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

S.No

Section

Case Subject

Case

Held

1

Section
67

Issue of prohibitory
order under
Section 67(2) not a
stop gap
arrangement to
decide whether to
seize goods or not
Notice issued after
six months from
date of prohibition
not invalid but
goods to be
returned in view of
Section 67(7)

Best Crop
Science (P.)
Ltd. v.
Superintendent,
CGST [2023]
154
taxmann.com
476 (Delhi)

The Court considered Section 110 of Customs Act which it held to pari-materia to Section 67 of CGST Act, 2017. It further observed that action for
seizure of the goods is required to be predicated on a reason to believe that the goods are liable for confiscation. This condition was required to be
satisfied, before passing any order under the proviso to Section 67(2) of the CGST. The first proviso to Section 67(2) permits to pass an order
prohibiting tax payer from parting with the goods in cases where goods were liable for seizure, but is not practicable to do so. Order of prohibition is
not a stop gap arrangement for the department to take an informed decision whether to seize goods or not seize goods.
Further regarding provision of Section 67(7) wherein concerned authorities are required to return the seized goods if a notice is not issued within
a period of six months; high court stated that the contention that the although goods are required to be returned but order of prohibition can continue
indefinitely was held to be militating against the scheme of Section 67 of the CGST Act.
However, for the contention that the impugned show cause notice was liable to be set aside because it was not issued within the period of six
months from the date of the order of prohibition was held to be unmerited. The consequence of Sub-section (2) of Section 67 of the CGST Act merely
provides that if no notice is issued within the stipulated period, the goods seized were liable to be returned. It did not postulate that the notice, issued
after six months, was invalid. Thus, petitioner's challenge to the impugned show cause notice on the ground that it was issued after six months of the
order of prohibition was rejected.

2

Section
73

Order passed
without recording
contentions and
without discussion
on the issues
raised by Petitioner
quashed

Savvy Fabrics
v. Union of India
[2023] 154
taxmann.com
451 (Bombay)

Petitioner contended that the impugned order was illegal, inasmuch as, although a detailed reply to the show cause notice was submitted by the
Petitioner as also a personal hearing was granted to the Petitioner, the impugned order did not record any reasons/findings regarding such contentions
as urged by the Petitioner. It was further stated that there was no invocation of Section 122 in SCN regarding penalty.
The Court observed that in the impugned order, in the paragraph titled "findings", none of the contentions as urged by the Petitioner were recorded
as also there was no discussion whatsoever on the issues as raised by the Petitioner. This more particularly, when the impugned order raises a
demand against the Petitioner on interest payable under section 50(3) as also a penalty being imposed under section 122 of the CGST/SGST Act,
2017 read with Section 73(9). Thus, impugned order was quashed with liberty to issue fresh SCN

3

Section
29

SCN Issued
without containing
any reason for the
allegations made

Rahul Kumar
Jain v. Union of
India [2023] 154
taxmann.com
450 (Delhi)

SCN merely alleged that petitioner's GST registration was proposed to be cancelled on account of fraud, wilful misstatement or suppression of facts;
however, it did not provide any specific reason and it did not provide any clue as to the facts which were allegedly suppressed. Petitioner responded
by denying the allegations and also asked why and on what grounds, department alleged that they have taken registration by means of fraud, wilful
misstatements or suppression of facts so that they can submit defence and detailed reply in this regard.
The Court observed that it was evident that petitioner had no clue as to why its GST registration was sought to be cancelled and petitioner's request
for providing further specific grounds was not acceded to and no further information was provided to the petitioner. Thus, impugned order was quashed
being devoid of any reason as it only reiterated that it was order for cancellation of registration in reference to the SCN

4

Section
129

Circular No. 76
Dated 31st Dec’ 18
to be considered
while deciding levy
of penalty U/Sec
129(1)(a)/(b)

Western Carrier
India Ltd. v.
State of U.P.
[2023] 154
taxmann.com
449 (Allahabad)

Petitioner was aggrieved by the order whereby liability was fixed upon it to pay penalty in terms of Section 129(1)(b). It was stated that the goods
transported were accompanied by E-Way bill and invoice etc. and authorities erred in imposing penalty upon petitioner inasmuch as by virtue of
Circular No.76/50/2018 dated 31st December 2018, petitioner was liable to be treated as owner of the goods and consequently provision of section
129(1)(a) alone could have been invoked.
The Court stated that goods in transit were carrying necessary documents in the form of E-Way bill and invoice etc, therefore, department ought to
have considered the petitioner's prayer for release of goods and vehicle upon compliance of the provisions contained U/s 129 (1) (a). Thus, direction
was issued to act in terms of the Circular and release goods upon compliance of conditions stipulated U/s 129(1)(a).

