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

Part-107-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-II

-No suppression as matter of pure interpretation and represented before audit & investigation by assessee
-No suppression or will misstatement when the information already communicated to the department
-No suppression as activity as well as the payment were in knowledge of the department
-No penalty when the amount paid before SCN and order only reflected non-payment with no finding about the wilful misstatement or suppression.
-Extended period not invokable as Department conducted audit of previous period & facts in the knowledge of department, -Regular Returns filed, Specific provision not invoked in operative part, Demand being revenue neutral, Balance Sheet being a public document, No Positive evidence adduced for malafide intention

S.No

Case Subject

Case

Held

1

No suppression as
matter of pure
interpretation and
represented before
audit & investigation
by assessee

Adani Enterprise Ltd. v.
Commissioner of Service Tax
[2022] 141 taxmann.com 463
(Ahmedabad - CESTAT) (15-03-
2022)

The issue involved was regarding classification and applicable rate on services.
Tribunal held that firstly issue involved was of pure interpretation of legal provisions therefore, it cannot be said that Appellant had any mala
fide intentions and had suppressed any fact with intention to evade. It was also on record that Appellant had represented the matter before
Audit team and also before department during the investigation of case. This clearly reflected that there was no suppression or willful
misstatement. The Appellant also provided all the details related to disputed activity before department. In this circumstances charge of
suppression or wilful misstatement did not survive. Thus, extended period of limitation was also not invokable and no penalty was payable.

2

No suppression or will
misstatement when
the information
already
communicated to the
department

Ranjit Singh & Co. Ltd. v.
Principal Commissioner,
Central Excise And Service
Tax Commissionerate [2022]
141 taxmann.com 122
(Allahabad-CESTAT)(28-03-22)

The question before the Tribunal was whether SCN dated 18-10-2016 for the period April 2011 to March 2015 was barred by limitation or
not.
The Tribunal took note of the fact that the appellant had informed the department that they will discharge their service tax liability under
Composite Scheme under Works Contract Services and the said activity was known to the respondent during the period of execution of work.
In these circumstances, SCN issued by invoking extended period of limitation was not sustainable. Accordingly, the whole of demand was
barred by limitation.

3

No suppression as
activity as well as the
payment were in
knowledge of the
department

R D Contractors and
Consultants v. Commissioner
of Central Excise & Service
Tax, Panchkula [2022] 137
taxmann.com 288 (Chandigarh -
CESTAT) (26-08-2021)

Tribunal observed that in this case, extended period of limitation was not invokable as it was a case of availment of benefit of Notification
No. 30/2012-ST dt. 20.06.2012 and computation of taxable turnover and no fact were suppressed by the appellant from the department. The
activity as well as payment of service tax were in the knowledge of the department, therefore, in the absence of any malafides on the part of
the appellant, extended period of limitation was not invokable. Therefore, any demand pertaining to extended period of limitation was set
aside.

4

No penalty when the
amount paid before
SCN and order only
reflected nonpayment with no
finding about the wilful
misstatement or
suppression

Five Vision Promoters v.
Commissioner, Central Excise
& Service Tax, Ghaziabad
[2022] 137 taxmann.com 13
(Allahabad - CESTAT) (28-02-
2022)

The period involved in the case was 1-4-2010 to 31-12-2014 and SCN was issued on 13-1-2015. When the audit was conducted, the
appellant had paid service tax on the rent received as on 24-1-2012 in respect of shops in the mall. The amount already stood appropriated.
The Tribunal thus, was in agreement with the appellant that section 73(3) was applicable to the case and no SCN should have been issued.
There was no finding of the Commissioner in the impugned order with respect to the demand which established any element of fraud or
collusion or willful mis- statement or suppression of facts or violation of provisions of act or rules with an intent to evade payment of service
tax. Therefore, section 73(4) did not apply to the part of the demand. All that the impugned order reflected was that the appellant had not
paid service tax and when pointed out by the audit, it paid it forthwith. For the same reason, it was held that no case was made out by the
Revenue to justify the imposition of penalty upon the appellant under section 78 in so far as this part of the demand was concerned.

