Part-162-One Pager Snapshot to Cases on Section 9, 54, 73 of CGST Act, 2017

Section 9- Petitioner directed to refund the tax collected from customers since services such as application fee for releasing connection of electricity, rental charges, testing fee, labour charges for shifting meters, etc. are not chargeable to GST as they are bundled supplies and form an integral part of the supplies of distribution of electricity.

Section 73- SCN quashed and matter remanded back to conduct investigation at supplier end as authority failed to conduct investigation when petitioner in their reply to Pre-SCN had requested authority to investigate at the supplier’s end, where there was an allegation of retrospective cancellation of the supplier’s registration.

Section-54-Matter remanded back as order failed to consider the reply submitted by the petitioner on record

Part-160-One Pager Snapshot to Cases on Section 9, 16, 56 and 107 of CGST Act, 2017

-Section 9- It was difficult to accept that petitioner could collect any GST from its consumers after paragraph 4 of the circular No. 34 Dated 01-03-2018 has been set aside but since petitioners Transfer Petition was pending before Hon’ble Supreme Court and tagged with batch of other matters, including the one arising from decision of Gujarat High Court, consideration of the present petition was deferred

-Section 107-Notwithstanding order was passed in the name of Driver but consignor can also file appeal against order U/Sec 129 as person aggrieved by any decision passed may prefer appeal to Appellate Authority U/Sec 107

-Section 56-Interest @ 6% is payable for the period commencing from a date immediately after expiry of sixty days from the date of an application under Section 54(1), however, interest @ 9% payable for period covered under proviso to Section 56, if a person’s claim is a subject matter of further proceedings, which finally culminate in favour of applicant

-Section 16- Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit

Snapshot-38-Snapshot of Latest GST Cases

Supply of goods by shops located at domestic Airport or Domestic Security Hold Area, is taxable
-SCN set aside as the same was devoid of reasons and thus registration restored.
-Refund cannot be withheld merely because the revenue has decided to file an appeal against the order
-Petitioner failed to file appeal within condonable period, demand stayed subject to deposit of tax as Tribunal not constituted
-Market Research Services not covered by Intermediary services

S.No

Section

Case Subject

Case

Held

1

Section 9
of CGST
Act,
Section 5
IGST Act

Supply of goods by
shops located at
domestic Airport or
Domestic Security Hold
Area, is taxable

A1Cuisines (P.) Ltd.
V. Union of India
[2023] 151
taxmann.com 189
(SC)

The Bombay High Court held that supply of goods by shops located at a domestic Airport or Domestic Security Hold Area, which are
before even the immigration clearance by a passenger are taxable since the transaction cannot be said to have taken place in any
area beyond the customs frontiers of India or outside India.
The SLP before the Supreme Court against the said judgement was dismissed.

2

Section
29 and
Section
30

SCN set aside as the
same was devoid of
reasons and thus
registration restored.

Rishiraj Aluminium
(P.) Ltd. v. Goods &
Service Tax Officer
[2023] 151
taxmann.com 163
(Delhi)

The High Court observed that SCN was deficient and it does not sufficiently disclosed reasons why petitioner's GST Registration was
suspended or was proposed to be cancelled. It is well settled that a SCN must clearly set out the reasons for proposing an adverse
action for noticee to respond. The High Court found merit in the petitioner's contention that he was at a loss as to how to respond to
the impugned show cause notice as it did not disclose any intelligible reason for proposing cancellation of the petitioner's registration.
The High Court thus set aside the show cause notice and petitioner's GST Registration was restored.

