, the subsequent SCN cannot allege suppression of facts.
-Extended period not invokable when the relevant entry itself is subject matter of litigation at various Judicial Forums
-Initial burden is on department to prove that the situations visualised by the proviso existed. However, once it is discharged, burden shifts upon assessee
-When entire dispute is revenue neutral, there could be no intention to evade payment of duty

S.No

Case Subject

Case

Held

1

Availing of ITC cannot
be termed as illegal
when Tax was paid
under RCM on
services which were
exempted from tax

Petro Carbon &
Chemicals (P.) Ltd.
v. Commissioner of
CGST & CX, Haldia
[2021] 130
taxmann.com 252
(Kolkata - CESTAT)

The issue involved was whether appellant was entitled to Cenvat credit of Service Tax under Reverse Charge on services when as per lower authorities
the said services were exempted from levy of Service Tax.
The Tribunal observed that it was an admitted fact that the Appellant was not liable to pay Service Tax under RCM on the transportation of goods by
vessel services. However, the tax was paid and accordingly the Appellant had availed Cenvat credit of the same. Tribunal relied upon the judgement in
the matter of CCE & ST v. Tamil Nadu Petro Products Ltd. [C.M.A. No. 2939 of 2008, dated 4-9-2015, wherein it was held that If, upon a misconception
of the legal position, the assessee had paid the tax that he was not liable to pay and such assessee also happens to be an assessee entitled to certain
credits such as Cenvat credit, the availing of the said benefit cannot be termed as illegal. Tribunal by following the aforesaid judgement held that the
Appellant assessee cannot be asked to reverse the Cenvat credit availed on tax paid under Reverse Charge basis when the payment is not disputed.
Further, the Revenue was not able to prove beyond reasonable doubt, presence of fraud, collusion, wilful misstatement or suppression of facts on the
part of the appellant assessee. Therefore, imposition of penalty under section 11AC of the Act was held to be unwarranted.

2

When relevant facts
are in the knowledge
of the authorities,
when the first SCN
was issued, the
subsequent SCN
cannot allege
suppression of facts

Petro Carbon &
Chemicals (P.) Ltd.
v. Commissioner of
CGST & CX, Haldia
[2021] 130
taxmann.com 252
(Kolkata - CESTAT)

Appellant's unit was audited by the department during Jan 2009. Thereafter, two SCN vide SCN No.39/2007 dt. 05.03.2007 and SCN No. 143/2007,
dt. 23.08.2007 were issued for the period July, 2003 to March 2006 and April, 2006 to March, 2007. Proposed demands were confirmed by adjudicating
authority and same were duly paid. Thereafter, liability was worked out for April 2008 to December 2008 and that was also discharged. Thereafter,
although entire service tax demand from April, 2008 to December 2008 along with applicable interest was paid, appellant were issued SCN on 28.3.2011
invoking extended period. Department contended that under self-assessment scheme, it was onus of the tax payer to discharge liability without any flaw
and it is the responsibility to discharge tax and not take shelter under the same though blaming the department based on some procedural irregularities.
The Tribunal observed that this was a repetitive SCN and Supreme Court held in the case of Nizam Sugar Factory v. Collector of Central Excise 2006
(197) ELT 465, when relevant facts are in the knowledge of the authorities, when the first SCN was issued, the subsequent SCN cannot allege
suppression of facts. The ratio appeared to be applicable to the appellant's case. The penalty under Section 78 could be imposed only when there was
fraud or collusion or wilful misstatement or suppression of facts. In the instant case when tax along with interest stood paid, the need for imposition of
penalty was unsustainable. The appellant succeeded in so far as imposition of penalty under Section 78.

3

Extended period not
invokable when the
relevant entry itself is
subject matter of
litigation at various
Judicial Forums

Krishi Upaj Mandi
Samiti v.
Commissioner of
Central Excise &
Service Tax [2017]
84 taxmann.com 160
(New Delhi -
CESTAT)

The issue involved was regarding levy of tax on letting out of land and shops to traders and collection of allotment fee/lease amount for such land/shop.
The Tribunal held that tax entry "renting of immovable property service" itself was subject matter of serious litigation in various judicial forum. In fact,
the Hon'ble Delhi High Court in the case of Home Solutions (India) Retail Ltd. v. Union of India [2011] 13 taxmann.com 188/33 STT 95 held that the
activity of the rent per se cannot be subjected to service tax levy, whereas the activities in relation to renting are liable to service tax. The decision of
the Delhi High Court led to legislative changes including retrospective amendment of the concerned legal provisions in the Finance Act, 1994. In fact,
for non-payment of service tax under this tax entry, special provision was made under Section 80(2) to waive the penalties. Considering the background
and the status of the appellant as a Government Organisation, it was held that ingredients for invoking demand for extended period were not present.