5

Extended period not
invokable as
-Department
conducted audit of
previous period &
facts in the knowledge
of department
-Regular Returns filed
-Specific provision not
invoked in operative
part
-Demand being
revenue neutral
-Balance Sheet being
a public document
-No Positive evidence
for malafide intention

Luit Developers (P.) Ltd. v.
Commissioner of Central
Goods and Services Tax &
Central Excise, Dibrugarh
[2022] 136 taxmann.com 109
(Kolkata - CESTAT) (23-02-
2022)

Tribunal observed that the Service tax demand for April-September 2014 was beyond extended period of 5 years. Reasons were as follows-
-Department had done audit of the appellant for February, 2014-15 as per Detailed Manual Scrutiny Report dated 15.12.2017, which included
checking of Form 26AS as clearly mentioned in Para 5.2 of CBEC Circular No 185/4/2015-ST dated 30.6.2015 vide F.No 137/314/2012 and
therefore no suppression can be alleged for this period.
-Tribunal referred to Judgement in Gannon Dunkerley & Co. Ltd. v. CST (Adjudication) 2021 (47) GSTL 35 (Trib. - Delhi) wherein it was held
that since appellant was filing all ST-3 Returns regularly, Department's stand that it could examine the factual position only on receiving
details of Form 26AS cannot be sustained because CBEC Circular No. 113/7/2009-S.T., dated 23-4-2009 vide F.No. 137/158/2008-CX. 4
and CBEC Circular No 185/4/2015-ST dated 30.6.2015 vide F.No 137/314/2012 categorically puts duty on Assessing Officer to effectively
scrutinize the returns at the preliminary stage.
-Proviso to Section 73(1) was not invoked in the operative part of SCN and therefore extended period could not be invoked as held in Satish
Kumar & Co. v. CCE 2019 (22) GSTL 269 (Mum. - CESTAT).
-Extended period cannot be sustained for part of tax demand raised on RCM basis by virtue of it being a revenue neutral situation since the
appellant was eligible for credit if it had done tax payment as also held in Universal Dredging & Reclamation Corpn. Ltd. v. Commissioner of
CGST & CE 2021 (44) GSTL 401 (Chennai - CESTAT).
-Appellant was Pvt Ltd Company and figures in Form 26AS were already included in Revenue from Operations in the Profit/Loss Account,
which was a public document, therefore no suppression can be alleged as held in Hindalco Industries Ltd. v. CCE 2003 (161) ELT 346 (Trib.
- Delhi).
-Department had not adduced any positive evidence to show malafide intention for evasion of service tax and therefore extended period
cannot be invoked as held in Pushpam Pharmaceuticals Co. v. Collector of Central Excise 1995 (78) ELT 401 (SC)

Part-106-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-I

Since, Notices have started to be issued in GST Regime under Section 73/74. In this series will be sharing Judgements on invoking extended period for levy of Penalty under the erstwhile regime of Service Tax under Section 73 of Finance Act, 1994 which was similar to Section 73 and 74 of CGST Act, 2017.

The snapshot covers Judgements on following Issues-
-Extended period cannot be invoked in matters involving Interpretation of Statute
-No penalty wherein tax paid before the issue of the SCN
-Extended period cannot be invoked since department had conducted audit of the taxpayer in 2012 and had knowledge about the activities of taxpayer since then.
-Mere non-payment of duties is not equivalent to collusion or willful misstatement or suppression of facts
-Extended period cannot be invoked since taxpayer sought clarification and instead of clarifying, investigation commenced for suppression of facts
-Extended Period cannot be invoked as no suppression of facts when proper Books maintained and returns filed regularly.

S.No

Case Subject

Case

Held

1

Extended period
cannot be invoked in
matters involving
Interpretation of
Statute

International Merchandising
Company v. Commissioner,
Service Tax [2022] 145
taxmann.com 247 (SC) (01-
11-2022)

The appellant placed reliance on the decision in Padmini Products v. CCE 1989 taxmann.com 629 (SC) to submit that the extended period
of limitation would not be attracted as the appellant has not acted with dishonest or fraudulent intent.
The Court observed that the Tribunal had specifically observed that the present case involved interpretation of statutory provisions. Therefore,
Tribunal having concluded that the issue turned upon an interpretation of the provisions of Section 65(68) and Section 65(86b) of the Finance
Act 1994, there was no warrant to allow invocation of extended period of limitation and to direct determination of the penalty following the requantification of demand. The extended period of limitation would clearly not stand attracted in respect of the first SCN dated 20 October 2009.
Thus, the demand was confined to the normal period of limitation excluding the extended period

2

No penalty wherein
tax paid before the
issue of the SCN

Cades Digitech (P.) Ltd. v.
Commissioner of Central
Tax [2022] 140 taxmann.com
189 (Bangalore-CESTAT) (04-
01-2022)

Appellant submitted that the demand and duty has been paid before the issue of SCN and as such no penalty can be imposed. However,
AR for the Revenue disputed the payment of interest thereof.
The Tribunal was of the considered opinion that in order to verify the competing claims of the appellant and the Revenue, the matter was to
go back to the original authority for verifying the records and arrive at the actual duty and interest payable. However, no penalties can be
imposed at this count.