5

Section 107

Failure to consider
submissions of
petitioner by proper
officer and
appellate authority

KS
Commodities
(P.) Ltd. v.
Assistant
Commissioner
[2023] 154
taxmann.com
447 (Delhi)

The petitioner filed a refund application. SCN was issued to the assessee and which was duly responded. The Adjudicating Authority considered
the reply but rejected the petitioner's application for refund, inter alia, on the ground that the petitioner was unable to co-relate the input supplies
respect of which ITC refund claim was made and the export of the commodities. The petitioner appealed against the said order, however, same was
rejected by impugned order. The petitioner contended that although required proofs were submitted but neither Order-in-Original nor the impugned
order passed by Appellate Authority discussed the material produced by the petitioner.
The Court observed that none of the said orders indicated any reason as to why authorities did not consider the said material to be relevant for
establishing that input supplies in respect of which refund was claimed, were directly corelated to export of sugar. In view of the above, impugned
order was set aside and appeal restored with Appellate Authority to examine the material relied upon and to state the reasons if he was of the view
that evidences on record cannot be corelated to the export of sugar as claimed by the petitioner

S.No

Section

Case Subject

Case

Held

1

Section
54

Rejection of
refund on
account of
availment of
Higher
Drawback

Sunlight Cable
Industries v.
Commissioner of
Customs [2023] 152
taxmann.com 247
(Bombay)

The Petitioner had availed drawback wherein both higher and lower draw back rates were same and department rejected the refund for the
month of August 2017 stating that Petitioner had availed a higher duty drawback on its exports under the Export Invoice and corresponding
Shipping Bill.
The High Court observed that rationale for not allowing the refund of IGST for those exporters, who claimed higher duty drawback was that
the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback
was already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax had been
subsumed in the GST. Thus, drawback rates being the same, it represented only the Customs elements, which did not get
subsumed in the GST and thus, the writ-applicant could be said to have availed double benefit i.e. of the IGST refund and higher
duty drawback.
Cases Referred- Amit Cotton Industries v. Principal Commissioner of Customs 2019 (29) G.S.T.L. 200 (Guj.), Gujarat Nippon International
Pvt. Ltd. v. Union of India 2022 (64) G.S.T.L. 45 (Bom.), Kishan Lal Kuria Mal International v. Union of India [2023] 95 GST 177 (Delhi)

2

Section
73

Opportunity of
being heard is
different from
opportunity of
furnishing the
Reply

Preca Solutions India
(P.) Ltd. v. Assistant
Commissioner [2023]
152 taxmann.com 269
(Andhra Pradesh)

The petitioner had sought an opportunity of being heard personally but the order was passed without giving any such hearing. It was
contended by the department that a show-cause notice was issued and the petitioner had submitted an explanation in response to the
same therefore, it cannot be construed by any stretch of imagination that the impugned order was in violation of principles of natural justice
and in contravention of the mandatory requirements of law.
The High Court observed that petition disclosed in unequivocal terms that the petitioner made a request to the respondents to
afford an opportunity of personal hearing. Therefore, it was held that impugned order passed was not only in violation of
mandatory provisions under sub-section (4) of Section 75 of the Act, 2017, but also in violation of the principles of natural justice.
Therefore, the impugned order was liable to be set aside.

3

Section
83

Cash Credit
account cannot
be
provisionally
attached

J.L. Enterprises v.
Assistant
Commissioner [2023]
152 taxmann.com 278
(Calcutta)

The petitioner had contended that the cash credit account of the petitioner was provisionally attached by the officer. This present appeal
was an intra-Court appeal directed against the order dated 25.05.2023 passed in WPA 12132 of 2023. By the said order the writ petition
was disposed of by relegating the appellant to resort to the remedy provided under Section 159(5) of Central Goods and Services Tax
Rules 2017 (for short "the Rules").
The High Court observed that it goes without saying that the Court has accepted the legal position which has been settled by various
decisions which have been referred to in the impugned order. If such be the case, no useful purpose will be served by relegating the
petitioner to avail the remedy under sub-Section 5 of Section 159 of the Rules. Therefore, the writ Court ought to have allowed the writ
petition in its entirety instead of relegating the appellant to a remedy which is inapplicable to the cases where there is an order of provision
attachment of a cash credit account. Therefore, the appeal was allowed and the order passed by the learned writ Court was set aside
insofar as it directed the appellant to avail the remedy under Sub-Section 5 of Section 159 of the Rules and in other respect where
the learned writ Court had rightly accepted the legal position stood confirmed.

4

Section
129

Non-Extension
of Eway bill
being day of
expiry being
Saturday.

Sunil Yadav v. Assistant
Commissioner [2023]
152 taxmann.com 270
(Calcutta

The petitioner's vehicle, bearing registration number WB33C6286 which was carrying goods covered by e-way bills was intercepted on 4th
February, 2023. The petitioner also said that under the applicable rules, the petitioner was entitled to revalidate the e-way bill within 8 hours.
from the time it lapsed and as such the time of interception was within the period. The petitioner contended that 4th February, 2023, being
Saturday and the petitioner even if had made an application for revalidation of e-way bill, the same in all likelihood would not have been
revalidated on the same date, being Saturday.
The High Court relied upon the judgement in the matter of Pushpa Devi Jain v. Assistant Commissioner of Revenue, Bureau of
Investigation, North Bengal Headquarters & Ors.) and set aside the detention order.