4

Initial burden is on
department to prove
that the situations
visualised by the
proviso existed.
However, once it is
discharged, burden
shifts upon assessee

ICRA Ltd. v.
Commissioner of
Central Excise,
Chennai [2017] 79
taxmann.com 148
(Chennai - CESTAT

Tribunal observed that the proviso to Section 73(1) extended the period of limitation from six months to five years, therefore it had to be construed
strictly. The initial burden was on the department to prove that the situations visualised by the proviso existed. But once the department was able to
bring on record material to show that the appellant was guilty of any of those situations which are visualised by the section, the burden shifted and then
applicability of the proviso had to be construed liberally. When the law requires an intention to evade payment of duty then it is not mere failure to pay
duty. It must be something more. That is, the assessee must be aware that the duty was leviable and it must deliberately avoid paying it. The word
'evade' in the context means defeating the provision of law of paying duty. It is made more stringent by use of the word 'intent'. In other words the
assessee must deliberately avoid payment of duty which is payable in accordance with law. Thus, where there was scope for doubt whether case for
duty was made out or not the proviso to Section 11-A of the Act would not be attracted.

5

When entire dispute
is revenue neutral,
there could be no
intention to evade
payment of duty

Reliance Industries
Ltd. v.
Commissioner of
Central Excise &
Service Tax LTU,
Mumbai [2016] 72
taxmann.com 6
(Mumbai - CESTAT)

Tribunal observed that entire dispute being revenue neutral, there could be no intention to evade payment of duty and consequently extended period
of limitation was per se not invokable. In case where credit is available to an assessee itself it cannot be said that there is any intention to evade payment
of duty, which is a pre-requisite for invoking the extending period of limitation. In the instant case, if any tax was payable, it could have been available
immediately to Appellant, thereby rendering entire dispute revenue neutral. Thus, invocation of extended period of limitation was clearly not justified.
Cases Referred-Reliance Industries Ltd. v. CCE & C 2009 (244) ELT 254 (Tri. - Ahd.), CCE & C v. Indeos ABS Ltd. 2010 (254) ELT 628 (Guj.), Mafatlal
Industries Ltd. v. CCE 2009 taxmann.com 493 (Ahd. - CESTAT); affirmed by the Apex Court by dismissing the Civil Appeal reported in 2010 (255) ELT
A77 (SC), Nirlon Ltd. v. CCE [2015] 58 taxmann.com 28/51 GST 177 (SC

Part-108-One Pager Snapshot to cases in Service Tax regime on invoking extended period-(Section 73 of Finance Act, 1994 which was similar to Section 73/74 of CGST Act, 2017)-Part-III

-Extended period not invokable for payment of tax under RCM as revenue received entire tax i.e. partly from recipient and partly from supplier and confirming liability would tantamount to receiving double tax on same transaction.
-Since Finality to Tax liability accorded after substantial delay by CBIC Circular, therefore extended period not invokable
-No Levy of Penalty -presence of bonafide belief
-Tax paid alongwith Interest at the time of audit and before SCN
-Mere allegation that non-payment coming to notice of the department only after gathering intelligence and discreet investigation conducted by the head-quarters preventive unit not held to be sufficient for invoking Extended Period

S.No

Case Subject

Case

Held

1

Extended period not
invokable for
payment of tax under
RCM as revenue
received entire tax i.e.
partly from recipient
and partly from
supplier and
confirming liability
would tantamount to
receiving double tax
on same transaction

Mahatma Gandhi
University of
Medical Sciences
and Technology v.
Commissioner
Central Excise &
Central Goods and
Service Tax, Jaipur
[2021] 132
taxmann.com 97
(New Delhi -
CESTAT)