3

Extended period
cannot be invoked
since department had
conducted audit of the
taxpayer in 2012 and
had knowledge about
the activities of
taxpayer since then.

Abhishek Alcobev (P.) Ltd. v.
Central Excise
Commissionerate, Noida
[2022] 139 taxmann.com 1
(Allahabad - CESTAT) (23-02-
2022)

On the aspect of invoking extended period of 5 years by the department instead of normal period of 18 months while issuing the SCN, Tribunal
held that extended period can be invoked by the department only when there was element of fraud or collusion or there was wilful intention for
evading the payment of service tax or there was suppression of relevant facts resulting into the evasion of duty. In the present case, it was
observed that department had conducted the appellants audit in August 2012 also. Hence, department had the knowledge about the activities
of the appellant. There was no denial that the appellant had been filing its Service Tax returns regularly. Appellant had been registered with
Service Tax department. Department had the option to and had assessability to entire information about receiving disputed amount of interest
by appellant since 2009.
Tribunal held that suppression of facts cannot be alleged. The fact being in the knowledge of the department since august 2012, no question
of invoking the extended period at all arise. With respect to the taxable service being provided by the appellant there was no denial for discharge
of liability of service tax. Hence there was never any intentional evasion on part of the appellant. It became crystal clear that there was neither
a wilful mis-declaration nor wilful suppression. The extended period therefore was wrongly invoked and SCN was held to be barred by time.
Cases Referred- Padmini Products v. Collector of Central Excise followed in Anand Nishikawa Co Ltd. v. CCE [2005] 2 STT 226 (SC)

4

Mere non-payment of
duties is not
equivalent to collusion
or willful misstatement
or suppression of
facts

C.C.,C.E. & S.T. Bangalore v.
Northern Operating Systems
(P.) Ltd. [2022] 138
taxmann.com 359 (SC) (19-
05-2022)

The Court observed that CESTAT relied upon two of its previous orders in giving the order in favour of the assessee and in the present case,
the revenue itself discharged the later two SCN. Thus, it evidenced that view held by assessee about its liability was neither untenable, nor mala
fide. This was sufficient to turn down revenue's contention about existence of "wilful suppression" of facts, or deliberate misstatement.
The Court held that SCN was unjustified and unreasonable on the aspect of invocation of extended period of limitation and although the
assessee was held liable to discharge its service tax liability but only for the normal period or periods, covered by the four SCNs issued to it.
Cases Referred- Cosmic Dye Chemical v. CCE 1995 taxmann.com 926 (SC), Uniworth Textiles v. CCE [2013] 31 taxmann.com 67, Escorts
Ltd. v. CCE [2015] 58 taxmann.com 125, Commissioner of Customs v. Magus Metals [2017] 16 SCC 491

5

Extended period
cannot be invoked
since taxpayer sought
clarification and
instead of clarifying,
investigation
commenced for
suppression of facts

Karnataka Co-operative Milk
Producers Federation Ltd. v.
Commissioner of Central
Excise [2022] 138
taxmann.com 486 (BangaloreCESTAT) (22-02-2022

The appellant argued that the SCN was time barred.
The Tribunal observed that the appellants had proactively informed the department in 2004 itself about their activities and sought clarification
on the excisability to service tax. The department instead of giving clarification have decided to investigate the matter after two years and
issued show-cause notice after further two years. In place of invoking extended period in cases of suppression of fact with an intent to evade
payment of duty or tax, tribunal observed that department chose to invoke extended period in a case where the appellant has proactively
informed the department about their activities and sought clarification. The Tribunal thus held that Revenue had no case to invoke the
extended period to issue show-cause notice. Therefore, the impugned order was held not to survive on limitation

6

Extended Period
cannot be invoked as
no suppression of
facts when proper
Books maintained and
returns filed regularly.

