Part-147-One Pager Snapshot to Cases on Section 74, 107, 129 of CGST Act, 2017 and Section 5 of IGST Act, 2017

-Appellate Authority has a duty to look into the merits of the matter and also examine grounds raised by appellant, even if there is no presence recorded of appellant before the Appellate Authority and decide issue on merits

-Alhtough E-way Bill was expired, but since goods were accompanied with E-tax invoice & E-way bill and neither of them were cancelled, thus movement and genuineness cannot be disputed without proving intent to evade.

-Failure to consider reply filed deprives petitioner with the opportunity to have two occasions of matter to be adjudicated and avail two well considered opinion by two Authorities, viz., Assessing Officer and Appellate Authority.

-At the time of import of goods, Competent Authority under Customs Act is empowered to make assessment regarding claim of exemption from IGST under section 28 of the Customs Act.

Part-81-One Pager Snapshot to the Latest Cases

-Conclusion of entire proceedings under Section 74 within 2 months of Notice was not reasonable period and considered as failure to give proper Opportunity
-Taxpayer paid entire tax, interest although after one month but allowed benefit of 15% Penalty
-High Court Lays down guidelines for recovery of demand in case of rejection of Appeal pending constitution of Tribunal
-Recovery of Entire demand on rejection of Appeal held to be excessive use of power
-When an Appellate Authority was not constituted what could have been recovered is only for twenty per cent

S.No

Section

Case Subject

Case

Held

1

Section 74

Conclusion of
entire proceedings
under Section 74
within 2 months of
Notice was not
reasonable period
Taxpayer paid
entire tax, interest
although after one
month but allowed
benefit of 15%
Penalty

P. R.
Hardwares v.
State Tax
Officer,
Tuticorin.
[2023] 154
taxmann.com
151 (Madras)

In the present case the notice was issued on 1-12-2022 and 3-1-2023 and Summary Order was passed on 7-3-2023, i.e. within two months of
issue of notice. Petitioner contended that Section 74(10) states that officer shall issue the order under section 74(9) within a period of five years
from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or
utilized relates to or within five years from the date of erroneous refund. Therefore, since the entire proceedings have been concluded within
one month, therefore, respondent has failed to grant opportunity granted under section 74(9) and 74(10). Taxpayer further contended that
since he had paid entire tax demand on 26-6-2023, therefore he was entitled to the benefits under section 74. However, Learned Additional
Government Pleader submitted that the petitioner has paid the tax beyond the period of one month from the date of the order, hence the petitioner
was not entitled to such concession granted under the section 74.
High Court observed that even if period of five years is considered as outer time limit prescribed for the respondents to pass orders but then
assessee must be given sufficient opportunity. Even though provisions prescribe five years as outer limit but provisions do not prescribe minimum
time from passing order, in such circumstances the respondents ought to have passed order within reasonable time. Two months period was not
reasonable time and petitioner was held right in stating that adequate opportunity was not granted to the petitioner. The High Court further held
that since petitioner has already paid the entire tax liability and the interest. Therefore, Court directed the department to collect 15% of
penalty alone. On such payment respondents were directed to conclude the proceedings in respect of the notice as stated in section
74

2

Section 78

High Court Lays
down guidelines
for recovery of
demand in case of
rejection of Appeal
pending
constitution of
Tribunal
Recovery of Entire
demand on
rejection of Appeal
held to be
excessive use of
power
When an Appellate
Authority was not
constituted what
could have been
recovered is only
for twenty per cent

Sita Pandey
v.
State of Bihar
[2023] 154
taxmann.com
152 (Patna)

The only issue with which the high court was concerned was with the recovery made from bank accounts the assessee, on the very
next day of rejection of the appeal.
-Applicability of Provisions of Section 78-High Court observed that Section 78 allows three-month time to taxable person to pay amount due
from date of service of order. Proviso to section 78 enables proper officer in expedient situations, for reasons recorded in writing, to require taxable
person to make such payment within such period, less than a period of three months, as may be specified by him.
-Even if coercive action to be taken, it has to be taken for 20% of Tax Amount- The Legislature had, in the event of an appeal filed to the
Tribunal, only intended twenty percent of the tax dues alone to be paid; on which payment the entire demand was liable to be stayed till the
disposal of the appeal. Thus, even if coercive action could have been taken the tax officer should have confined it to the twenty percent of the
total amounts assessed, in addition to the ten percent paid at the first appellate stage and any admitted tax, if remaining unpaid.
-Guidelines for Recovery- High Court following dictum laid down in UTI Mutual Fund v. Income-Tax Officer and Others; [2012] 345 ITR 71
(Bom), issued following guidelines in so far as the recoveries are concerned:-
1. There shall be no recovery of tax within the time limit for filing an appeal and when a stay application is filed in a properly instituted appeal,
before the stay application is disposed of by the Appellate Authority;
2. Even when the stay application in the appeal is disposed of, the recovery shall be initiated only after a reasonable period so as to enable the
assessee to move a higher forum;
3. However, in cases where the Assessing Officer has reason to believe that the assessee may defeat the demand or that it is expedient in the
interest of Revenue, as is provided under the proviso to Section 78, there can be a recovery but with notice to the assessee, which notice
shows the reasons for initiating it and specifies the lesser time within which the assessee is directed to satisfy the dues;
4. Though a bank account could be attached; before withdrawing the amount, reasonable prior notice should be furnished to the assessee to
enable the assessee to make a representation or seek recourse to a remedy in law;
Therefore, when an Appellate Authority was not constituted even when the Assessing Officer acted under the proviso to Section 78 what could
have been recovered is only twenty per cent of the tax amount due in addition to that paid up to institute a first appeal. The High Court also held
that the officer who acted in complete derogation of the statutory provisions and established principles of law, should pay an amount of Rs. 5,000/-
(five thousand) as cost to the assessee; a receipt of which shall be filed within two weeks in the instant writ petition