3

Section
54

Refund cannot be
withheld merely
because the revenue
has decided to file an
appeal against the order

G. S. Industries v.
Commissioner
Central Goods and
Services Tax [2023]
151 taxmann.com
162 (Delhi

The question was whether benefit of Order-in-appeal dated 03.01.2022 can be denied to the petitioner and refund amount be withheld
solely on the ground that the respondent had decided to file an appeal against the said order.
The High Court observed that respondent had not filed any appeal, and there was no order of any Court staying the order. Indisputably,
the order could not be ignored solely because according to the revenue, the said order is erroneous and is required to be set
aside. The High Court thus allowed the petition and directed to forthwith process refund including interest.
Cases Referred- Mr. Brij Mohan Mangla v. Union of India & Ors.: W.P.(C) 14234/2022 dated 23.02.2023

4

Section
107 and
Section
112

Petitioner failed to file
appeal within
condonable period,
demand stayed subject
to deposit of tax as
Tribunal not constituted

Laxman Barik v.
Joint Commissioner
of State Tax (Appeal)
[2023] 151
taxmann.com 161
(Orissa

There was delay in preferring appeal before appellate authority. The revenue contended that, Court may not be able to condone the
delay beyond four months, particularly when appellate authority has not been vested with discretion to condone the delay beyond one
month after lapse of three months from the date of communication of order.
The High Court held that since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate
tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand, the rest of
the demand was stayed during the pendency of the writ petition

5

Section
54 of
CGST
Act, 2017
and
Section
13 of
IGST Act,
2017

Market Research
Services not covered by
Intermediary services

Ohmi Industries Asia
(P.) Ltd v. Assistant
Commissioner,
Central Goods and
Services Tax [2023]
150 taxmann.com
409 (Delhi)

The petitioner provided services to an affiliated entity, OHMI Industries Ltd., Japan and entered into two separate agreements with
OHMI Japan, one for rendering Business Support Services and the other for providing Market Research Services. The petitioner filed
an application seeking refund of integrated tax on zero rated supply. The adjudicating authority rejected the refund application stating
that petitioner was providing support to the customers of OHMI, Japan directly meant that the petitioner was rendering intermediary
services. The High Court stated that the appellate authority failed to notice that the petitioner's appeal was confined only for refund of
integrated tax paid on invoices raised in respect of Market Research Services. The order passed by the adjudicating authority was
premised on the basis that petitioner was rendering services directly to the customers of OHMI, Japan. This was in the context of the
Business Support Services rendered by the petitioner to OHMI, Japan. In the present case, there was no dispute that petitioner had
rendered Market Research Services on its own; there was no allegation that it had arranged supply of services from a third party.
The High Court also referred to Circular dated 20.09.2021 (Circular No.159/15/2021-GST) and held that insofar as providing Market
Research Services is concerned, the petitioner cannot be held to be an intermediary. In view of the above, the petitions were allowed
and the impugned order was set aside. Case Referred- M/s Ernst And Young Limited v. Additional Commissioner, CGST
Appeals-II, Delhi and Anr.; W.P.(C) No.8600/2022 decided on 23.03.2023

Snapshot-25-Snapshot of Latest GST Cases

-Appeal filed beyond Limitation Period
-Liability to get registered wherein Property has been rented through General Power Attorney Holder
-Ex-parte Order being upheld by Appellate Authority
– Release of Conveyance confiscated U/Sec 130

S.No

Section

Case Subject

Case

Held

1

Section
29,
Section
30 and
Section
107

Appeal filed before
Appellate Authority
rejected on account of
limitation period; High
Courts remands back for
fresh consideration as
registration was suomotu cancelled

Narayanpet
Municipality
v. Superintendent
of Central Tax
[2023] 150
taxmann.com 303
(TELANGANA)

In the instant case, appellate authority rejected the appeal as it was filed beyond the period of extended limitation
The High Court observed that though the lower appellate authority may be right in holding that while it may allow filing of an appeal
beyond the limitation of three months for a further period of one month, but the delay beyond the extended period of one month cannot
be condoned, however, such a stand may adversely affect the petitioner. This is more so because registration was suo motu cancelled
on the ground of non-filing of returns and as GST Tribunal has not been constituted under Section 109 of the CGST Act, petitioner
would be left without any remedy. The High Court thus remanded the entire matter back to reconsider the case of the petitioner and
thereafter to pass appropriate order in accordance with law

2

Section 9,
Section
24 and
Section
24

General Power Attorney
Holder is liable to get
registered and pay tax on
rent as they are involved
in the act of leasing of
property and receives
and retains, income from
property, including rent.

