S.No

Case

Held

1

Falcon Tyres v.
State of Karnataka
[2006] 5 STT 67
(SC)

Provision Interpreted- Section 2(A)(1):agricultural produce or horticultural produce' shall not include tea, coffee, rubber, cashew, cardamom, pepper and cotton; and
such produce as has been subjected to any physical, chemical or other process for being made fit for consumption, save mere cleaning, grading, sorting or drying.
We do not find any substance in the submission of the learned counsel for the appellant that the semicolon after the word cotton does not mean that the first part of
the Section is disjunctive from 'such produce' as has been subjected to any physical, chemical or other process. Section 2 (A) (1) is in two parts, it excludes two types of
food from agricultural produce. According to us, the definition of the agriculture and horticulture produce does not say as to what would be included in the agriculture or horticulture
produce, in substance it includes all agriculture or horticulture produce but excludes, (1) tea, coffee, rubber, cashew, cardamom, pepper and cotton from the definition of the
agriculture or horticulture produce though all these products as per dictionary meaning or in common parlance would be understood as agricultural produce and (2) "such produce
as has been subject to any physical, chemical or other process for being made fit for consumption", meaning thereby that the agricultural produce other than what has been
excluded, which has been subjected to any physical, chemical or other process for making it fit for consumption would also be excluded from the definition of the agriculture or
horticulture produce except where such agricultural produce is merely cleaned, graded, sorted or dried

2

Vadilal Dairy
International Ltd. v.
State of
Maharashtra [2015]
61 taxmann.com 37
(Bombay)

Provision Interpreted- (1) Sweets and sweetmeats, including Shrikhand, Basundi and Doodhpak; Cakes, pastries, biscuits and other confectioneries, ice cream and
kulfi and non-alcoholic drinks containing ice cream or kulfi.
The use of semicolon after the words "doodhpak" is significant. It separates first category from the other category which includes items like cakes, pastries, biscuits
and other confectioneries. These items form the second category. A plain reading of the items in the second category makes it quite clear that all these are items connected
and commonly sold in bakery establishments. The third category contains the item in dispute namely ice cream along with kulfi and non-alcoholic drinks containing ice-creams or
kulfi. The third category therefore, is quite distinct and different from the first two categories of this entry.

3

Jamshed N.
Guzdar v. State of
Maharashtra [2005]
2 SCC 591 (SC)

Provision Interpreted- 11A. Administration of Justice; constitution and organisation of all courts, except the Supreme Court and the High Courts.
The expression 'administration of justice' has been used without any qualification or limitation wide enough to include the 'powers' and 'jurisdiction' of all the courts except the
Supreme Court. The semicolon (;) after the words 'administration of justice' in Entry 11A has significance and meaning. The other words in the same Entry after
'administration of justice' only speak in relation to 'constitution' and 'organisation' of all the courts except the Supreme Court and High Courts. It follows that under
Entry 11A State Legislature has no power to constitute and organize Supreme Court and High Courts

4

CC, Madras Vs.
Mcdowell Co. Ltd.,
1997 (21) RLT 715
(CEGAT)

Provision Interpreted-84.79 Goods falling under sub-heading Nos. 8479.20, 8479.30, 8479.40; sub-heading No. 8479.81 excluding wire coil winders; and machinery
used for the production of a commodity.
We however, note that while sub¬heading 8479.82 is not included the relevant entry after enumerating various sub-headings lists machinery used for the production of a commodity
also as eligible to exemption. The expression "and machinery used for the production of a commodity" occurs after a semi-colon which clearly indicates that this is a
distinct category of goods which the Notification intended to exempt. Non-inclusion of specific Heading 8479.82 under these circumstances would not disentitle the impugned
goods from exemption provided, of course, the impugned goods are held to be machinery used for the production of a commodity

5

Mahindra &
Mahindra Ltd. v.
Commissioner of
Central Excise,
Aurangabad [1997]
1997 taxmann.com
861 (CEGAT Mum)

Provision Interpreted- No credit shall be allowed in respect of a factory from which clearances of the specified goods
(a) were effected for the first time on or after the 1st day of April, 1981; or
(b) were not effected during the financial years 1981-82, 1982-83 and 1983-84.
One category is where clearances of the specified goods were effected for the first time on or after 1.4.81. The second category is one from which no clearances of specified goods
had been effected during the financial year 1981-82, 1982-83 and 1983-84. In such a view of the matter, the semicolon punctuating the two conditions, and use of the
disjunctive "OR" between the conditions, acquires meaning. Hence, when the appellants had cleared motor vehicles falling under item 34I (2) CET for the first time
only in July, 1981, they fall under the first category, and claim has rightly been held to be hit by the provision of B iv (a) of the notification 116/84

6

Jindal Stainless
Ltd. v. State of
Haryana [2016] 75
taxmann.com 137
(SC)

Provision Interpreted- Article 304 of Constitution of India-Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law
(a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so,
however, as not to discriminate between goods so imported and goods so manufactured or produced; and
(b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided
that no Bill or amendment for the purposes of clause shall be introduced or moved in the Legislature of a State without the previous sanction of the President.
The Supreme Court held that applying the ratio in the above decisions since the expression 'and' is used in Art. 304 after semi-colon, it will have to be read as 'or'
creating a disjunctive reading of Art. 304(a) and Art. 304(b) indicating that the State Legislature can exercise its power either under Art.304 (a) or Art. 304 (b) or both

S.No

Case

Held

1

Commissioner Of Income
Tax vs M/S. Cello Plast
(Bom HC)

The statue viz. Section 54EC of the Act provides for exemption from tax to long term capital gain provided the same is invested in bonds of Rural Electrification
Corporation Limited or National Highway Authority of India. However, as the bonds were not available, it was impossible for the respondent-assessee to invest
in them within six months of the sale of their factory building.

