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Part-130-One Pager Snapshot to Cases on Section 6, 29, 30, 50, 107 of CGST Act, 2017

-Since the period and subject of investigation of State and Central Authorities were different therefore no violation of Section 6 of CGST/SGST Act, 2017
-Period involved in filling and decision of revocation application to be excluded for computing limitation for filing of appeal against cancellation order
-Amount deposited in cash ledger allowed to be treated as Pre-Deposit of filing of appeal
-No interest payable as GSTR-3B filed with zero amount due to technical glitches without any fault of the Taxpayer
-Cancellation order passed without reason invalid but at the same time petitioner also levied with cost as he did not appear despite multiple opportunities

S.No

Subject

Case

Held

1

Since the period and subject of investigation of State and Central Authorities were different therefore no violation of Section 6 of CGST/SGST Act, 2017

Yash Alloys India v. Union of India [2023] 155 taxmann.com 594 (Bombay) (23-10-2023)

Primary grievance of the petitioner was that both State Authorities have undertaken investigation, on the subject matter, which is already under the investigation by the Central Authorities and thus there is violation of Section 6(2)(b).
The Court observed that proceedings were initiated by Central Authorities against the petitioner, however, subject matter of such investigation was in respect of the period from 1 July 2017 till 31 March 2021and relating to fraudulent ITC. Insofar as the investigation being resorted under the State Authorities, it was in respect of the period from 1 April 2021 to 4 October 2023. This was clarified by the Assistant Commissioner of State Tax as addressed to the petitioners. It appeared that although the petitioners were asked to furnish documents for the period from 1 July 2017 till 31 March 2021, the investigation, as informed to the petitioners, by the State Authorities would be for the period from 1 April 2021 to 4 October 2023. In such context, the court observed that the petitioners themselves had taken a fair stand by requesting State Authorities to investigate from 1 April 2021 till the date of such letter to avoid duplication of proceedings. Also the scope of investigation as has been undertaken by State Authorities was in respect of illegal refunds and thus, court did not accept that provisions of Section 6(2)(b) of the MGST Act, in any manner, were attracted in the facts of the present case.(Section 6 of CGST Act, 2017)

2

Period involved in filling and decision of revocation application to be excluded for computing limitation for filing of appeal against cancellation order

Sakthi Fashions v. Appellate Authority/Additional Commissioner of GST (Appeals-II) [2023] 155 taxmann.com 314 (Madras) (12-09-2023)

Petitioner was issued with SCN dated 27-1-2023 to show cause as to why registration obtained by the petitioner should not be cancelled. The order dated 6-2-2023 in Form GST REG-19 came to be passed cancelling the registration. Aggrieved by the same, the petitioner earlier filed application for revocation of cancellation of the registration in Form GST REG-19 vide order dated 6-2-2023. A SCN was issued on 27-2-2023. However, petitioner failed to reply to the same. Therefore, application filed for revocation of cancellation of registration was rejected on 14-3-2023. In view of the above, petitioner filed a Statutory Appeal on 14-7-2023 with a delay of 39 days against the order dated 6-3-2023.
The Court observed that the petitioner was prosecuting application filed for revocation of cancellation of the registration by filing an application on 16-2-2023 under section 30 of the GST Act which was rejected on 14-3-2023. The time taken in filing the said application shall be excluded while calculating the limitation period for filing of appeal. The Court disposed of the writ petition by directing the respondents to consider petitioner's appeal and pass appropriate orders on merits and in accordance with law without reference to the limitation on its turn. (Section 30 and 107 of CGST Act, 2017)

3

Amount deposited in cash ledger allowed to be treated as Pre-Deposit of filing of appeal

Batra Brothers (P.) Ltd. v. Union Territory of Ladakh [2023] 155 taxmann.com 266 (Jammu & Kashmir and Ladakh) (15-09-2023)

The appeal filed by the petitioner was dismissed for non-payment of 25% pre-deposit of the penalty as mandated under proviso (1) to sub-Section (6) of Section 107 of CGST Act 2017, read with Section 21 of the UTGST Act, 2017. The petitioner had instead of depositing the said pre-deposit amount with the revenue deposited the same in the electronic cash ledger.
The Court observed that from reading of Section 49(3) it was evident that amount available in the electronic cash ledger can be used by the petitioner for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made there-under in such manner and subject to such conditions and within such time as may be prescribed. Since, the requisite amount is already deposited in the electronic cash ledger by the petitioner it was considered appropriate and in the interest of justice to permit the revenue to take out and utilize the amount of pre-deposit in the manner, the pre-deposit is utilized. On doing so, the appeal was directed to be taken up for consideration on merits. (Section 107 of CGST Act, 2017

4

No interest payable as GSTR-3B filed with zero amount due to technical glitches without any fault of the Taxpayer

Vishnu Aroma Pouching (P.) Ltd. v. Union of India [2021] 129 taxmann.com 16 (Gujarat) (14-11-2019)

Petitioner had uploaded the return for August, 2017 within the period provided therefore and situation was that though petitioner had discharged tax liability aggregating Rs. 128.63 crores (rounded off), such liability was not shown as discharged in the electronic liability register only on account of glitches and crashing of the system on 20th and 21st September. Consequently, even though the petitioner had discharged the tax liability in time, it was still treated as a defaulter because all the figures in GSTR- 3B for August 2017 are zeros owing to system failure.
The Court observed that the petitioner had duly discharged tax liability of August, 2017 within the period prescribed therefore; however, it was only on account of technical glitches in the System that the amount of tax paid by the petitioner for August 2017 had not been credited to the Government account. Hence, the court held that the interests of justice would best be served if the declaration submitted by the petitioner in October, 2019 along with the return of September, 2019 was to treated as discharge of petitioner's tax liability of August, 2017 within the period stipulated under the GST laws. Consequently, petitioner would not be liable to pay any interest on such tax amount for the period 21-9-2017 to October, 2019. (Section 39 and 50 of CGST Act, 2017)

5

Cancellation order passed without reason invalid but at the same time petitioner also levied with cost as he did not appear despite multiple opportunities

[2023] 155 taxmann.com 317 (Allahabad)
Purna Trading Company
v. State of U.P. (10-10-2023

The Court observed that the order of cancellation was passed without assigning any reason and revocation application was also been rejected without assigning any cogent reason and thereafter appeal was also dismissed by the impugned order. Reason are the heartbeat of every conclusion. In the absence of reasons order becomes lifeless. Non recording of reasons renders the order to be violative of principles of natural justice. Reasons ensures transparency and fairness in decision making. It enables litigant to know reasons for acceptance or rejection of his prayer. It is statutory requirement of natural justice. Reasons are really linchpin to administration of justice. It is link between the mind of the decision taker and the controversy in question. Thus, failure to give reasons amounts to denial of justice. Thus, it was held that the impugned order cannot be sustained in the eyes of law. However, petitioner also neither submitted reply in pursuance of notice nor appeared before the respondent authority in spite of various dates fixed before the first appellate authority, therefore, some cost was thought fit to be imposed upon the petitioner. Thus, in the result, the writ petition was allowed and impugned orders dated 20-11-2020/7-12-2020, 21-1-2021 and 17-11-2021 are set aside subject to cost of Rs. 20,000/- (twenty thousand), which shall be deposited by the petitioner before the first appellate authority. (Section 29, 30 and 107 of CGST Act, 2017)