Snapshot-36-Snapshot of Latest GST Cases

-Reasonable opportunity of being heard be given and decision to extend time be exercised with sound reasons
-Cononation beyond Limitation Period not allowed
-No Levy of Penalty due to Expiry of way Bill
-Grant of Anticipatory Bail

S.No

Section

Case Subject

Case

Held

1

Section
73 and
section
75

Reasonable
opportunity of
being heard be
given and
decision to
extend time be
exercised with
sound reasons

Exide
Industries Ltd.
v. Deputy
Commissioner
(CT) [2023]
151
taxmann.com
110 (Madras)

The High Court observed that reasonable opportunity ought to be given to a person to show cause and depending upon the facts of each case,
even further extension of time can be granted by the Assessing / Adjudicating Officer. In any event, the decision to refuse or extend time ought to
be exercised with sound reasons and not in an arbitrary or capricious manner.
In view of the above, the court found that impugned orders did not discuss the reasons for extension of time at all, leave alone giving its finding
either granting or refusing the adjournment. In such circumstances, it was clear that there was a clear violation of the Circular No. 12/2022 Dt 26th
September 2022 (TNGST) and therefore it was held that petitioner be afforded a fair opportunity to submit its explanation in respect of three
pending queries within a reasonable time and thereupon, the respondent may pass fresh orders considering the entire explanation submitted by
the petitioner, including the earlier explanations submitted by it., The impugned orders were set aside.

2

Section
107

Condonation
beyond
limitation period
not allowed

[2023] 151
taxmann.com
109 (Patna)
Badri Prasad
Yadav v. State
of Bihar

The remedy of writ is an absolutely discretionary remedy. The High Court, hence, can always refuse the exercise of discretion if there is an
adequate and effective remedy elsewhere. The High Court can exercise the power only if it comes to the conclusion that there has been a breach
of principles of natural justice or due procedure required for the decision has not been adopted. The High Court would also interfere if it comes to
a conclusion that there is infringement of fundamental rights or where there is failure of principles of natural justice or where the orders and
proceeding are wholly without jurisdiction or when the vires of an Act is challenged.
It was further observed that when there is a specific period for delay condonation provided, there cannot be any extension of the said period by
the Appellate Authority or by this Court under Article 226 of the Constitution. The petitioner by his own failure had not availed the appellate remedy
and in that circumstance, there can be no invocation of the extraordinary jurisdiction under Article 226 of the Constitution of India. The High Court
did not find that there was a jurisdictional error, violation of principles of natural justice or abuse of process of Court averred or argued by the
petitioner in the above writ petition. The petitioner sought to challenge the demand on the ground that the ITC claimed by the petitioner was proper;
which was merely determination of the tax payable on the basis of the various claims validly arising from the statute and computation; which cannot
be agitated in a petition under Article 226 of the Constitution of India. The gross delay stands against the petitioner and delay was not condoned.
Cases Referred- State of H.P & Ors. v. Gujarat Ambuja Cement Limited & Anr.; [2005] 6 SCC 499

3

Section
129

No Levy of
Penalty due to
Expiry of way
Bill provided
intent to evade
absent

Ramji Jaiswal
v. State Tax
Officer,
Bureau of
Investigation
[2023] 151
taxmann.com
165 (Calcutta)

n the instant petition, the petitioner challenged the order of adjudicating authority imposing the penalty for transporting the vehicle in question
after expiry of the e-way bill which expired on 2nd August, 21 at 11.59 p.m. and vehicle in question was intercepted at 6.45 p.m. on 3rd August,
2021. There was a time gap between the expiry and interception of the vehicle in question of about 18 hrs., which was less than a day and
petitioners submitted there was no intention of evasion on part of petitioners and there was a genuine problem of break down of vehicle in question.
The High Court decided the matter in favour of the petitioner in view of the facts which appeared from record and considering the orders of the
Calcutta High Court by setting aside the impugned order and as a consequence, petitioners were held to be entitled for refund of the penalty.
Cases Referred- Ashok Kumar Sureka v. Assistant Commissioner, State Tax, Durgapur Range

4

Section
69 and
Section
132

Grant of
Anticipatory Bail

Kishan Murari
Gupta
V State of U.P
[2023] 151
taxmann.com
164
(Allahabad)

In the instant case, it was submitted by the petitioner that since seller firm as per allegation in the FIR had been found bogus, therefore, their firm
being the purchaser firm, proceedings under section 74 of U.P. G.S.T. Act were going on and they have participated in those proceedings and
against the order of the assessing authority, appeal had been filed by depositing 10% of the disputed tax amount. It was submitted that the dispute
was purely civil in nature. The petitioner had no criminal antecedent.
The High Court observed that considering the above aspects of the matter, perusal of the record, the fact that proceedings under section 74 of the
U.P. G.S.T. Act were going on, as also the judgment in Sushila Aggarwal and others versus State (NCT of Delhi) and another (2020)5 SCC 1 and
without entering into the merit of the case, it would be appropriate to grant protection to the applicants under Section 438 Cr.P.C

