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-53-One Pager Snapshot to the Latest Cases

-Rejection of refund on account of availment of Higher Drawback
-Opportunity of being heard is different from opportunity of furnishing Reply
-CC account cannot be attached
-Non-Extension of Eway bill day of expiry being Saturday

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.

Part-47-One Pager Snapshot to the Latest Cases

-Extension of Time Limit for filing of refund application
-Seller to compensate Buyer for ITC not reflecting in GSTR-2A
-Order of Provisional Attachment cannot be in force for a period of more than one year
-Condition for AdditIonal payment for stay of demand cannot be imposed when Appeal has already been filed with 10% Pre-Deposit

S.No

Section

Case Subject

Case

Held

1

Section
54

Extension of Time
Limit for filing of
refund application

Geeta Enterprises
v. Union of India
[2023] 152
taxmann.com 27
(Delhi)

The order-in-original dated 11.05.2021 rejected the petitioner's claim for refund of ITC for the month of April, 2018 as time barred. The
order-in-appeal rejected petitioner's appeal. The petitioner contended that vide notification dated 05.07.2022 (Notification No.13/2022 -
Central Tax) period of limitation for filing an application for refund under Sections 54 and 55 of the CGST Act has been relaxed.
The High Court set aside the impugned orders and the petitioner's application were restored for deciding the same on merits.

2

Section
16

Recipient cannot be
held liable for
incorrect filing of
GSTR-1 by the
supplier and
supplier directed to
refund the amount of
demand recipient
had to pay for
incorrect filing of
GSTR-1 by supplier
as the said amount
not reflected in
GSTR-2A of
Recipient

Agrawal &
Brothers v. Union
of India
[2023] 152
taxmann.com 111
(Madhya Pradesh)

The instant writ petition was filed by M/s Agarwal and Brothers against the Railways for incorrect reporting of Transaction in GSTR-1 and
due to which they had to pay a demand of Rs 13,38,544/- to GST Department as the said amount of ITC was not reflected in GSTR-2A.
The petitioner purchased for a total consideration of Rs.51,97,142/- including the GST of Rs.9,35,486/-. The petitioner thereafter came to
know that Railways had committed default in reporting the entries by not reporting the auction sales invoice duly paid by the petitioner in
GSTR-1 due to which the auction sale invoice was not reflected in the petitioner's GSTR-2A. GST Department issued a demand notice
dated 05.02.2020 to the petitioner demanding input tax wrongly availed with interest. In order to avoid the cancellation of GSTIN due to
non-payment of the GST charges, the petitioner agreed to repay the requisite GST charges on aforesaid entries for the year 2017-18 under
protest. Final order was passed by the Officer confirming demand of ITC amounting to Rs.9,34,096/- together with interest of Rs.4,04,451/-
The High Court stated that there is no recovery of GST against the petitioner since the amount has already been deposited. However, it is
a settled law that no one cannot be made to suffer for the fault of another. Since this deposit of GST was not reflected in GSTR-2A of the
petitioner due to fault of Railways, therefore, petitioner had to pay the GST to the department with interest again in order to avoid the
cancellation of GSTIN, therefore, he is entitled to seek the return of Rs.13,38,544/- from Railways.
The Writ Petition was allowed and Railways was directed to return the amount of Rs.13,38,544/- to the petitioner and Railways was stated
to be at liberty to submit a claim before the GST department as the same has been paid by the petitioner and if such claim is submitted,
the competent authority GST Department shall decide the same in accordance with the law. The Writ Petition was allowed with a cost of
Rs. 10,000/- in favour of the petitioner payable by Railways

3

Section
83

Order of Provisional
Attachment cannot
be in force for a
period of more than
one year

Sri Om Traders v.
Principal
Additional Director
General of GST
Intelligence Officer
DGCI [2023] 152
taxmann.com 115
(Karnataka)

The High Court stated that in the present case, the period of one year from the passing of the provisional orders of attachment has expired
as evident from the details furnished and the provisional orders of attachment automatically by operation of law have been ceased to be in
operation. Accordingly, the impugned orders of attachment were declared to be no longer in operation from the expiry of the period of one
year as stipulated under Section 83(2) of the Act.

4

Section
107

Additional condition
for payment for stay
of demand cannot
be imposed when
Appeal has already
been filed with 10%
Pre-Deposit

Liakhat Ali Mallick
v. State of West
Bengal [2023] 152
taxmann.com 114
(Calcutta)

The appellant had earlier challenged notice dated 13th February, 2023 on the ground that the appellant has paid the entire tax as demanded
and has also preferred an appeal before the appellate authority and before the expiry of the period for filing the appeal, the garnishee notice
was issued. The learned Single Bench thereafter granted stay of the garnishee notice but imposed a condition that the appellant had to
deposit 20% of the interest liability. The decision was challenged.
The High Court reversing the decision of Single Bench held that considering that the statutory requirement mandates payment of only 10%
of the disputed tax, therefore a condition need not be imposed by directing the appellant/petitioner to pay 20% of the interest

Snapshot-20-Snapshot of Latest GST Cases

-RFD-08 issued for issues to be covered by RFD-03
-Manpower supplied to Central/State Government for housekeeping, cleaning, security, Data Entry Operator not exempt
-ITC not allowed for Pre-Fabricated Sheds