State Bank of Patiala v.
Commissioner, Central
Excise & Central Goods &
Services Tax [2021] 129
taxmann.com 167 (New Delhi -
CESTAT) (09-08-2021)

It was argued that proper books of accounts and statutory registers were maintained, and returns were filed with Department regularly. There
was no allegation in SCN that the appellant had not filed return properly and/or there is any suppression of facts or mis-statement in the returns.
Tribunal held that the SCN had been issued after more than 32 months from the last date when the return was due from the financial year
ending 31-3-2010. Accordingly, SCN was bad for invoking the extended period of limitation. There was no suppression of facts or contumacious
conduct on the part of the appellant

Part-105-One Pager Snapshot to the Latest Cases on Section 16, Section 29, Section 30, Rule 142 and Section 62

-Registration cancelled after 31-12-2022 but within the period of amnesty scheme eligible for amnesty scheme of revocation of cancelled registration
-Cancellation cannot be retrospective when the same was applied by assessee from the date of closure of business.
-ITC of the assessee under the GST regime cannot be denied merely on the difference of GSTR 2A and 3B
-As the Order visible to the petitioner on GSTN portal is not complete copy of the order, thus it must be accepted in law that the impugned order does not contain reasons.
-Notice U/Sec 46 to be issued before passing order U/Sec 62.

S.No

Section

Case Subject

Case

Held

1

Section
29 and
Section
30

Registration cancelled
after 31-12-2022 but
within the period of
amnesty scheme
eligible for amnesty
scheme of revocation
of cancelled
registration

Rajeev Kumar v.
Principal
Commissioner of
Central Goods and
Services Tax,
Ranchi [2023] 155
taxmann.com 54
(Jharkhand) (12-09-
2023)

The Court stated that Government of India had issued Notification No. 03/2023~Central Tax dated 31-3-2023 and extended the time up
to 30-6-2023, but the extension is granted to taxpayers granting time whose registration was cancelled on or before 31-12-2022. The
petitioner's cancellation was on 11-5-2023, hence the benefits of the said notification could not be availed by the petitioner. If the cancellation
was set aside and the GST is revoked the petitioner is willing to pay the GST along with late fee.
The Court gave anxious consideration and observed that had the cancellation of registration been prior to 31-12-2022, then petitioner
would have come within the time prescribed under the said notification. But the consideration for extension was pending during that period,
hence the Court was of the considered view that the petitioner was entitled to the benefit. Therefore, the Court allowed the writ petition and
the directed to restore the petitioner's GST registration number.
Case Referred- Tvl. Suguna Cut piece v. Appellate Deputy Commissioner (ST) (GST) (Mad)

2

Section
29 and
Section
30

Cancellation cannot
be retrospective when
the same was applied
by assessee from the
date of closure of
business

Krishna Traders v.
Commissioner of
Central Goods and
Service Tax [2023]
155 taxmann.com 52
(Delhi) (20-09-2023)

Petitioner had closed business with effect from 31-3-2022 and had, applied for cancellation of GST registration. Petitioner after closure of
business, shifted from New Delhi to Dehradun. SCN was issued calling upon the petitioner to furnish additional information in connection
with his application. Petitioner claimed that he did not receive the said notice as he had shifted to Dehradun. Since said SCN was not
responded, Proper Officer rejected application for cancellation. Thereafter, Proper Officer issued a fresh SCN proposing to cancel
petitioner's registration on account of failure to file tax returns for a continuous period of six months and cancelled registration with
retrospective effect. The impugned order included a tabular statement indicating that no tax was found due and payable by the petitioner.
The Court observed that cancellation of the GST registration was not an issue but the issue was related to cancellation of the GST
registration with retrospective effect. The Court directed that cancellation of petitioner's GST registration shall take effect from 31-3-2022

3

Section
16

ITC of the assessee
under the GST regime
cannot be denied
merely on the
difference of GSTR
2A and 3B

Henna Medicals v.
State Tax Officer
[2023] 155
taxmann.com 29
(Kerala) (19-09-2023

