Part-157-One Pager Snapshot to Cases on Section 16, 29, 74, 107,125,129 of CGST Act, 2017

Part-145-One Pager Snapshot to Cases on Section 16, 54, 74, 129 of CGST Act, 2017

-No adverse inference to be drawn, if in e-way bill weight mentioned was more than actual found, and if, after issuance of notice and before seizure order passed, correct e-way bill was produced cancelling earlier e-way bill. Opportunity to rebut to be given, if revenue intends to rely upon fresh evidence against the assessee.

-Input Tax Credit cannot be denied in cases wherein migration could not be completed due to technical glitches and subsequently, registration was granted from retrospective date.

-Once a question has reached finality, it could not be re-considered when no appeal was preferred against the earlier assessment and revenue cannot be permitted to adopt an inconsistent stand in a subsequent assessment where the facts and position of law is identical.

-No interference required wherein order passed ex-parte as no reply was filed even though sufficient opportunity was granted and even extension was sought by the petitioner

Part-98-One Pager Snapshot to the Latest Cases on entitlement of ITC as per the provisions of Section 16 of CGST Act, 2017-Part-I

-Seller to be examined in case wherein supply of goods challenged
-Recovery to be first affected from the seller
-ITC to be given for transactions entered by the recipient before cancellation of registration of the supplier
-In absence of documents, mere reflection of credit in GST Records electronically is not sufficient.
-Section 16 to be followed strictly, substantive liability on supplier & protective liability on recipient. Mechanism to brought in place to address the same.
-SCN can be treated as a communication under Section 42(3) intimating mismatch between the ITC claimed by recipient and tax paid by the supplier
-Supporting document can be furnished in reply to the SCN that tax has been paid

S.No

Case Subject

Case

Held

1

Seller to be examined
in case wherein supply
of goods challenged
Recovery to be first
affected from the seller

D.Y. Beathel
Enterprises v. State
Tax Officer (Data
Cell), Tirunelveli
[2021] 127
taxmann.com 80
(Madras)

The Court observed that if the tax had not reached the kitty of the Government, then the liability may have to be eventually borne by one party, either
the seller or the buyer. In the case on hand, Court observed that it did not appear that any recovery action has been taken against the seller. Also,
assessment of the seller was completed by excluding the subject transactions alone The Court was unable to appreciate the approach of the authorities
as when it has come out that the seller has collected tax from the purchasing dealers, the omission on the part of the seller to remit the tax in question
must have been viewed very seriously and strict action ought to have been initiated against him. Also further, apart in enquiry in question, seller ought
to have been examined and confronted, because respondent had taken a stand that the petitioners have not even received the goods and had availed
input tax credits on the strength of generated invoices. Thus, impugned orders were quashed and remitted back on account of non-examination of
seller and non-initiation of recovery action against the seller the first place.

2

ITC to be given for
transactions entered by
the recipient before
cancellation of
registration of the
supplier

LGW Industries Ltd.
v. Union of India
[2022] 134
taxmann.com 42
(Calcutta)

The writ petition was disposed of by remanding the matters to be considered afresh on the issue of their entitlement of benefit of input tax credit in
question. The authorities were directed to consider the documents which petitioners wanted to rely in support of their claim of genuineness of the
transactions in question and to consider as to whether payments on purchases in question along with GST were actually paid or not to the suppliers
(RTP) and also to consider as to whether the transactions and purchases were made before or after the cancellation of registration of the suppliers
and also consider as to compliance of statutory obligation by the petitioners in verification of identity of the suppliers (RTP). It was further directed
that if it is found upon consideing the relevant documents that all the purchases and transactions in question were genuine and supported by valid
documents and transactions in question were made before the cancellation of registration of those suppliers and after taking into consideration the
judgments of the Supreme Court and various High Courts which have been referred in this order and in that event the petitioners shall be given the
benefit of input tax credit.
Similar ratio also followed in Sanchita Kundu v. Assistant Commissioner of State Tax [2022] 142 taxmann.com 576 (Calcutta) and Gargo
Traders v. Joint Commissioner, Commercial Taxes (State Tax) [2023] 151 taxmann.com 270 (Calcutta).

3

In absence of
documents, mere
reflection of credit in
GST Records
electronically is not
sufficient.

Tvl. Ashok Trading
Co. v. State Tax
Officer, Inspection
Cell-III, Trichy [2022]
141 taxmann.com
227 (Madras)

The Court observed that the petitioner had no documents to substantiate a valid availing of input tax credit and mere reflection of the amounts in the
Goods and Service Tax records electronically is not sufficient. If credit is to be allowed and adjusted on such transactions, it would lead to unintended
benefits being conferred

4

Section 16 to be
followed strictly,
substantive liability on
supplier & protective
liability on recipient.
Mechanism to brought
in place to address the
same

Pinstar Automotive
India (P.) Ltd. v.
Additional
Commissioner
[2023] 149
taxmann.com 13
(Madras

The Court observed that the provisions of section 16 are to be observed strictly, such that, there is no jeopardy to the interests of the revenue. The
provisions of the statute has, assimilating wisdom of experience from the erstwhile tax regimes, gone one step further to ensure that the interests of
the revenue are protected by providing for a mandate that the tax liability is defrayed/met either at the hands of the supplier or the purchaser, the
petitioner in this case. Thus, no fault can be attributed to the revenue in this regard. An additional factor is that where the tax liability has been met by
way of reversal of ITC and similarly recovery is effected from the supplier as well, this would amount to a double benefit to the revenue. Thus, while
the Department may reverse credit in the hands of the purchaser, this has to be a protective move, to be reversed and credit restored if the liability is
made good by the supplier. Thus, the substantive liability falls on the supplier and the protective liability upon the purchaser. A mechanism must be
put in place to address this situation.

5

SCN can be treated as
a communication under
Section 42(3) intimating
mismatch between the
ITC claimed by
recipient and tax paid
by the supplier
Supporting document
can be furnished in
reply to the SCN that
tax has been paid

Mahendra Feeds
and Foods (Trading
Division) v. Deputy
Commissioner of
GST and Central
Excise [2022] 143
taxmann.com 248
(Madras)

It was contended by the revenue that ITC claimed by petitioner was a wrong claim because, there was a complete mismatch between the supplier
and the petitioner, as the supplier, in support of its outward tax has not paid the tax or not shown the same in their accounts, as if that they paid the
tax. It was contended on behalf of petitioner that under section 42(3) of GST Act there was an obligation on the part of Revenue to communicate to
both the supplier and recipient about mismatch of ITC. Once such a communication is issued under the rule in consonance with section 42(3), there
must be a procedure to be followed. However, since no such communication was issued and SCN was issued, which has also been responded by
the petitioner saying that the supplying dealer has paid the tax, it is a procedural violation.
The Court observed that the rectification would be possible at the hands of the petitioner who was the dealer who received the goods by way of input
supply, at least at the time of receipt of SCN issued in this regard by the Revenue. After receipt of the SCN, if at all the petitioner wanted to rectify the
mismatch, supporting documents to substantiate that output tax had been paid by the supplying dealer should have been procured and filed along
with the reply, which they failed to do. Therefore, technical reason that under section 42(3) it should have been communicated at the earliest point of
time and therefore SCN cannot be treated as communication intimating mismatch between the supplier and petitioner, cannot be countenanced