Part-46-One Pager Snapshot to the Latest Cases

-Summary SCN in DRC-01 and Summary Order in DRC-07 are invalid in absence of detailed SCN and order respectively
-Revocation of Cancelled Registration and Entitlement to Lodge claim for ITC for the intervening period
-Invoking Provisions of Section 129 and then switching to Section 130 without providing release of goods under Section 129.
-Delay in disbursement of refund
-Opportunity of being heard not provided

S.No

Section

Case Subject

Case

Held

1

Section
73

Summary SCN in
DRC-01 and
Summary Order in
DRC-07 are invalid
in absence of
detailed SCN and
order respectively

Shree Ram
Agrotech v. State
of Jharkhand
[2023] 152
taxmann.com 82
(Jharkhand)

The petitioner contended Respondents had not issued detailed SCN and only summary was issued in DRC-01 and order issued was also
in DRC-07 without detailed order being issued.
The High Court observed that no SCN in terms of Section 73 (1) of the JGST Act, 2017 was served upon the Petitioner and reliance of the
Respondents on the alleged Summary show cause in Form GST DRC-01, dated 20.12.2018, was also of not much avail. Also, it was
observed that when no detailed adjudication order, as required under Section 73 (9) of JGST Act, 2017, had been passed or issued, the
Petitioner was not liable to pay impugned demand only on the basis of the said Form DRC-07. It was also observed that appellate authority
should have decided the case on merit and should have given its finding on the grounds of Appeal that DRC-07 has been issued without
issuing any no show cause notice in terms of Section 73 (1) of the JGST Act, 2017 and also without any adjudication order

2

Section
29 and
Section
30 and
Section
16

Revocation of
Cancelled
Registration and
Entitlement to Lodge
claim for ITC for the
intervening period

R.k. Jewelers v.
Union of India
[2023] 152
taxmann.com 81
(Rajasthan)

The High Court was of the opinion that petitioner firm is covered within the notification dated 31.03.2023 and can move an application
before the competent authority with a prayer for restoration of its GST registration subject to fulfilment of the conditions mentioned in the
said notification, therefore writ petition was disposed of with liberty to the petitioner-firm to file application for restoration of its GST
registration before the competent authority. It was also made clear that when the competent authority would consider the issue of revocation
of cancellation of petitioner firm GST registration under the notification dated 31.03.2023, the petitioner-firm, shall be entitled to lodge its
claim for availment of Input Tax Credit in respect of the period from the cancellation of the registration till the registration is restored

3

Section
129 and
Section
130

Invoking Provisions
of Section 129 and
then switching to
Section 130 without
providing release of
goods under Section
129.

Sharda Batteries
and Metals v.
Deputy
Commissioner of
State Tax [2023]
152 taxmann.com
80 (Gujarat)

Petitioner contended that exercise of powers under Section 129 and thereafter switching over to Section 130 and passing order thereunder
without availing the petitioner the benefits of release of the goods under Section 129, could be said to be without jurisdiction. It was also
submitted that Special Civil Application No.8353 of 2022 and other matters have been entertained by this court involving the same point
and interim relief of release of the goods and conveyance has also been granted on condition.
The High Court directed by way of interim relief that goods of the petitioner as well as vehicle bearing registration No. TS-12-UC 2787, be
released subject to conditions being fulfilled and petition be listed with Special Civil Application No.8353 of 2022

4

Section
54

Delay in
disbursement of
refund

KA Prevulcanised
Latex (P.) Ltd. v.
Government of
Tamil Nadu [2023]
152 taxmann.com
79 (Madras)

The petitioner had applied for refund and had not received refund of 90% of the CGST and IGST. The first respondent had provisionally
sanctioned the refund vide its provisional refund and Final orders too had been passed.
The High Court observed that the respondent had sanctioned refund both by virtue of the provisional refund orders and the final orders
sanctioning the refund and they had not only failed to respond to the request of the petitioner, but even before the Court, they were not able
to give any reason as to why refund was not made despite orders of the first respondent. These amounts are rightfully due to the petitioner.
Therefore, writ petition was allowed and second respondent was directed to refund the amount due to petitioner.

5

Section
74

Opportunity of being
heard not provided

TK Elevator India
(P.) Ltd. v.
Assistant
Commissioner
(GST) [2023] 152
taxmann.com 78
(Delhi)

Notice dated 05.11.2020, pointing out certain discrepancies, was issued under Section 61 of the CGST Act. The petitioner responded to
the said notice on 05.12.2020, setting out the explanation for the alleged discrepancies. The petitioner also prayed that in case the
proceedings initiated pursuant to the notice dated 05.11.2020 were not dropped, the petitioner might be afforded an opportunity of personal
hearing before the final decision was taken. The petitioner's request for personal hearing was rejected and the impugned order was passed
under Section 74 of the CGST Act.
The High Court observed that a plain reading of the order indicated that there was neither any discussion nor any reference to the notice
dated 05.11.2020 or the petitioner's reply to the said notice. The said order is an unreasoned order. The said order was also vitiated as
having been passed without following the principles of natural justice as no opportunity for hearing was afforded to the petitioner. In view
of the above, the petition was allowed and impugned order dated 21.06.2021 was set aside