Part-152-One Pager Snapshot to Cases on Section 65, 73, 122, 126, 129 and 130 of CGST Act, 2017

-Order quashed as except referring to the objections made by the petitioner, various contentions urged by the petitioner were never considered or appreciated prior to passing the impugned orders

-Corrigendum which was only issued to correct quantification and not the grounds in duly approved ADT-02 by Monitoring committee, does not require further specific approval of Monitoring Committee.

-Every detention may not invariably be proceeded under section 129 and in cases wherein non-compliance neither attracts payment of tax and nor there is intent to evade tax, Section 122 would be applicable in such cases

Part-70-One Pager Snapshot to the Latest Cases

-Personal hearing to be afforded , even if petitioner may have signified ‘No’ in the column to avail personal hearing
-Service of Order on the counsel of the petitioner is valid and limitation to file appeal commences from that day
-Audit U/Sec 65 cannot be conducted for a dealer subsequent to cancellation of registration
-Appellate Authority even while considering appeal ex parte will have to consider the grounds raised in the memorandum of appeal
-In case of shortage of goods found in checking during movement, penalty to be levied on the shortage found and not on entire consignment

S.No

Section

Case Subject

Case

Held

1

Section
75(4)

Personal hearing to
be afforded , even if
petitioner may have
signified 'No' in the
column to avail
personal hearing

B.L. Pahariya
Medical Store v.
State of U.P [2023]
153 taxmann.com
659 (Allahabad) 22-
08-23

High Court observed that once it has been laid down by way of a principle of law that a person/assessee is not required to request for
"opportunity of personal hearing" and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an
adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail
personal hearing, would bear no legal consequence. It was further observed that even otherwise in the context of an assessment
order creating heavy civil liability, observing such minimal opportunity of hearing is a must.
Cases Referred- Bharat Mint & Allied Chemicals v. Commissioner Commercial Tax [2022] 136 taxmann.com 275

2

Section 107

Service of Order on
the counsel of the
petitioner is valid
and limitation to file
appeal commences
from that day

Manoj Steel
Traders v. State of
U.P. [2023] 153
taxmann.com 658
(Allahabad) 23-08-
23

From the perusal of provisions of Section 169, it is evident that order communicated on an Advocate will be deemed service upon
petitioner. As per facts of the case, order was duly communicated to the Advocate of petitioner. Petitioner argued that on 26-6-2019, an
application was moved for getting the certified copy of the order through another counsel and on that very day, the appeal was preferred.
However, on the pointed query as to how and under what mode the petitioner came to know about the passing the order dated
28-3-2018 on 26-6-2019 and as to why the application was moved on 26-6-2019 by another counsel, when the order dated 28-3-
2018 was already communicated to the petitioner's Advocate, petitioner could not reply the same and submitted that the appeal
filed below is silent on this point. The fact that it was not disputed at any stage and the only ground taken was that Shri Anil Jain,
Advocate has not informed the petitioner about the order dated 28-3-2018, it was held that the impugned order cannot be interfered with

3

Section 65

Audit U/Sec 65
cannot be
conducted for a
dealer subsequent
to cancellation of
registration

Tvl. Raja Stores v.
Assistant
Commissioner (ST
[2023] 153
taxmann.com 657
(Madras) 11-08-23

The contention of the petitioner was under Section 65, respondents were empowered to conduct audit if the concern was a registered
unit. As on the date, the petitioner's registration was cancelled, and he was an unregistered concern. But the contention of the respondent
was that the audit was being conducted for a period from 2017-2018, 2021-2022. Therefore, the respondent claimed that for the said
period, the petitioner was a registered firm and for the said period, the respondent was empowered to conduct audit.
The High Court observed that Section 65 specifically states that the audit can be conducted for 'any registered person', then it
ought to be construed as existence concern and the unregistered person would be exempted from the purview of the said
section. When the Section provides for periodical audit, the respondent having failed to conduct audit for all these years, suddenly they
cannot wake up and conduct an audit. Therefore, impugned order was quashed with liberty to the respondent to initiate assessment
proceedings under Sections 73 and 74 of the Act.

4

Section 107

Appellate Authority
even while
considering appeal
ex parte will have to
consider the
grounds raised in
the memorandum
of appea

Ganesh Kumar v.
State of Bihar
[2023] 153
taxmann.com 654
(Patna) 11-07-23

Appeal was dismissed that despite opportunity being granted to appellant to produce documents in his support, he did not produce them.
High Court observed that Appellate Authority has a duty and an obligation under the statute to look into the merits of the matter and
also examine the grounds raised by the appellant and decide the issue on merits. The Appellate Authority even while considering the
appeal ex parte will have to consider the grounds raised in the memorandum of appeal, deciding the appeal on merits, failing which it
would be abdicating its powers especially looking at the provisions where the Appellate Authority has been empowered to conduct such
further enquiry as found necessary to decide the appeal, which decision also shall be on the points raised. Therefore, in view of the
above, since the appeal was decided ex-parte, therefore the appellate order was set aside.
Cases Referred- Purushottam Stores vs. The State of Bihar & Ors; CWJC No. 4349 of 2023 decided on 25.04.2023

5

Section 129

In case of shortage
of goods found in
checking during
movement, penalty
to be levied on the
shortage found and
not on entire
consignment