2

Cochin State Power And
Light vs State Of Kerala1965 AIR 1688, 1965
SCR (3) 187

Section 6 came into force on September 5, 1959, and the relevant period expired on December 3. 1960. In the circumstances, the giving of the requisite notice of 18 months
in respect of the option of purchase on the expiry of December 2, 1960, was impossible from the very commencement of s.6. The performance of this impossible duty
must be excused in accordance with the maxim, lex non cogitate ad impossible (the law does not compel the doing of impossibilities), and sub-s(4) of s.6 must
be construed as not being applicable to a case where compliance with it is impossible.

3

The Inter College,
Through Its ... vs The
State Of U.P. (All HC)

If the authorities for their own default sit tight and idle, did not bother for making the forms available to the institutions, is it permissible subsequently to the authorities to
require the college and the students to adhere to the time schedule prescribed in the regulation and else face consequences. In our view the answer would be 'No' since
neither the said provision can be read in such manner nor Regulations permit such interpretation. "Lex Non Cogit ad impossibilia." The law does not compel a man to
do that which he cannot possibly perform and if duty is created and party is disable to perform without any default in him and has no remedy, law will excuse

4

Commissioner of
Customs, ICD, TKD, New
Delhi v. J.S. Gujral 2009
taxmann.com 347 (Delhi)

The Tribunal placed reliance on the maxim lex non cogitad impossibilia which means that the law cannot ask a person to do the impossible. We agree with these observations
and views of the Tribunal. As per the Import Policy the importers were required to obtain the Type Approval Certificate/COP from the international accredited
agency of the country of origin of the goods. In this case the cars have been imported from Japan and, therefore, it was only the Ministry of Land, Infrastructure
and Transport which could have issued the Type Approval Certificate/COP. The respondents had applied to the said Ministry for the Type Approval
Certificates/COPs but the Ministry had flatly refused in so many words. In such a situation the respondents could not be expected to submit the Type Approval
Certificate/COP from the said agency. We are, therefore, not inclined to interfere with the impugned order passed by the Tribunal.

5

Sembcorp Energy India
Ltd. v. State of Andhra
Pradesh [2022] 142
taxmann.com 400
(Andhra Pradesh)

Petitioner contended that in so far as transmission of electricity is concerned, it is impossible to generate shipping bills, as supply from one place to another place and from
one country to another country is only through transmission lines. Thus, shipping bill is a custom document and the same cannot be made applicable to show supply of
electricity; which is intangible in nature. High Court observed situation reminded them of an age old maxim 'Lex Non Cogit ad impossibilia', meaning that law does
not compel a man to do things which he cannot possibly perform and held that petitioner was justified in not producing shipping bills to prove the quantity of
energy units transmitted and that the reports of REA filed by the petitioner, could be made the basis to deal with the claim for refund of Input Tax Credit.

6

I.F.C.I. Ltd. v. Cannanore
Spinning and Weaving
Mills Ltd, AIR 2002 SC
1841

We also would like to add that whenever there is any beneficial legislation or any scheme giving certain benefit to anyone, the scheme should be interpreted so as to make
its objective more effective and not in a manner which would frustrate the objective. In the instant case, the State wanted generation of additional electricity and under
the scheme, the said task had been partly taken over by the petitioner and in fact the petitioner generated electricity as long as it was in a position to do so. The
scheme, being framed not only for the benefit of the State but also for the entities like the petitioner, it ought to have been interpreted in a liberal manner.'

7

Rolcon Engg. Co. Ltd. v.
State of Gujarat [2009] 21
VST 118 (Guj.)

The benefits given to the petitioner under the tax incentive scheme for wind power generation were sought to be withdrawn on the ground that the petitioner had committed
breach of clause 7(f) of the Gujarat Sales Incentive Scheme for Wind Power Generation, 1993 by not by not keeping the wind farm/windmills in operation for a continuous
period of six years after commissioning them. In the said case, it was the case on behalf of the petitioner that due to cyclone in the coastal area windmills which were already
installed, came to be destroyed. It was only on account of act of God that the petitioner industrial undertaking could not keep the wind-farm running for a continuous period
of six years in commissioning them and therefore, it was not possible for the petitioner to comply with clause 7(f) of the Gujarat Sales Tax Incentive Scheme for Wind Power
Generation, 1993. It was held that if it appears that the performance of the formalities prescribed by a statute had been rendered impossible by circumstances
over which the person interested had no control, those circumstances would be taken as a valid excuse.