During the scrutiny of ST-3 Returns, Department noticed that appellant had paid Service Tax on 75% of gross service value under RCM as per the
provisions of Notification No. 30/2012-ST dated 20th June, 2012. However, appellant was liable to pay Service Tax under RCM on 100% of gross
service value in terms of the aforesaid Notification being amended vide Notification No. 07/2015-ST dated 1-3-2015 with effect from 1-4-2015. However,
Service Tax on balance 25% amount of service value stands already paid by the service provider.
Tribunal Observed that, the period in dispute was exactly from the date of coming into effect of amendment i.e. 1-4-2015 till the end of the said
Financial Year i.e. March, 2016. Unawareness of the appellant to such a sudden change to be implemented in so proximity of time of its coming into
effect could not be ruled out. Consequently, it was held that non-payment by the appellant for the said period was merely due to the bonafide belief of
his liability to the extent of paying the service tax at 75% of the service value. Once there was no apparent malafide on part of the appellant and in view
of the aforesaid bonafide belief of the appellant, fastening the allegations as that of concealment fraud and suppression were held to be highly unjustified.
Tribunal further observed that there was no denial on part of the Department that the balance service tax on 25% value of the service was already
been by service provider. The Department, thus, received 100% tax amount on the impugned transaction. Confirming such liability again under the
pretext of the amendment of the applicable Notification would be nothing but would amount to receiving tax twice for the same transaction. Thus, the
appellant liabilities stood discharged and the demand should not have been confirmed. Above all, Department was not entitled to invoke the extended
period of limitation for no willful suppression on part of appellant that too with intent to not to pay duty (full duty already stands paid).
Cases Referred- Pushpam Pharmaceuticals Co. v. Collector of Central Excise 1995 (78) ELT 401, Continental Foundation Jt. Venture v. CCE 2007
taxmann.com 532

2

Since Finality to Tax
liability accorded after
substantial delay by
CBIC Circular,
therefore extended
period not invokable

Autobahn
Enterprises (P.) Ltd.
v. Commissioner of
Service Tax [2022]
136 taxmann.com 73
(Mumbai - CESTAT)

Tribunal observed that the finality was accorded to tax liability by circular no.87/05/2006-ST dated 6th November 2006 of CBEC and therefore in view
of the circumstances and the stand taken by the Tribunal in several decisions, invoking of the extended period for the purpose of imposition of penalty
was held not to be sustainable. Accordingly, the penalty imposed under section 78 of Finance Act, 1994 was also set aside

3

No Levy of Penalty -
presence of bonafide
belief
-Tax paid alongwith
Interest at the time of
audit and before SCN

Fairfest Media
Ltd. v. CGST &
Excise [ST Appeal
No. 78619 of 2018,
dated 19-6-2019

Appellant stated that service tax along with interest has already been paid by the appellant before issuance of SCN.
Tribunal stated that the contention of the appellant was that he bona fidely believed that he was not liable to pay service tax but during the audit, the
audit party informed him that he was liable to pay service tax, then he immediately paid the entire service tax along with interest. Except mere allegation
of suppression, Department did not bring any material on record to prove that there was suppression and concealment of facts to evade payment of
tax. Consequently, imposition of penalty under section 78 of the Act was not justified and bad in law. Moreover, in the impugned order, the learned
Commissioner (Appeals) did not record any finding on suppression of facts by the appellant with an intention to evade tax.

4

Mere allegation that
non-payment coming
to notice of the
department only after
gathering intelligence
and discreet
investigation
conducted by the
head-quarters
preventive unit not
held to be sufficient
for invoking Extended
Period

Vinoth Shipping
Services v.
Commissioner of
Central Excise &
Service Tax [2021]
132 taxmann.com
275 (Chennai -
CESTAT

On the ground of limitation, it was observed by the Bench that during the relevant period, the issue as to whether a sub-contractor has to pay Service
Tax separately even when the main contractor had discharged Service Tax on the very same services was subject matter of litigation before various
fora. In the decisions of Semac (P.) Ltd. (supra), Shivhare Roadlines (supra) and Urvi Construction (supra), the Tribunal had held that sub-contractors
are not liable to pay Service Tax. There were conflicting views and the issue was referred to Larger Bench. In Max Logistics Ltd. v. CCE [Final order
No. 53175/2016, dated 23-8-2016].
Tribunal observed in the SCN, that no positive act of wilful suppression/mis-statement was alleged on the part of assessee. SCN merely stated that:
"…As the non payment/non-registration came to the notice of the department only after gathering intelligence and discreet investigation conducted by
the head quarters preventive unit, it appears that extended period of limitation is applicable to the facts of the case for recovery of service tax."
Tribunal observed even in the Order-in-Original, the only finding for invoking the extended period was that:
"As regards penal action, M/s. Vinoth Shipping Services, Tuticorin have contravened the Act by suppressing the fact of rendering services and not
paying the Tax due during the year 2006 - 07 and by not obtaining registration certificate for service rendered. Hence penalty is imposable under
sections 76, 77 & 78 of the Act."
Tribunal held that there was no clear allegation that appellants had wilfully suppressed facts with the intention to evade payment of Service Tax. The
main contractor/M/s. ACL had collected the full consideration including Service Tax from the clients, which was clear from the records. Appellants from
the very beginning had raised the contention that they were instructed by M/s. ACL that they were not required to pay the Service Tax. Thus, there was
no factual basis for invoking the extended period