Nagabhushana
Narayana [2023]
150 taxmann.com
304 (AAR -
KARNATAKA)

The applicant being a non-resident Indian, residing at California, USA, owned a commercial property in Bengaluru and rented the said
premises from which is in receipt of rental income. The owner i.e. applicant has given General Power of Attorney (“GPA” to his mother
Smt. Prabhavathi quoting that he is working outside India and thus unable to take care of said commercial property owned by him).
The AAR observed reading through the provisions of GPA, that the act of leasing of immoveable property was taken up by the GPA
holder and as per GPA, the incomes from the property, including the rent were received and retained by the GPA holder. Thus, the
GPA holder is the supplier of service of leasing of the building for commercial purposes and thus liable to be registered and required
to pay tax on supply of Renting of Immovable Property service of the commercial building.

3

Section
74

Once the appellate
authority considers the
entire documents on
record in case of an exparte assessment, then
there is no need to
interfere in the order
passed by the appellate
authority

Jalsa Resorts v.
State of U.P. [2023]
150 taxmann.com
306 (Allahabad)

The petitioner's premises were inspected by the Special Investigation Branch on 06.12.2017. On the basis of the report submitted by
the Special Investigation Branch, the notice under Section 74 of UPGST Act, 2017 was issued to petitioner demanding Rs.48,96,000/-
amount of tax penalty and interest. Since petitioner neither replied to the SCN and nor did it produce relevant documents for assessing
the correct tax from July, 2017 to March, 2018, ex-parte order dated 11.11.2021 considering the turnover as one crore was assessed.
The Appellate Authority, from the entries, as found in the diary recovered by the Special Investigation Branch, noticed that the petitioner
had received much more advance i.e. Rs.17,95,000/- than it was shown in the returns i.e. Rs. 3,73,983.05/- however, Appellate
Authority based upon the records reduced amount from Rs 48,96,000 by Rs Rs 38,56,680/-.
The High Court on the appeal of the petitioner held that it does not find any substance in the submission of the learned counsel for
the petitioner that the assessment order is based on presumption. The appellate authority had examined each and every document
submitted by the petitioner as well as the documents recovered by the Special Investigation Branch

4

Section
130

Conveyance to be
release on deposit of Rs
100000 and a bond eqaul
to fine levied in lieu of
conveyance.

Tanmit Singh
V.
State of Gujarat
[2023] 150
taxmann.com 332
(Gujarat)

In the instant case, goods which were confiscated were auctioned and amount was recovered through auction. The petitioner
contended that since the goods been auctioned by authority, in such circumstances of the case, conveyance may be released and
the petitioner is ready and willing to give sufficient amount of bond for the remaining amount of fine in lieu of conveyance. The
respondents counsel submitted that the goods which have been auctioned had not fetched the full amount of tax, fine and penalty and
also submitted that the major chunk of tax, fine and penalty was yet to be recovered.
The High Court held that once the bond is furnished towards fine of Rs.25,86,486/- in lieu of confiscation of conveyance and the
amount of Rs.1,00,000/- is deposited with the respondent authority, the respondent concern may release the conveyance immediately

Snapshot-23-Snapshot of Latest GST Cases

-Extension of the limitation period for filing Appeal beyond the period allowed for condonation of delay
-GST on Mining Royalty
-Principle of Natural Justice not followed before cancellation of registration
-Rule 89(4) is not applicable in case of refund on account of export of services with payment of tax

S.No

Section

Case Subject

Case

Held

1

section
100

Extension of the
limitation period for
filing Appeal before
AAAR beyond the
period allowed for
condonation of
delay in the Statute

Indian Institute of
Corporate Affairs
v. Delhi Appellate
Authority for
Advance Ruling
[2023] 150
taxmann.com 505
(Delhi)