8

State of Gujarat v. S.A.
Himnani Distributors (P.)
Ltd [2014] 43
taxmann.com 358
(Gujarat)

Under the circumstances, when it was impossible for the dealer to comply with all the conditions stipulated for input tax credit due to act of God and it was
beyond control of the respondent-dealer to fulfil conditions for availment of the input tax credit due to the act of God - in the present case, the flood, which can
be said to be valid excuse for not fulfilling the conditions stipulated for availing input tax credit on the goods destroyed in flood and therefore, interpreting the
provisions for availing input tax credit, it is hereby held that the dealer shall be entitled to input tax credit on the goods destroyed in flood. However, subject to rider that if
such dealer is compensated by the Insurance Company with respect to loss sustained i.e. with respect to the goods destroyed, the same can be given credit, meaning
thereby, to that extent the respondent - dealer shall not be entitled to input tax credit, otherwise, it will be giving a double benefit to the respondent - dealer

S.No

Case Subject

Case

Held

1

Calculation of time limit
“within a specified
period”

Haru Das Gupta vs State
Of West Bengal-(SC) 1972
AIR 1293, 1972 SCR (3)
329

The day on which the cause of action arose, is to be excluded from computation and the day on which such action is taken is to be included.
Therefore, in computing the period of three months from the date of detention, which was February 5, 1971, before the expiration of
which the order or decision for confirming the detention order and continuation of the detention thereunder had to be made, the date
of the commencement of detention, namely, February 5, 1971, has to be excluded. So done, the order of confirmation was made before
the expiration of the period of three months from the date of detention.

2

Calculation of the Time
limit having words “not
less than”

Commissioner Of
Income-Tax vs Ekbal And
Co. (Bom) (1945) 47
BOMLR 181 (Bom HC)

The expression "within thirty days" and "not less than thirty days" are two quite different things. "Within thirty days" is within two points of
time, one at which the period begins and the other at which it expires. On the other hand, "not less than thirty days" is outside these
two points of time. There must be an interval of not less than thirty days and that means thirty days clear.

3

Calculation of Time
limit using “not earlier
than”

Jai Charan Lal vs State Of
U.P. & Ors (SC) 1968 AIR,
5

The expression "not earlier than thirty days" is not to be equated to the expression, not less than thirty days". It is no doubt true that where the
expression is "not less than so many days" both the terminal days have to be excluded and the number of days mentioned must be clear days
but the force of the words "not earlier than thirty days" is not the same. " In other words, although October 26 had to be excluded the date
on which the meeting was to be called need not be excluded provided by doing so one did not go in breach of the expression "not
earlier than thirty days.". The 25th of November was the 30th day counting from October 26 leaving out the initial day and therefore it
cannot be described as earlier than thirty days

4

Meaning of the words
“For the time being”-

Union Territory Of
Chandigarh And ... vs
Rajesh Kumar Basandhi
And Anr (SC)

The meaning of the phrase understood in general sense is that such an expression is indefinite in time and refers to state of facts
which may arise and exist at the time rule is applied which may vary at different times. The same meaning as generally understood also
had the approval in (1992) 3 Supreme Court Cases 576 -Jivendra Nath Kaul v. Collector/District Magistrate and Anr wherein it was held that "For
the time being" means at the moment or existing position

5

Meaning of “at any
time”

Ibrahimpatnam Taluk
Vyavasaya ... vs K.Suresh
Reddy & Ors (SC)

The exercise of suo-motu power "at any time" only means that no specific period such as days, months or years are not prescribed reckoning
from a particular date. But that does not mean that "at any time" should be unguided and arbitrary. In this view, "at any time" must be
understood as within a reasonable time depending on the facts and circumstances of each case in the absence of prescribed period
of limitation

6

Meaning of the Words
“Reasonable Time”

Veerayee Ammal v. Seeni
Ammal, [2002] 1 SCC 134

The expression means a reasonable time, looking at all the circumstances of the case; a reasonable time under ordinary circumstances;
as soon as circumstances will permit; so much time as is necessary under the circumstances, conveniently to do what the contract
requires should be done; some more protracted space than "directly" such length of time as may fairly, and properly, and reasonably
be allowed or required, having regard to the nature of the act or duty and to attending circumstances; all convey more or less same idea

7

Meaning of phrase “as
soon as”

Abdul Jabar Butt vs State
Of Jammu & Kashmir-
(SC) 1957 AIR 281

The question is- what is the span of time, which is designated by the words " as soon as may be'? The observations of Dysant, J., in King's Old
Country, Ltd. v. Liquid Carbonic Can. Corpn., Ltd. (1), quoted in Stroud's Judicial Dictionary, 3rd edition, vol. 1 page 200, are apposite. Said the
learned Judge, " to do a thing I as soon as possible means to do it within a reasonable time, with an understanding to do it within the shortest
possible time." Likewise to communicate the grounds 'as soon as may be' may well be said to mean to do so within a reasonable time
with an understanding to do it within the shortest possible time

8

Meaning of the Word
“Forthwith

Keshav Nilkanth Joglekar
vs The Commissioner Of
Police,: AIR 1957 SC 28

The Term "forthwith" in section 3(3), cannot mean the same thing as "as soon as may be" in section 7, and that the former is more
peremptory than the latter. The difference between the two expression lies, in our opinion, in this that while under section 7 the time
that is allowed to the authority to send the communication to the detenu is what is reasonably convenient, under section 3(3) what is
allowed is only the period during which he could not, without any fault of his own, send the report. Under section 7 the question is
whether the time taken for communicating the grounds is reasonably requisite. Under section 3(3) it is whether the report has been sent at the
earliest point of time possible, and when there is an interval of time between the date of the order and the date of the report, what has to be
considered is whether the delay in sending the report could have been avoided