Snapshot-28-Snapshot of Latest GST Cases

-SCN being invalid if it does not provide date, time and venue for personal hearing
-Refund of IGST paid on Ocean Freight
-Consignor/Consignee entitled to appeal even though Order passed in the name of driver
-Grant of Bail

S.No

Section

Case Subject

Case

Held

1

Section
74

SCN requiring the assessee
to appear for personal
hearing on the “date, time
and venue, if mentioned in
table below", but no date,
time and venue for personal
hearing shown in the notice

Concord Tieup
(P.) Ltd. v. State
of Madhya
Pradesh [2023]
151
taxmann.com 41
(Madhya
Pradesh)

The petitioner contended that SCN under Section 74 was issued making mention about personal hearing to the effect that "you
may appear before the undersigned for personal hearing either in person or through authorized representative for representing
your case on the date, time and venue, if mentioned in table below", but no date, time and venue for personal hearing was shown
in the notice.
The High Court held that in the table given, captioned as "Details of personal hearing etc.", no Date, Time and Venue of personal
hearing was shown and in front of columns 3,4&5 of Date, Time and Venue, NA was mentioned, which was sufficient to infer that
no personal hearing was given to the petitioner before passing the impugned order dated 24.08.2022. The High Court further
observed that it is well settled that when due opportunity of hearing, as required under the law, has not been afforded and principle
of natural justice has not been followed, then the question of availability of alternative remedy does not come in the way for
exercising jurisdiction under Article 226 of the Constitution of India. The impugned order was held to be not sustainable and was
quashed and remitted back.
Case Referred- Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax, 2022 (59) G.S.T.L. 394 (All.)

2

Section 5
of IGST
Act, 2017

Refund of IGST paid on
Ocean Freight

Krishak Bharati
Co-operative Ltd.
v. Union of India
[2023] 151
taxmann.com 42
(Gujarat)

The High Court held that since Entry No.10 of Notification No.10/2017- IGST (Rate) dated 28.6.2017 has already been declared
ultravires by Hon’ble Apex Court, therefore amount of Rs. 6,98,00,420/- paid by the petitioner as IGST on ocean freight of goods
imported during July, 2017 to December, 2019 be refunded alongwith the statutory rate of interest.
Case Referred- ADI Enterprises v. UOI being Misc. Civil Application No. 1 of 2020 in Special Civil Application No. 10479
of 2019

3

Section
129 and
Section
130

Order being passed in the
name of driver does not
preclude cosignor or the
consignee to challenge the
confiscation of goods along
with supporting documents
evidencing their ownership

Delhivery
Limited
v. State of U.P.
[2023] 151
taxmann.com 43
(Allahabad)

It was contended by the petitioner that since the impugned order was passed against the driver, it would not be open for the
cosignor or the consignee to challenge such order before the appropriate forum. It is otherwise not disputed that the impugned
order is appealable under the statute.
The High Court observed that the cosignor or the consignee were always at liberty to challenge the confiscation of goods along
with the supporting documents evidencing their ownership and merely because the order had been addressed to the driver of the
vehicle would not be to the prejudice of the rights and contentions of the cosigner or the consignee and thus court was not inclined
to entertain the challenge to the order impugned directly in the writ petition.

4

Section
69 and
Section
132

Grant of Bail on deposit of
amount and execution of
personal bond

[2023] 151
taxmann.com 44
(Rajasthan)
Gaurav Kakkar
v. Directorate
General of Gst
Intelligence,
Jaipur Zonal Unit

The High Court observed that petitioner was arrested on 04.11.2022 and since then, he was in judicial custody. The challan of the
case had already been presented and no investigation was pending.
Taking into consideration the investigation and evidence so collected, in the opinion of the High Court, the trial would take
considerable time and it may happen, if denied bail, the judicial custody be prolonged beyond the statutory period of punishment
which was for five years. The High Court granted bail to the accused petitioner under Section 439 Cr.P.C with a condition to deposit
Rs. 3 crores by the petitioner before the respondent Department under protest and execution of a personal bond in a sum of
Rs.2,00,000/- with two sureties of Rs.1,00,000/- each to the satisfaction of learned trial court.
Case Referred- Vinay Kant Ameta v. UOI (Criminal Appeal No. 60/2022) decided on 10.01.2022 (SC

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

Snapshot-12-Snapshot of Latest GST Cases

-Determination of tax under Section 130
-Levy of Penalty only on the allegations that excess goods were found
-Service of Notice on Accountant
-Valuation of Goods by Eye Estimation or production capacity or consumption of electricity

S.No

Section

Case Subject

Case

Held

Cases Referred

1

Siemens India vs. State of
Maharashtra 2007 (207) ELT 168
(SC

Grant of Pre-arrest
bail

Kapil Dev Singhal
v. State of Assam
[2023] 150
taxmann.com 156
(Gauhati)

The High Court observed that sufficient incriminating materials has already been collected by
the I.O. against the petitioner and the investigation is still in progress. However, it was also
observed that the accused/petitioner appeared before the I.O. on 3-4 occasions and cooperated in the investigation of this case and he also produced the documents which was
asked to produce before the I.O. The entire case is mainly based on documentary evidence.
Thus, considering all these aspects of the case, the high court found it a fit case to extend the
privilege of pre-arrest bail to the petitioner

2

Section 73,
Section 74,
Section 130

-Assessment/
Determination of tax
under Section 130
-Levy of Penalty only
on the allegations the
excess goods were
found at the premises
-Service of Notice on
Accountant
-Valuation of Goods
by Eye Estimation or
production capacity or
consumption of
electricity.