Impugned order was passed against the petitioner on the ground that there was a difference between GSTR 2A and GSTR 3B.
The Court took into consideration earlier judgement passed in the matter of Diya Agencies v. The State Tax Officer and reference made
in the said judgement to the judgement of Supreme Court in the case of The State of Karnataka v. M/s Ecom Gill Coffee Trading Private
Limited 2023 (3) TMI 533 SC as well as Calcutta High Court judgment in Suncraft Energy Private Limited v. The Assistant Commissioner,
State Tax, Ballygunge Charge [Judgment dated 2-8-2023 in MAT No. 1218/2023]. The Court relied upon the principle that ITC of the
assessee under the GST regime cannot be denied merely on the difference of GSTR 2A and 3B and thus petition was allowed and matter
was remitted back to Assessing Authority to examine evidence of petitioner irrespective of Form GSTR 2A and after examination of evidence
placed by the petitioner, order to be passed in accordance with the law.
Case Referred- Diya Agencies v. The State Tax Officer [Judgment dated 12-9-2023 in WPC 29769/2023]

4

Rule 142

As the Order visible to
the petitioner on
GSTN portal is not
complete copy of the
order, thus it must be
accepted in law that
the impugned order
does not contain
reasons.

[2022] 142
taxmann.com 470
(Allahabad)
Dauji Ispat (P.) Ltd.
v. State of U.P (10-
11-2021

Contention of the petitioner that the copy of the order uploaded on the GSTN portal and as is visible to the petitioner does not
mention/disclose the reasons therefor. The revenue admitted that due to some error copy of the impugned order visible to the petitioner on
the GSTN portal is not the complete copy of the order.
The Cour observed that it must be accepted in law that the impugned order does not contain reasons. This conclusion was drawn as
unless the complete copy of the order containing the reasons was served on the petitioner, he may never have any right to challenge the
same before any forum including the appellate forum. The fact that the Assessing Officer may have available to it another copy of the same
order which may contain reasons therefor, may be of no help to the Revenue Authority as such copy of the order was not served on the
petitioner. Therefore, it cannot be relied upon to any extent. The Court thus held that order served on petitioner was wholly defective and
lacking in vital aspect namely reasons for the conclusions drawn therein. Accordingly order DRC-07 dated 20-7-2021 was set aside and
the matter remitted to the Assessing Officer for fresh consideration

5

Section
62

Notice U/Sec 46 to be
issued before passing
order U/Sec 62.

[2022] 140
taxmann.com 405
(Jharkhand)
Vinman
Constructions Ltd.
v. State of
Jharkhand (22-02-
2022

Petitioner amongst other contentions contended that no notice to file return under Section 46 was served before passing order U/Sec 62.
The Court observed that requirement of notice before proceeding to pass order under section 62 has been laid down by Legislature so
that defaulter may have an opportunity to file return in case return has not been filed. It was also observed that there is a salutary purpose
for service of notice under section 46 before the proper officer proceeds to pass assessment order under section 62. The court also referred
to CBIC Circular dated 24-12-2019 which provides for service of notice under section 46 before the proper officer proceeds to assess the
tax liability of a return defaulter under section 62 of the Act. Moreover, sub-section (2) of section 62 further provides that if within thirty days
valid return has been filed, assessment order shall be deemed to have been withdrawn, the reason being that in case the return has not
been filed even after proper service of notice under section 46 of the Act, the penal consequences flows out of such an order passed under
section 62. The Court thus, set aside the order passed U/Sec 62 as no notice was served U/Sec 46 for filing of returns

Part-104-One Pager Snapshot to the Latest Cases on Section Section 29, Section 30, Section 112, Section 73 and Section 74 and Rule 142

-Refund in pursuance of Appellate Authority order cannot be withheld because revenue intends to file an appeal but Tribunal has not been formed

-Purpose of SCN is to enable the noticee to respond to the allegations. Since SCN was incapable of eliciting any meaningful response, any order passed pursuant to such a SCN would fall foul of principles of natural justice

-Summary in electronic form is required to be furnished along with the SCN

-No Penalty in the matter of Classification Disputes

S.No

Section

CAse Subject

Case

Held

1

Section
112

Refund in pursuance
of Appellate Authority
order cannot be
withheld because
revenue intends to file
an appeal but Tribunal
has not been formed

Zones Corporate
Solutions (P.) Ltd. v.
Commissioner of
Central Goods and
Service Tax [2023]
155 taxmann.com 8
(Delhi)

The order of the Appellate Authority was in favour of the Petitioner wherein it was directed to grant the refund to the petitioner. Revenue
contended refund has not been granted since the competent authority in pursuance to the opinion of review branch has directed filing of an
appeal before Appellate Tribunal challenging order in appeal passed by Commissioner (Appeals) and owing to non-functioning of the GST
Appellate Tribunal which was beyond the control, such appeal could not be filed.
The Court observed that though nearly a year has passed, yet no proceeding has been filed challenging the said order till date. The
petitioner cannot be asked to wait endlessly for the revenue to challenge the order dated 23rd July, 2019. Department was directed to
refund the amount as directed by the Commissioner (Appeals)