S.No

Section

Case Subject

Case

Held

1

Section 73
and Section
74

Appellate PreDeposit to be allowed
to be paid by Debit to
Credit Ledger

Larsen & Toubro
Ltd. v. Joint
Commissioner
(ST) [2023] 154
taxmann.com 81
(Madras)

The High Court directed the revenue to number the appeal by permitting the petitioner to debit the amounts that are lying unutilized in
the petitioner's Electronic Credit Ledger towards pre-deposit under Section 107(6) of the Tamil Nadu Goods and Services Tax Act,
2017 and dispose the same on merits and in accordance with law in its turn

2

Section 73
and Section
74

Petitioner directed to
file Appeal before
Appellate Authority
and Appellate
Authority directed to
get goods tested on
application by
petitioner

Larsen & Toubro
Ltd. v. Joint
Commissioner
(ST) [2023] 154
taxmann.com 81
(Madras)

The goods which were subject matter of dispute were Cut Tobacco or Manufactured Tobacco and department had confirmed demand without
subjecting product to testing. At the stage of admission, the Court, by its order had directed drawing of sample for being taken for testing
before the Authority. However, the report was not available.
High Court observed that since petitioner had filed the Writ Petition within limitation prescribed for filing an appeal under section 107 thus,
the writ petition was disposed of by giving opportunity to the petitioner to file a statutory appeal before the Appellate Authority under section
107. The Appellate Authority was also directed that if the appeal is filed by the petitioner within the time stipulated, he shall consider
the appeal and the petitioner was entitled to have a sample tested before the Authority and make an application before the Appellate
Authority to send a sample for testing before the Testing Authority.

3

Section 74

Date on which SCN
was issued, there
was no allegation of
fraud or
misrepresentation on
the part of petitioner
and opportunity of
hearing not provided

Santosh Traders
v. State of U.P.
[2023] 154
taxmann.com 86
(Allahabad)

Notice was issued under Section 74 and date by which reply was to be submitted was fixed as 12-3-2021, however no date or time of personal
hearing was specified in the notice. The petitioner appeared on 18-3-2021 and sought further time to file the reply. Thereafter, without passing
any order on the said application, the order came to be passed on 14-7-2021, whereby demand as proposed in the show cause notice was
confirmed against the petitioner. The petitioner preferred an appeal against the said order, the same was delayed and was dismissed.
High Court held observed that the date on which show cause notice was issued, there was no allegation of fraud or mis-presentation
on the part of petitioner and there was no mention as to how the case would fall under section 74. No opportunity of personal
hearing admittedly was granted to the petitioner which was required in terms of Section 75(4) even if the petitioner had not filed
his reply to the show cause notice. The order passed was thus held contrary to mandate of Section 75 and thus was quashed.
Cases Referred- Bharat Mint And Allied Chemicals v. Commissioner Commercial Tax And 2 Others

4

Section 75

Opportunity of being
heard to be provided
whether reply filed or
not

Party Time
Hospitality v.
State of U.P.
[2023] 154
taxmann.com 85
(Allahabad)

High Court observed that from the order of assessment passed in pursuance to SCN issued under section 74 of GST Act, admittedly, no
hearing was accorded to the petitioner, which was contrary to the mandate of law prescribed under section 75(4); as an
expropriatory action, even otherwise, the principles of natural justice had to be complied with and it was incumbent to grant an
opportunity of hearing irrespective whether a reply was filed or not in terms of the mandate of Section 75(4) of GST Act.
Cases Referred-M/s Mohini Traders v. State of U.P. & Anr.; Writ Tax No. 550 of 2023 decided on 3-5-2023; M/s Lari Almirah House v. State
of U.P. & Ors.; Writ Tax No. 1569 of 2022 decided on 12-4-2023; Bharat Mint & Allied Chemicals v. Commissioner of Commercial Tax.; Writ
Tax No. 1029 of 2021 decided on 4-3-2022

5

Section 75

Mandatory to afford
opportunity before
passing an adverse
order, even though
petitioner may have
signified 'No' in
column meant to
mark choice to avail
personal hearing

Dana Pani v.
State of U.P.
[2023] 154
taxmann.com 84
(Allahabad

High Court observed by referring to Section 75(4), that once it has been laid down by way of a principle of law that a person is not required
to request for "opportunity of personal hearing" and it remained mandatory upon Assessing Authority to afford such opportunity before
passing an adverse order, the fact that petitioner may have signified 'No' in the column meant to mark the assessee's choice to
avail personal hearing, would bear no legal consequence. Even otherwise in an assessment order creating heavy civil liability, observing
such minimal opportunity of hearing is a must. Such opportunity has to be granted in real terms. The stand of the assessee may remain
unclear unless opportunity is first granted. Only thereafter, explanation furnished may be rejected and demand created. This opportunity
would ensure observance of rules of natural of justice but it would allow authority to pass appropriate and reasoned order as may serve
interest of justice and allow a better appreciation to arise at next/appeal stage, if required.
Cases Referred- Bharat Mint & Allied Chemicals v. Commissioner Commerical Tax & 2 Ors., (2022) 48 VLJ 325

S.No

Section

Case Subject

Case

Held

1

Explanation
to Rule
89(4)

Amendment in Rule
89 (4) for
considering lower
of FOB or Invoice
Value is not
clarificatory in
nature and thus has
Prospective
Operation
Insertion of
Explanation does
not always signify
retrospective
amendment.
Insertion of a new
stipulation will
always have a
prospective effect.
Policy can only be
changed by
amendment to
parent act and not
by a circular.