Maa Mahamaya Alloys
(P.) Ltd. v. State of U.P
[2023] 150
taxmann.com 158
(Allahabad

In the course of proceedings under Section 67, quantification was done by eye estimation and
goods were held to be in excess of recorded goods. It was contended by petitioner that while
proceeding to pass an order under Section 130 of the GST Act, no power is vested in the
authority to undertake determination of liability of tax, which can only be done by taking
recourse to Section 73 or Section 74 of the Act, as the case may be.
-Relying upon the decision in the matter of M/s Metenere Limited vs Union of India and
another; Writ Tax No.360 of 2020 wherein it was held that demand for tax can be quantified
and raised only in the manner prescribed in Section 73 or Section 74 of the Act, as the case
may be, the High Court observed that entire exercise resorted to under Section 130 of GST
Act for assessment/ determination of the tax and penalty is neither stipulated under the Act,
nor can be done in the manner in which it has been done, more so, in view of the fact that
department itself has undertaken the exercise of quantifying the tax due, by taking recourse
under Section 74.
-Scope of proceedings under Section 130(1)(ii) for not accounting for any goods on which
taxpayer is liable to pay tax is only available when an assessee who is liable to pay tax but
does not account for such goods, after the time of supply has occasioned.
-Scope of Proceedings under Section 130(1)(iv) for contravention of any of the provisions of
the Act or the rules made thereunder with intent to evade payment of tax is only available when
the department establishes that there were a contravention of the Act and Rules coupled with
the ‘intent to make payment of tax’.
-Service of Notice on the Accountant of the firm is neither contemplated nor provided for under
Section 169(1)(a) and thus, service cannot be held to be a valid service and entire proceedings
are liable to be quashed.
-There is no prescriptions for valuation of goods on the basis of eye estimation under Section
15 of CGST Act, 2017 as has been done by department or the manner in which has been
carried out by appellate authority, thus the impugned order was held to be not sustainable.

M/s Metenere Limited vs
Union of India and another;
Writ Tax No.360 of 2020

Snapshot-8-One Pager Snapshot of Round up of Latest GST Cases..

-Constitutional Validity of Anti Profiteering Provisions
-Attachment of Bank Account U/Sec 83
– Condition directing appellant to deposit a sum of Rs.2 crores for grant of bail was not sustainable

S.No

Section

Case Subject

Case

Held

Cases Referred

1

Section 171

Constitutional Validity
of Anti Profiteering
Provisions Challenged

Siddha Real Estate
Development (P.) Ltd. v.
National Anti-Profiteering
Authority [2023] 150
taxmann.com 48 (Calcutta)

-The High Court was of the view that there could not be any urgency for granting any
interim order since the petitioner was sitting over the aforesaid impugned adjudication
order for the last six months.
-It is a well established principle of law that every piece of legislation should be treated
as a valid piece of legislation till the same is declared unconstitutional by any court of law
and every action taken under such law should be deemed to be valid by an authority so
long it is not declared unconstitutional. Since the constitutional validity of Section 171 of
CGST Act has been challenged, writ petition being WPA 7189 of 2023 was entertained
however, the court was not inclined to grant any interim order of stay of the aforesaid
impugned adjudication order dated 30th September, 2022 in view of the facts and
circumstances of this case as appears from record and by considering the submission of
the parties

-

2

Section 83

Attachment of Bank
Account of other
persons not being
taxable person or
covered under Section
122(1A) of CGST Act,
2017

Sakshi Bahl v. Principal
Additional Director
General [2023] 150
taxmann.com 47 (Delhi)

It is not open for the respondent to attach the bank accounts of other persons on a mere
assumption that the funds therein are owned by any taxable person and the fact is that
the petitioners are not taxable persons. The power under Section 83 of the Act, to
provisionally attach assets or bank accounts is limited to attaching the bank accounts and
assets of taxable persons and persons specified under Section 122(1A) of the Act. In
view of the above, the impugned order was not sustained.

-

3

Section 69
and Section
132

Condition directing the
appellant to deposit a
sum of Rs.2 crores for
grant of bail was not
liable to be sustained

Anatbhai Ashokbhai
Shah v. State of Gujarat
[2023] 150 taxmann.com
46 (SC

The Apex Court observed that since the facts are almost identical to the case referred,
there was no reason to deviate from the view taken in the said case vide judgment and
order dated 20.01.2023. Following the reasons given in the said judgment and order, it
was held that the condition directing the appellant to deposit a sum of Rs.2 crores was
not liable to be sustained and was hereby set aside. The rest of the conditions in the
impugned order were sustained. The appeal accordingly, was allowed to that extent

Subhash
Chouhan v. UOI [2023]
147 taxmann.com 211
(SC