Snapshot-34-Snapshot of Latest GST Cases

S.No

Section

Case Subject

Case

Held

1

Section
67

Action initiated
by State
authorities
under Section
67 against SEZ
unit is not ultra
vires to SEZ Act
read with
provisions of
CGST/SGST
Act, 2017

RHC Global Exports
(P.) Ltd. v. Union of
India [2023] 151
taxmann.com 134
(Gujarat)

The petitioner in the instant case contended that since their business premises was situated in Special Economic Zone and as such, to be
treated as foreign territory and not subjected to provisions whereby State authorities have no jurisdiction to carry out any search proceedings
at the premises of the petitioners.
High Court on perusal of Section 22 of SEZ Act read with Section 6 of the CGST Act, 2017 observed that State authorities are empowered
to carry out proceedings in SEZ. Their jurisdiction was unquestionable as Central Government has already authorized officers by virtue of
notification dated 5.8.2016 and by virtue of provisions of Sub-section (2) of Section 6 of GGST Act, where any proper officer issues an order
under this Act, he also issues an order under CGST Act as authorized by Act or under intimation to jurisdictional officer of Central
Government and respondents were thus empowered to carry out search proceedings in SEZ. Further, by virtue of circular dated 5.7.2017,
functions of proper officers under CGST Act are also defined. Thus the High Court held that once Central Government has notified the
functions of proper officers, said functions shall also be applicable to be carried out by the officers under CGST Act and hence it cannot be
said that there was any lack of authority on the part of State Officers , as contended.
The high court further observed that SEZ units were not exempted from any investigation or inspection and if submission of petitioners was
accepted that they are SEZ units and as such not subjected to such rigors of investigation or inspection, same would defeat the very
purpose of the Act and apart from this, there appears to be no visible inconsistency in both the Acts i.e. SEZ Act 2005 or GST Act, 2017.
The High Court dismissed the petitions with costs of Rs.10,000/- (Rupees Ten Thousand only) for each petition and further observing that
the writ petition were an attempt on the part of petitioners by filing these kind of petitions to thwart and belay the legal proceedings which
were initiated by respondent authorities and as such this move of petitioners appeared to be an abuse of process of law looking to the
manner in which the irregularities alleged to have been committed.

2

Section
79

Amount illegally
debited from
Bank account
directed to be
credited

Pradeep Kumar
Siddha v. Union of
India [2023] 151
taxmann.com 142
(Bombay)

In the present case, authorities had proceeded to unilaterally deduct the amount from the Petitioner's bank account by giving instructions
to the Bank and transferring it to the Electronic Cash Ledger of the Petitioner. The department failed to demonstrate the legal basis for such
course of action and therefore, High Court asked the Officer to file an affidavit to that effect and within how much time the amount would
be credited to the account of the Petitioner.

3

Section
129

Nonconsideration of
reply and no
opportunity
being heard
given for second
Notice

Shido Pharma v.
Assistant
Commissioner (ST)
[2023] 151
taxmann.com 141
(Madras)

In the instant case, goods were detained under Section 129 and in response to the notice dated 18.03.2023, petitioner had filed a detailed
reply on 24.03.2023 stating that the provisions of the IGST Act are inapplicable to the transaction in question. On the same date, department
issued a revised notice, in Form GST MOV -07 proceeding to apply the applicable provisions of the CGST/SGST Act. It was thereafter
observed by the High Court that no opportunity was granted to the petitioner to respond to that notice and the petitioner was further never
heard as what had transpired on 24.03.2023 was a hearing only in respect of notice dated 18.03.2023 and not subsequent notice dated
24.03.2023. Therefore, the High Court held that since proceedings had been concluded contrary to the principles of natural justice, therefore
impugned orders were thus set aside

4

Section
69 and
Section
132

Denial of Bai

Kumar Rasiklal
Kanudawala v. State
of Gujarat [2023] 151
taxmann.com 140
(Gujarat)

In the instant case, it was contended by the department that although vehicle number was mentioned in the e-way bills, actually, as per the
statement of the vehicle owners, vehicle never travelled from Gandhidham to Deesa or Patan and no goods were unloaded. Therefore, it
prima facie, indicated that the e-way bills were bogus and as such there was no transaction and yet the e-way bills were generated.
Therefore, the High Court considering the above fact revealed in the preliminary investigation carried out by Investigating Officer and in
absence of there being any actual transaction, prima facie, it seemed that bogus e-way bills were generated. Therefore, considering the
fact that the amount involved was more than 1,84,00,000/-, the court did not found it appropriate to exercise the powers under section 438
of the Criminal Procedure Code and therefore, the applications were dismissed.