Tata Steel Ltd. v.
Union of India
[2023] 154
taxmann.com 76
(Jharkhand) (21-
08-23

Explanation was inserted in Rule 89(4) of the CGST Rules, 2017, vide notification no. 14/2022 - Central Tax, which provided that while
processing refund claims in case of exports, the lower of the values i.e. FOB value declared in the Shipping Bill or value declared in tax
invoice shall be considered. The Court confined interpretation on the question of retrospective effect of the amendment that came in
the year 2022, so far as its applicability in the aforesaid writ applications for the sole reason that the vires of the said rule is not
under challenge and did not touch the aspect of validity of Paragraph 47 of Circular No. 125/44/2019-GST dated 18-11-2019.
a) Insertion of Explanation was from Prospective Effect-Explanation inserted by way of amendment in Rule 89(4) of the CGST Rules,
2017, vide Notification No. 14/2022 - Central Tax dated 5-7-2022 was not in existence at the time of passing of the Order in Appeal dated
11-10-2021. Except for Rules 7, 9, 10, and 19 for which dates with retrospective operation have been provided, no other rules were given
any retrospective effect. Thus, from bare perusal of notification itself amendment made to Rule 89 (4) will have a prospective effect.
b) Whether Amendment was on similar lines to Para 47 of Circular No. 125/44/2019-GST 18-11-2019 or inserted a new stipulationHigh Court held that Paragraph 47 contemplated comparison of the value of export in the tax invoice and in the shipping bill, i.e., the
export document (which can either be FOB or CIF value) whereas explanation required comparison of the value in tax invoice with only
FOB value. Thus, explanation cannot be said to be on similar lines as Paragraph 47. A policy can be changed only by way of an
amendment under the parent Act and not by a circular and the policy change will be effective from the date of the amendment.
c) Whether the term Explanation when used would always signify retrospective Amendment- The 2022 Amendment Rules inserted
a new stipulation for comparison between two values. Such an exercise was not contemplated prior to the amendment as what was taken
into account was the actual transaction value. Therefore, by way of the amendment, a substantive change was brought about in the law
and therefore the amendment ought to operate prospectively. Further, mere use of the term "explanation" will not be indicative of the fact
that the amendment is clarificatory/declaratory.
d) A policy can be changed only by way of an amendment under the parent act and not by a circular and the law is well settled
that no taxes shall be levied or collected by way of executive fiat.
The High Court held that amendment in Rule 89 (4) of CGST Rules, 2017 which came into effect vide Notification No. 14/2022-Central
Tax dated 5-7-2022 is not clarificatory in nature and thus will have a prospective effect. In all these writ applications since the period
involved is prior to the amendment; as such, we hold that the respective impugned orders deserve to be quashed and set aside.
Cases Referred- CIT Versus Vatika Township (P) Ltd., reported in 2015 (1) SCC 1, Sedco Forex International Drill. Inc. v. CIT, reported in
(2005) 12 SCC 717, Union of India v. Martin Lottery Agencies Ltd., reported in (2009) 12 SCC 209, Kunnathat Thatehunni Moopil Nair etc. -
versus State of Kerela and another reported in 1960 SCC Online SC 7

2

Section 29
and Section
30

SCN must specify
the reasons for the
proposed action

[2023] 154
taxmann.com 73
(Delhi)
Singla Exports
v. CBIC (09-08-
23

Impugned order was issued pursuant to the impugned Show Cause Notice, whereby the Adjudicating Officer had proposed to cancel the
petitioner's GST Registration for the reasons-"1 Non compliance of any specified provisions in the GST Act or the Rules made thereunder as
may be prescribed."
High Court observed that a SCN must specify reasons for proposed action so as to enable noticee to respond to same. In the present case,
impugned SCN did not provide any clue as to which provisions of GST Act or GST Rules were allegedly violated by petitioner thus, impugned
SCN was incapable of eliciting any meaningful response. Therefore, impugned order passed pursuant to the impugned Show Cause Notice
cannot be sustained for the same reason. Thus the order was set aside matter was remanded to the concerned officer to consider afresh

3

Section 129

Penalty for Eway
Bill not generated
cannot be absolved
basis upon
reputation

Voltas Limited v.
State of Bihar
[2023] 154
taxmann.com 34
(Patna) (23-08-23)

The contention of the petitioner was rejected that merely because of reputation of the Company; the Court and the Department should assume
that there would be no evasion carried out. As far as the possibility of evasion, when e-way bills were not generated, there could be multiple
transport on the very same invoice which could lead to evasion. The High Court was not convinced that the petitioner could be absolved from
the liability, either on the ground of their reputation and not at all on the ground of a presumption against such Companies involving themselves
in evasion. Penalty levied was held to be valid since there was no reason as to why invoices were not included in the e-way bill generated