Usha Gupta v.
Assistant
Commissioner of
Revenue, Bureau
of Investigation
[2023] 153
taxmann.com 653
(Calcutta) 30-03-23

In the export invoice, buyer's license number was shown as buyer's order number. The High Court held that this cannot be treated as
a discrepancy because in the purchase order of the buyer the sales order number has been correctly shown as SG/2022-23/004.
Therefore, authorities could not have imposed 200% penalty on the entire consignment.
For the issue regarding shortage of quantity of goods observed in checking of goods during movement and levy of penalty on entire
consignment appeal and writ petition was disposed by setting aside the order passed by the appellate authority for levying
penalty on the entire consignment and the matter was remanded back to the appellate authority to recalculate to take note of
the order and recalculate the penalty in respect of shortage in quantity and over than quantity penalty shall be levied at 200%

Snapshot-21-Snapshot of Latest GST Cases

-Decision of Appellate Authority on issues neither part of SCN and nor part of Order
-Diesel Reimbursement to form part of Vehicle Hire Charges
-Grant of Bail
-Rectification of Audit Report

S.No

Section

Case Subject

Case

Held

1

Section
29

Decision of
Appellate Authority
on issues neither
part of Show Cause
Notice and nor part
of Order

Ajay Building
Material v. State
of U.P.
[2023] 151
taxmann.com 6
(Allahabad)

The High Court held that the order dated 01.12.2020 fell short of the requirement of Article 14 of the Constitution of India and the appellate
order dated 30.12.2021 clearly exceeds the power conferred upon the appellate authority as it decides the appeal on the issues which were
neither a part of the show-cause notice nor was a consideration when the order dated 01.12.2020 was passed.
Cases Referred- M/s Chandra Sain, v. U.O.I & Ors. (Writ Tax No.147 of 2022) decided on 22.09.2022 as well as M/S Precitech
Engineeers v. State of U.P. & Ors. (Writ Tax No.1583 of 2022) decided on 14.03.2023

2

9966

Diesel
Reimbursement to
form part of Vehicle
Hire Charges

Uttarakhand
Public Financial
Strengthening
Project [2023]
151
taxmann.com 5
(AARUTTARAKHAND)

The Authority held that without fuel the motor vehicle does not operate (run) and without running i.e. moving from one place to another, the
act of motor vehicle hire services does not happen. The motor vehicle hire services have the integral component of running/ operating the
vehicle to one place to another for transportation. Therefore, to claim to provide the said services, actual transportation has to take place
and without fuel this cannot happen. The contract entered between the applicant and the provider of services is for motor vehicle hire
services, wherein the liability to arrange fuel and the maintenance of the vehicle, so deployed lies with the service provider and is a
comprehensive contract with the consideration which varies depending upon the kilometer travelled. Therefore, reimbursement of expenses
for providing said services, under any head is nothing but the additional consideration for the provision of said services and attracts GST on
the total value.
Cases Referred- M/s. Goodwill Auto’s, Hubbali; Dharwad (Karnataka AAR), M/s Vinayak Air Products Pvt. Ltd (Uttarakhand AAR),
M/s Gurjinder Singh Sandhu (Uttarakhan AAR), M/s Tara Genset Engineers (Uttarakhand AAR)

3

Section
69 and
Section
132

Bail granted as
petitioner had faced
incarceration for
more than 1½ years,
complaint still at
summon stage,
other accused
extended benefit of
bail

Kawaljot Singh
v.
Superintendent
Preventive,
CGST
[2023] 151
taxmann.com 4
(Punjab &
Haryana)

The High Court observed that the quantum of amount which the petitioner was involved was yet to be decided at the time of trial. The
petitioner had already faced incarceration for more than 1½ years. The complaint is still at the summoning stage. The other two accused
had already been extended the benefit of default bail and one more co-accused was granted regular bail by the Court who is stated to be
at parity with the present petitioner.
Thus, the High Court considering the aforesaid facts and circumstances and also considering the total custody of the petitioner which was
more than 1½ years, this Court deems it fit and proper to grant regular bail to the petitioner

4

Section
65,
Section
73/74
and
Section
161

Rectification of
Audit Report

Singh Caterers
and Vendors v.
Union of India
[2023] 151
taxmann.com 3
(Patna)

The petitioner was aggrieved with the audit report issued under section 65(6) and the non-consideration of the rectification application, the
petitioner made under Section 161 of the Act.
The High Court observed that re-examination of the Audit Report by application under section 161 is not a permissible exercise. The
Assessing Officer had rightly found that there was no error apparent on the face of the record, which could be rectified under section 161
and that in any event, section 73 proceedings had been initiated based on the final audit report. The Assessing Officer has also noted that
submission if any made by the tax payer would be taken on record. The Proper Officer has looked at the audit report and has recorded his
satisfaction in the show-cause notice on items raised in the audit report and which enables assessee to raise objections against the same.
Therefore, the High Court was of the opinion that there was no reason why writ petition should be entertained when the rectification
application, on which basis the proceedings under section 73 is sought to be kept in abeyance. If the Assessing Officer has not completed
the proceedings, the petitioner would be entitled to file his objections and seek for consideration of the same before the Assessing Officer