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

21.-Daily-Round-up-to-the-Latest-CasesDownload

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-15-Snapshot of Latest GST Cases

-Cancellation of Registration without following principle of Natural Justice
-Writ Petition not maintainable as matter pending before the Proper Officer
-Posting of Order with incorrect and incomplete address is not a valid delivery

15.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Section 

Case Subject

Case

Held

Cases Referred

1

Section
29

Cancellation
of
Registration
without
following
principle of
Natural
Justice

Precitech
Engineers v. State
of U.P.
[2023] 150
taxmann.com 214
(Allahabad)

Writ Petition was allowed considering the fact that the order impugned cancelling the registration was prima facie
without application of mind and the case was thus squarely covered by the judgment in the case of M/s Chandra
Sain (Supra) and the issue of non-fixation of time and date is squarely covered by the judgment rendered in the
case of M/s Jaiprakash Thekedar (Supra), the writ petition deserves to be allowed on both the counts.

Mr. Chandra Sain v. U.O.I. ;
[2022 U.P.T.C. (VOL.112) -
1861].
M/s Jaiprakash
Thekedar v. Commissioner,
Commercial Taxes and
another; [(2023 U.P.T.C.
(VOL.113) - 162]

2

Section
69 and
Section
132

Release on
Bail

Suresh Jajra
v. Union of India
[2023] 150
taxmann.com 213
(Rajasthan)

It was submitted by the petitioner that he is neither owner of Ayodhya Food Products or nor partner of the firm
and the petitioner and other co-accused had retracted the statement given by under Section 70 of GST Act. It
was further submitted that maximum punishment in this case is five years and conclusion of trial may take long
time and that similarly situated co-accused were enlarged on bail by the Court and by Co-ordinate Bench of the
Court.
The High Court considering the contentions put-forth and taking into account the facts and circumstances of the
case and without expressing any opinion on the merits of the case deemed it just and proper to enlarge the
petitioner on bail

-

3

Section
74

Writ Petition
not
maintainable
as matter
pending
before the
assessing
officer

North End Foods
Marketing (P.) Ltd.
v.
State of U.P
[2023] 150
taxmann.com 212
(Allahabad)

The petitioner was directed that all issues raised were still open to be agitated before the Assessing Officer and
therefore the High Court do not find any good ground to entertain the writ petition. The writ petition was disposed
of with the observation that all the issues raised by the petitioner, especially the issue with regard to the
jurisdiction of the Assessing Officer to proceed under Section 74, shall be raised before the Assessing Officer in
reply to the show cause notice, the subject matter of challenge herein

-

4

Section
169

Writ Petition
not
maintainable
as matter
pending
before the
assessing
officer

Global
Construction
v.
Union of India
[2023] 150
taxmann.com 204
(Jharkhand)

The High Court observed that firstly certified copy of impugned order was provided to the appellant on 19th
December 2020 which means that by that time the relaxation of limitation period as per the directions of the Apex
Court in Suo Motu Writ Petition (Civil) No. 03/2020 had commenced due to the COVID lockdown and secondly,
the booking journal or the track consignment report of the speed post does not contain the complete address of
the petitioner.
The High Court observed that it is apparent that notices were issued on incorrect or inadequate address. The
presumption of proof of service of notice is a rebuttable piece of evidence and the track consignment report
having an incomplete address of the petitioner, valid service of notice of the order in original cannot be presumed.
Section 27 of the General Clauses Act as quoted at paragraph-6 of the impugned appellate order also provides
that service shall be deemed to be effected by properly addressing, prepaying and posting it be registered post.
Thus, it was held that petitioners have therefore rightly contended that it could not have approached the appellate
authority earlier and thus the grounds of rejection of the memo of appeal was held to be not tenable on facts.

-

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

12.-Daily-Round-up-to-the-Latest-CasesDownload

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