S.No

Section

Case Subject

Case

Held

1

Section
73 and
Section
74,
Section
122,
Section
125 and
126

a) Suppression of
facts to evade
tax cannot be
alleged as due
date for filing of
Annual Return
for 19-20 did not
expire
b) 3 offences
identified for
nonmaintenance of
records, thus
cannot be a case
of maximum
penalty U/Sec
125 since
penalty levied
was 25000/-
against a
maximum of
75000/-
c) Section 126 is
not applicable
for levy of
penalty under
Section 122

Suvarna
Fibrotech (P.)
Ltd. v.
Assistant
Commissioner
(ST) (FAC)
[2023] 148
taxmann.com
39 (Madras) (2-
1-2023

Enforcement Wing Officials inspected the place of business on 24-4-2019 followed by inspection on various dates and the last of the dates being
28-5-2019. For 'Financial Year 2019-20', there were three heads of defects noticed and observation of the Court for three defects was as follows-
(a) Invoking Provision of Section 74 for alleged sales suppression- Petitioner contended that for 19-20, he had time for reconciling till the due
date of annual return i.e. 31-3-2021, whereas inspection was in April of 2019. High Court by referring section 74 held that as petitioner had
time till 31-3-2021 to reconcile, it may not really qualify as suppression. However, petitioner would then fall into rigour of penalty of Section 73
as penalty for the purported suppression under Section 74 was only Rs. 3890/- and if Section 73(9) was to be applied, it would become Rs.
10,000/-. This left the writ petitioner in a situation which was described by the Court as “fire to frying pan or devil to deep sea” and writ petitioner
was worse off by filing writ petition. Therefore, writ Court deemed it appropriate to leave it at that and say that interference was refused but it
was made clear that it cannot be put against the writ petitioner that there is 'suppression of facts to evade tax' within the meaning of section
74(1) and it is only a case of tax not being paid within the meaning of section 73(1).
(b) For contravention of statutory provisions which were 3 in number being (i) non-maintenance of particulars of name/complete
address of suppliers qua goods and services chargeable to tax; (ii) non-maintenance of particulars of name/complete
address qua entities to whom goods and services were supplied and (iii) monthly production accounts showing quantitative details
of raw materials used in the manufacture and quantitative details of goods manufactured including the waste and by-products not
maintained qua sub-Rule(12) of Rule 56 of CGST and TNGST Rules- High Court observed that a careful perusal of section 125 made it
clear that it is more in the nature of a residuary provision. In the case on hand, as there were three specific non-compliances qua statutory
requirements, it was well open to invoke Section 125 with regard to each of the non-compliances and levy Rs. 25,000/- each, which would
have added upto Rs. 75,000/-. However, Original Authority levied penalty of only Rs. 25,000/- for all three non-compliances put together.
Therefore, maximum penalty to which a general penalty under section 125 can extend, has been exercised in the case on hand.
(c) GSTR -1 filed upto 2019 but GSTR 3 B not filed, tax collected but not paid to the Government-For levy of 100% Penalty for failure to pay
collected tax to the Government beyond a period of three months from the date on which such payment becomes due, High Court held that
by no means provision of Section 122 fits into Section 126 in the light of Explanation thereat. Explanation thereat makes it clear that the tax
liability or the amount of tax involved should be less than Rs. 5,000/- or it should be a omission or mistake in documentation which is easily
rectifiable in the same as an error apparent on the face of record. Sub-section (6) makes it clear that section 126 will not be attracted, when
penalty is expressed as a fixed percentage. In the case on hand, section 122(1)(iii) read with section 122(1) makes it clear that it is expressed
in both units namely a fixed sum as well as a fixed percentage. On this ground also section 126 does not come to the aid of the writ petitioner.

2

Section
73 and
Section
74 visa-vis
Section
75(12)

Interest payable on
delay in deposit of
tax need not
culminate under
Section 73/74 and
can culminate
straight-away in
Section 75(12)

[2023] 148
taxmann.com
166 (Madras)
Path Finder
India v.
Assistant
Commissioner
(State Tax)
(FAC) (3-1-
2023)

Petitioner contended that notice dated 24-3-2022 was served under Rule 142(1A) for non-payment of Interest against which a reply dated 25-4-
2022 was sent. Notwithstanding the reply, an order dated 30-9-2022 was made by which bank account was attached under Section 75(12).
Petitioner contended that since reply to the notice was made, therefore it should have culminated in proceedings under section 73/74.
High Court held that sub-section (12) of section 75 opens with a non obstante expression and is notwithstanding section 73 and section 74.
Therefore, as regards the interest component qua section 50(1) of TNGST Act, the argument that the notice dated 24-3-2022 should have
culminated in proceedings under sections 73 or 74 was a non-starter. This by itself drew the curtains on the captioned writ petition. However, the
court deemed it appropriate to provide one window to the writ petitioner by directing the respondent to consider the reply of the writ petitioner dated
25-4-2022 and take a call on the same as expeditiously as the official business of the first respondent would permit. Another ground raised by the
revenue was that the portal now itself points out the Interest but since the court had itself left it to the first respondent to deal with 25-4-2022 reply,
therefore the Court refrained itself from expressing any view or opinion on this submission

S.No

Case Subject

Case

Held

1

Four basic
components for
a valid levy of
tax

Govind Saran Ganga
Saran v. Commissioner of
Sales Tax-AIR 1985SC
1041)

Apex Court in the famous judgement held that components which entered into tax are well known. The first is the character of the imposition known
by its nature which transpires attracting the levy. The second is a clear communication of the person on whom the levy is imposed and which
is obliged to pay the tax. The third is rate at which the tax is imposed and the fourth is the measure or value to which the rate is applied for
computing the tax liability.