2

Section
29 and
Section
30

Purpose of SCN is to
enable the noticee to
respond to the
allegations. Since
SCN was incapable of
eliciting any
meaningful response,
any order passed
pursuant to such a
SCN would fall foul of
principles of natural
justice

Sachin Upadhyay v.
Addl.
Commissioner,
Central Goods and
Services Tax,
Appeal-I [2023] 155
taxmann.com 5
(Delhi)

SCN was issued by the proper officer proposing to cancel the petitioner's GST registration on accountof “Non compliance of any specified
provisions in the GST Act or the Rules made thereunder as may be prescribed." The Proper Officer proceeded to cancel the petitioner's
GST registration from retrospective date on the ground that petitioner had not uploaded the bank details. The tabular statement set out in
the said order dated 3-1-2022 indicates that no tax or penalty is due from the petitioner. The petitioner thereafter, filed an application for
revocation of the cancellation order. The petitioner asserted that bank details were uploaded on GST portal prior to issuance of SCN.
Pursuant to application for revocation of cancellation, Proper Officer issued a SCN proposing to reject the petitioner's application for “Reason
for revocation of cancellation - Reason for revocation of cancellation-." The court thereafter observed that “To add insult to injury, the
petitioner's application for revocation of cancellation of the GST registration was rejected on the ground that the petitioner had not replied
to the show cause notice within the time specified therein.”. The petitioner preferred an appeal under section 107 and the same was also
rejected. Court observed that “impugned order dated 23-5-2023 is equally cryptic and vague. It is evident from the reasons for rejection of
the petitioner's appeal as stated in the impugned order dated 23-5-2023, that the said order has been passed without application of mind.”
The Court observed that SCN did not provide any clue as to the reason for proposing cancellation of the petitioner's GST registration.
SCN which do not specifically state reason for proposing adverse actions cannot be sustained. The purpose of SCN is to enable the noticee
to respond to the allegations. Since the said SCN was incapable of eliciting any meaningful response, it did not meet the standards required
for a SCN. Any order passed pursuant to such a show cause notice would fall foul of the principles of natural justice. The Court further
observed that the reasons for proposing to reject the petitioner's application for revocation of cancelled registration were also vague and
unintelligible. This Court was at loss to understand the reason for proposing to reject the petitioner's application as articulated by the Proper
Officer. As stated above, the impugned SCN failed to disclose the reason for proposing cancellation of the petitioner's GST registration and
therefore, the impugned order cancelling the petitioner's registration falls foul of the principles of natural justice. It was thus set aside and
petition was allowed with costs, quantified at Rs. 5,000/-

3

Rule 142

Summary in electronic
form is required to be
furnished along with
the SCN

Shubham Gupta v.
Additional
Commissioner/
Joint Commissioner
CGST [2023] 155
taxmann.com 4
(Delhi)

Petitioner’s grievance was that although it has received the SCN dated 2-8-2023 proposing imposition of penalty, the summary of
proposed demand has not been communicated electronically in FORM GST DRC-01 & FORM GST DRC-02 as required under Rule 142(1).
TheCourt observed that any notice issued under the relevant sections including Section 74 is required to be accompanied by a summary
thereof, electronically in FORM GST DRC-01 & FORM GST DRC-02. The learned counsel appearing for the revenue submitted that a
summary has not been issued in the requisite form and that the proper officer shall issue the same in compliance with the said provisions.
The Court held that although summary in the electronic form is required to be furnished along with the show cause notice, furnishing of the
said summary at this stage would be substantial compliance with the said provisions

4

Section
73 and
Section
74

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)

During assessment period from April 2020 to June 2021, the petitioner manufactured hand sanitizers and classified under the Tariff
heading 30049088 of HSN and declared tax liability @ 12% applicable to medicament and paid tax as per the returns filed. The return filed
by the petitioner got accepted by the jurisdictional CGST authority. However, later on 5-7-2022 action was initiated under section 74(1) by
issuing a SCN that the classification was under Hand Sanitizers (alcohol based) under HSN 3808 exigible to GST @ 18%. In pursuant to
the said notice, order in original was passed and petitioner paid the assessed amount along with the interest in pursuant to the said order.
The 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)