Issue No. Nov/2024/04

RATIO OF LATEST JUDGEMENT

Elsy Joy Vs. The Deputy Commissioner of State (WP(C) No. 35393 of 2024) (Kerala High Court)

In this case, a Show Cause Notice was given to the taxpayer on June 20, 2023, with a deadline of July 21, 2023, to respond. An assessment Order was issued on July 11, 2023, before the deadline had passed. The Hon’ble High Court observed that an assessment order issued before the time to file requisite reply is invalid. Further, it was observed that the premature order violated the Principles of Natural Justice.

Ashish Traders Vs State of U.P. & Another (WRIT TAX No. 1882 of 2024) (Allahabad High Court)

The notices u/s 73 were incorrectly uploaded on the “Additional Notices and Orders” tab of the GST portal, which led to the petitioner being unaware of the notices and unable to respond within the prescribed time. The Hon’ble High Court placed it reliance over its earlier ruling in Ola Fleet Technologies Pvt. Ltd. v. State of U.P. Writ Tax No. 855 of 2024, where the court has remanded back the matter stating that the petitioner was entitled to the benefit of doubt due to improper notice communication. Consequently, the Impugned order was set aside.

M/s Lakhwinder Sigh Stone Crushers Vs. UOI & OR’s. (CWP No. 8637 of 2023) (Himachal Pradesh High Court)

The Hon’ble High Court dismissed the petition challenging the levy of GST on royalties paid by a mineral concession holder. The petitioner, a stone-crushing firm, argued that GST on royalty would amount to a tax on tax, referencing a 2023 Supreme Court ruling in India Cement Ltd. and others Vs. State of Tamil Nadu and others, (1990) 1 Supreme Court Cases 12. However, the Court noted that this decision had been overruled by a nine-judge bench in Mineral Area Development Authority v. Steel Authority of India (2024), which held that royalties are contractual payments, not taxes, and that states have the authority to tax mineral rights. The High Court affirmed that GST could be levied on royalty payments and upheld the legality of the government’s action.

Tikona Infinet Private Limited Vs Union of India & Another (Writ Petition No. 16258 of 2023) Bombay High Court

The Bombay High Court ruled in favor of a Petitioner who manually filed Form GST ITC-02 after the GST portal was non-functional. The Court applied the principle “Lex non cogit ad impossibilia” (the law does not require impossible acts), stating that the Petitioner could not be blamed for not filing electronically due to the portal’s unavailability. The Court found the Show Cause Notice issued for failure to file electronically to be arbitrary, citing similar rulings from other High Courts. It directed the authorities to consider the manually filed form and proceed with any necessary action following Natural Justice Principle.

Ahs Steels Vs Commissioner of State Taxes (Writ Tax No. 1675 of 2024) (Allahabad High Court)

The Court quashed an order passed under Section 73 of the GST Act, where a Show Cause Notice was issued after the petitioner’s GST registration was cancelled in 2019. The Court ruled that once registration is cancelled; taxpayers are not obligated to check the GST portal. The Service of Notice was adjudged to be inaccurate & insufficient when other modes are available to the Authority