The High Court held that since the appeal was filed before the AAAR on 14.02.2020, which was beyond the period of sixty days from the
date on which the petitioner received the order dated 28.06.2019 or from the date it became aware of the constitution of the Appellate
Authority, the delay was in excess of the period that could be condoned by the appellant. In view of the above, High Court held that they
were unable to find fault with the decision of the Appellate Authority in declining to entertain the petitioner's appeal under Section 100 of
the Act.
Case Referred-State of Goa v. Western Builders: (2006) 6 SCC 239 and Chhattisgarh State Electricity Board v. Central Electricity
Regulatory Commission and Ors.: 2010 (5) SCC 23

2

Section 9

Stay Petition on
GST on Mining
Royalty dismissed

Rajasthan Granite
Mining
Association
v. Union of India
[2023] 150
taxmann.com 501
(Rajasthan)

The High Court observed that the counsel for the petitioner was not in a position to dispute the fact that the issue regarding demand of GST
on royalty paid to the respondent - Mining Department towards mining lease has already been decided by the Court in Sudershan Lal
Gupta's and Shree Basant Bhandar Int Udyog's case. In view of the above, high court dismissed the writ petition in terms of the orders
passed by the Court in Sudershan Lal Gupta's case and Shree Basant Bhandar Int Udyog's case). The stay petition was also dismissed.
Case Referred- Shree Basant Bhandar Int Udyog v. Union of India & Ors. (D.B. Civil Writ Petition No.5678/2022) and Sudershan
Lal Gupta v. Union of India & Ors. (D.B. Civil Writ Petition No.8109/2022

3

Section
29 and
Section
30

Principle of Natural
Justice not followed
before cancellation
of registration

S.P. Metals v.
Assistant
Commissioner of
Commercial Taxes
[2023] 150
taxmann.com 498
(Karnataka)

The petitioner was aggrieved by the first respondent's order dated 30.11.2022. It was contended by the petitioner that when he was still in
custody, department cancelled the GST registration on 30.11.2022 recording that on examination of the petitioner's case against
cancellation they were of the opinion that it should be cancelled. If the petitioner was in custody from 16.11.2022 until 08.12.2022 when he
was admitted to bail and released, the petitioner could not have been served with Show Cause Notice dated 17.11.2022 and he could not
have issued any response, but the GST registration was cancelled based on the said Show Cause Notice holding that petitioner's response
was considered.
The High Court observed that the department has recorded what appears to be a stereotype opinion because in the circumstances of the
case it cannot even be argued that the petitioner could have issued response. Therefore, the Court interfered with the impugned order on
the ground of arbitrariness and allowed petitioner to furnish the returns for the period for which the returns were not filed as a condition for
revocation of the cancellation as against a cancellation by this order without any condition.

4

Section
54

Rule 89(4) is not
applicable in case of
refund on account of
export of services
with payment of tax

OHMI Industries
Asia (P.) Ltd. v.
Assistant
Commissioner,
Central Goods and
Services Tax
[2023] 150
taxmann.com 497
(Delhi

The proper officer had rejected petitioner's claim of refund on account of export of services without payment of tax by referring to Subclause (D) of Rule 89(4) of the Rules on the ground that the turnover reflected for the month of October, 2018 ought to be considered as
the turnover for the month of November, 2018 when the remittances were received. The petitioner appealed against the decision of proper
officer rejecting the refund contending Rule 89(4) of the Rules does not apply. The petitioner submitted that Rule 89(4) of the Rules applied
only for refund in respect to exports made without payment of integrated tax. The petitioner pointed out that it was not seeking refund of
accumulated ITC but integrated tax as paid by him and that there was no dispute that the petitioner had discharged his liability of payment
of integrated tax.
The High Court held that the opening sentence of Rule 89(4) of the Rules makes it amply clear that it applies only in cases of zero rated
supply of goods or services, without payment of tax under bond or letter of undertaking and thus Rule 89(4) of the Rules is inapplicable to
cases of refund of integrated tax paid on zero rated supply