2

Phrase “subject
of tax”,
“measure of tax”
and nexus
between the two
explained

Union of India v. Bombay
Tyre International Ltd.
(AIR 1984 SC 420)
referring to

Hon’ble Apex Court referred to Seervai’s Constitutional Law wherein it has been stated that “Another principle for reconciling apparently conflicting tax
entries follows from the fact that a tax has two elements, the person, things, or activity on which the tax is imposed, and the amount of the tax.
The amount may be measured in many ways, but decided cases establish a clear distinction between the subject matter of a tax and the standard by
which the amount of tax is measured. These two elements are described as the subject of a tax and the measure of a tax. It also referred to another
decision in the matter of R.R. Engineering Company v. Zila Parishad Bareilly (AIR 1980 SC 1088) wherein it was held that it may be and is often
so, that the tax on circumstances and property is levied based on income which the assessee receives from his profession, trade, calling or
property.
Thereafter it held that therefore it is clear that levy of a tax is defined by its nature, while the measure of the tax may be assessed by its own
standard. It is true that standard adopted as measure of levy may indicate the nature of tax but it does not necessarily determine it.

3

Charging
Provision and
Computation
Provision

Commissioner Of Income
Tax, ... vs B. C. Srinivasa
Setty 1981 AIR 972

It was held by Apex Cour that character of computation provisions in each case bears a relationship to the nature of the charge. Thus, charging section
and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at
all, it is evident that such a case was not intended to fall within the charging section. Otherwise, one would be driven to conclude that while
a certain income seems to fall within the charging section there is no scheme of computation for quantifying it.

4

Definition of
"sale" widened
to include
forward contract
declared ultra
vires

Sales Tax Office, Pilibhit
v. M/s Budh Prakash Jai
Prakash (AIR 1954 SC
459)

It was held that that there is a well-defined and well-established distinction between a sale and an agreement to sell. The words "Taxes on the sale
of goods" in entry No. 48, List II, Schedule VII of the Government of India Act, 1935, conferred power on the Provincial Legislature to impose
a tax only when there has been a completed sale and not when there is only an agreement to sell. Accordingly, section 2(b) of the Uttar
Pradesh Sales Tax Act, XV of 1948, enlarging the definition of "sale" to include forward contracts must, to that extent, be declared ultra vires.
For the same reason Explanation III to section 2(h) which provides that forward contracts "shall be deemed to have been completed on the date originally
agreed upon for delivery" and section 3B of the Act must also be held to be ultra vires

5

Computational
Provision
cannot go
beyond the
scope of
Legislation

CHD Developers Limited
vs State Of Haryana And
Others on 22 April, 2015

Petitioner challenged validity of Rule 25(2) wherein in case of computation of VAT in case of Builder and Developer, it only provided for deductive
method for labour and services but did not reduce value of immovable property. High Court observed that 'deductive method' thereunder does not
provide for any deduction which relate to the value of the immovable property. The State Government thereafter filed an affidavit dated 24.4.2014,
wherein it was affirmed that developers/work contractors assessed as normal VAT dealers were entitled to all deductions admissible as per Law/Rules.
High Court held that essentially, value of immovable property and any other thing done prior to the date of entering of the agreement of sale is to be
excluded from agreement value. Rule 25(2) was held to be valid by reading it down to the extent indicated and subject to State Government
remaining bound by affidavit dated 24.4.2014. State Government to bring necessary changes in Rules in consonance with above observation.

6

Double Taxation
is not illegal as
per Article 265

Avinder Singh Etc vs
State Of Punjab & Anr.
Etc (SC) 1979 AIR 321

Apex Court held that there is nothing in Article 265 from which one can spin out the constitutional vice called double taxation. Observation of Bombay
High Court was referred which gave short shrift in Western India Theatres. Some undeserving contentions die hard, rather survive after death. The only
epitaph we may inscribe is: Rest in peace and don’t be re- born! If on the same subject-matter the legislature chooses to levy tax twice over
there is no inherent invalidity in the fiscal adventure save where other prohibitions exist.

7

Arbitrary Best
Judgement is
violative of
Article 265 of
Constitution

M. Appukutty vs Sales
Tax Officer, Spl. Circle I,
(Ker) AIR 1966 Ker 55

The High Court observed that there was no material before the authority which would in any manner justify the addition of 27,60,000 and odd Rupees
to the turnover. The addition made is arbitrary and capricious and is even mala fide in the sense that there was no application of mind to question
involved. It was also stated that the Court is not helpless to safeguard interests of victim of such decision by interfering under Article 226 of
the Constitution. Further in such cases Article 265 of the Constitution “No tax shall be levied or collected except by authority of law,” is also
violated. There is no collection of tax by the authority of law when assessments are made in this arbitrary fashion.