S,No

Section

Case Subject

Case

Held

Cases Referred

1

54

The petitioner had credit of CENVAT of a sum of Rs.10 lakh (approx) for the months of April, May, June, 2017. The law entitled assessee
to seek refund of CENVAT credit within a period of one year from year from the date of export. It all started with an application dated
25.10.2017 where the petitioner sought refund of CENVAT credit under Rule 5. With the onset of GST, the petitioner was required to make
a debit to the CENVAT credit account at the time of effecting the claim but the same was disabled and thus the assessee could not apply
for the refund. The petitioner thereafter filed an application for refund under Section 54 of the Act on 17.01.2019. The claim was rejected
as against which a first appeal was filed which also came to be rejected on 30.07.2020. The reasoning set out in the order of the appellate
authority was based on the provisions of Section 54 and the second proviso to Section 142(4) of the Act as well as a circular issued by
the Board on 15.03.2018. The petitioner while not challenging the order of the Appellate Commissioner, made a further representation on
28.08.2020. The impugned order had been passed on 03.11.2010 on the sole ground that, as the order of the first appellate authority
dated 30.07.2020 has attained finality, the question of refund does not arise.
The High Court held that the eligibility of the petitioner to refund on a substantive basis has itself, never been questioned. The denial was
based solely on a technical basis. That apart, the fact that Notification No.27/12 (which propounded credit to be debited from Cenvat
Account) had been held to propound an incorrect condition by the High Court as well as by the CESTAT ought to have merited
consideration with the authority. Instead he does not advert to this aspect of the matter at all. Further, the claim was fully supported by the
provisions of Section 142(3) of the Act. Thus, impugned order was held to wholly incorrect in law and wad held liable to be set aside

[2023] 150
taxmann.com
515 (Bombay)
Knowledge
Capital
Services (P.)
Ltd. v. Union
of India

The High Court observed that in the present case Petitioner had applied for a refund. The Petitioner received an acknowledgment under Form GST
RFD-02 with a Nil remark, meaning, thereby, the application for refund was acknowledged. There were no lacunae pointed out under the said
acknowledgment. No deficiency was pointed out; neither deficiency memo, as contemplated under Rule 90 (3) of the CGST Rules of 2017 in Form
GST RFD-03, was issued to the Petitioner. The Petitioner directly received Form GST RFD-08 under Rule 92 (3) of the CGST Rules of 2017 for
rejection of the application for refund. There were no reasons given in the said Form GST RFD-08, and it was stated that the Exports Defects Memo
Knowledge Capital-pdf.pdf is a file that is attached. However, the said file was not annexed to the reply affidavit.
The High Court observed that the deficiencies ought to have been communicated to the Petitioner under Form GST RFD -03 as per Rule 90 (3) of
the CGST Rules of 2017. Instead, these deficiencies were made a ground to issue a show cause notice for rejection of the refund. Thereafter,
application was rejected on the ground that no reply was received to the show cause notice. There was no opportunity given to the Petitioner to
rectify lacunae, and the deficiencies which were to be informed through Form GST RFD-03 were sent in a file attached in Form GST RFD08. This
deprived the Petitioner to submit a fresh refund application as contemplated under Rule 90 (3) of the CGST Rules of 2017. there was nonadherence
with the procedure envisaged under the Rules to use the correct Forms prescribed. Not only Form GST RFD-03 was not issued, but a file is sought
to be attached to Form GST RFD-08, which has a different Form. The matter was remanded by the High Court to decide afresh directing that If there
are deficiencies in the Petitioner's application, the same may be informed to the Petitioner as per Form-GST-RFD-03, and if not, the application be
processed as per law

2

HSN 99

Manpower
supplied to
Central/State
Government
for
housekeeping,
cleaning,
security data,
entry operator
not exempt

[2023] 150
taxmann.com
507 (AAARGUJARAT)
Sankalp
Facilities and
Management
Services (P.)
Ltd

The appellant contended that the manpower services provided by them to the Government authorities/ entities are exempted supplies as they are
provided by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any
function entrusted to a Municipality under Article 243W of the Constitution of India.
It was held that if the intention of the legislature was to exempt all the services provided to Central Government, State Government or Union Territory
or Local authority then there was no need to specify activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution
or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Even though the appellant is providing services to the
Government offices concerned, but they are in no way related to the function entrusted to a Panchayat under article 243G of the Constitution or
function entrusted to a Municipality under article 243 W of the Constitution which is carried out by the Government concerned.

3

17

Input Tax
Credit not
allowed for
Pre-Fabricated
Sheds as it is
an immovable
Property

[2023] 150
taxmann.com
506 (AARTELANGANA)
Sanghi
Enterprises

Applicant is constructing a Pre fabricated shed (‘PFS’) on land and it is intended to be used as a permanent structure for the purpose of conducting
business, which has beneficial enjoyment of the land on which it is being built. The applicant intends to use technology, for the construction of the
‘PFS’, which involves the application of pre-fabricated structures and also civil work for supporting the pre-fabricated structure and developing the
RCC platform of the ‘PFS’. If not for the purpose of beneficial enjoyment by way of conducting business on the RCC platform, the ‘PFS’ has no
separate existence. The ‘PFS’ being constructed is, therefore, an immovable property and the input tax credit is not admissible on the inward supplies,
which may include Works contract services, for its construction, as the credit of such tax comes under category of blocked credits as per section
17(5)(d) and section 17(5)(c) of the CGST/TGST Act’2017.
Cases Referred-Solid & Correct Engineering Works (2010) 252 ELT 481 (SC), Sirpur Paper Mills Ltd 97 ELT 3 (SC), f Triveni Engineering &
Industries Ltd. & Anr. V. Commissioner of Central Excise 2000 (120) ELT 273 (SC), n Quality Steel Tubes (P) Ltd. V. CCE, U.P. 1995 (75) ELT
17 (SC), Mittal Engineering Works (P) Ltd. V. CCE, Meerut 1996 (88) ELT 622 (SC), Circular No. 58/1/2002-CX dated 15/01/2002