S.No

Section

Case Subject

Case

Held

1

Section
161

Limitation Period in
case of Rectification
Application and
application of order of
Suo Motu Extension
by Apex Court

Alagu Kannan v.
Assistant
Commissioner
(ST)(FAC) [2023] 154
taxmann.com 9
(Madras) (4-7-23)

High Court observed that application was filed well within the time as per the order of the Hon'ble Supreme Court in Suo Motu application
No. 21 of 2022 in Misc.Appl.No.665 of 2021 in Suo Motu Writ Petition (Civil) No. 3 of 2020 and as per this order the period from 15-3-
2020 till 28-2-2022 ought to be excluded. It was seen from the records that assessment order was passed on 6-1-2020 and the
rectification application ought to have been filed on or before 6-4-2020. However, period from 15-3-2020 to 6-4-2020 ought to be
excluded based on the suo motu extension order. Then the 90 days ought to be calculated from 1-3-2022, wherein the time is available
until 30-5-2022, but petitioner had filed the application on 2-9-2020 itself, which is within the period of limitation.
High court referred to its earlier judgement that while deciding application for rectification, earlier SCN for personal hearing issued to
the petitioner, for which, the petitioner has not responded etc., cannot be cited as a reason for rejecting rectification application

2

Section
29

Order cannot be
passed on grounds
not part of the SCN

C. P. Pandey & Co. v.
Commissioner of State
Tax [2023]
154taxmann.com 8
(Bombay) (31-7-23)

High Court observed that impugned order cancelling the registration appeared to be on ground completely outside the scope
of SCN. This would certainly cause prejudice to the petitioner as he was never granted an opportunity of being confronted with
such grounds in the SCN, so as to have an opportunity to meet such case of the department. Therefore, impugned order was
quashed and set aside, with liberty to the respondent to issue a fresh show cause notice to the petitioner.
Cases Referred- Ramji Enterprises & Ors. v. Commissioner of State Tax & Ors. [2023] 153 taxmann.com 598 (Bombay

3

Rule
86A

Blocking of ITC on
report that supplier
was non-existent and
was passing
ineligible ITC

Sri Rameswar Metal
House v. Assistant
Commissioner (ST)
[2023] 154
taxmann.com 5
(Madras) (3-8-23)

High Court declined to interfere with the order of blocking of the Input Tax Credit under Rule 86A stating that no case was made
out for interfering with the steps taken by the respondents blocking ITC as the petitioner appeared to have availed ITC on the
strength of invoices of the trader/supplier, which was not having any business that was reportedly engaged in passing on
ineligible input tax credit to various/numerous tax payers including the petitioner. The decision in Rajnandini Metal Limited case
[2022] 140 taxmann.com 325 (Punjab and Haryana) was distinguished on facts as intimation issued in present case categorically stated
that Office of the respondents had received report that trader/supplier was non-existing entity and had not conducted any business activity
at the address for which, registration was obtained and found to have passed on ineligible ITC.

4

Section
129

Penalty ought not to
be levied on some
small technical fault
for not carrying the eway bill, in the
absence of any
discrepancy in
document
accompanying the
goods

J. K. Cement Ltd. v.
State of U.P. [2023] 154
taxmann.com 1
(Allahabad) (28-8-23)

State of Madhya Pradesh had issued a notification dated 24-4-2018 mentioning therein 11 items for which only e-way bills were required
during transport and other items were exempted from accompanying the e-way bill. The goods transported were exempted from issuance
of Eway Bill in case of Intra Stat Movement. The movement originated from Gwalior, Madhya Pradesh and its destination was Panna,
Madhya Pradesh. If the goods were to come from Gwalior to Panna, it had to pass through Jhansi, Uttar Pradesh for a short distance to
enter again in Madhya Pradesh for its final destination at Panna. During movement through the State of UP, said goods were intercepted
on the ground that e-way bill was not accompanying. During transportation of goods, they were accompanied with tax invoices & G.R..
High Court observed that although goods were not accompanying the e-way bill, seizure ought not to have been made as in the case
in hand in State of Madhya Pradesh, the said goods were exempted from carrying the e-way bill at the relevant point of time. It was not a
case of the respondent authorities that the goods which were detained and were being unloaded in State of UP or found to be unloaded
in State of UP or intent to be unloaded in State of UP but on the contrary. Therefore, mainly on the ground of some small technical
fault for not carrying the e-way bill, the penalty ought not to have been levied in the absence of any discrepancy in document
accompanying the goods. In view of above, the impugned orders cannot be sustained in the eyes of law

5

Section
29

Amnesty for
revocation of
cancelled registration
shall be available to
registration cancelled
after 31-12-22

Active Pest Control v.
Deputy Commissioner,
Commercial Taxes
Department, Circle-XI
[2023]
154taxmann.com2
(Madras) (24-7-23)

Scheme for revocation of already cancelled registration had been extended up to 31.08.2023 vide Notification No.23/2023 – Central Tax,
dated 17.07.2023. Although the above scheme applied to those whose registrations which were cancelled before 31.12.2022, the
intention of the Government was to allow the registrants, whose registration have been revoked to revive their registration to
carry on the business. High Court considering the fact that benefit of the scheme was available for those, whose registrations were
cancelled before 31.12.2022, Court was of the view that the benefit of the scheme should ensure to persons like petitioner also whose
registrations was cancelled after the cut-off date. The Court disposed directed the petitioner to pay the arrears of tax together with
interest before cut-off date on 31.08.2023