RATIO OF LATEST JUDGEMENTS ON GST
SRC Projects Private Limited Vs The Assistant Commissioner of GST and Central Excise (W.P.No.21008 of 2022) (Madras High Court)
The Madras High Court has instructed authorities to grant the petitioner recredit of the amount paid under reverse charge on 30.12.2017 as Input Tax Credit in their Electronic Credit Ledger. The petitioner paid Service Tax for 2016-17, which was not eligible for Cenvat Credit due to the GST introduction, leading to a rejected refund claim. The bench quashed the rejection and directed authorities to allow the re-credit.
China Development Bank Vs Doha Bank Q.P.S.C. & Ors (Civil Appeal No. 7298 Of 2022) (Supreme Court of India)
The Supreme Court has ruled that a ‘Mortgagor’ can be treated as a ‘Guarantor’. The bench noted that if the sale of hypothecated assets leaves a shortfall in the Corporate Debtor’s liabilities, the Corporate Debtor, though not the borrower, is responsible for covering the deficiency. This commitment to settle third-party liabilities in case of default constitutes a guarantee under Section 126 of the Contract Act.
Note: While no GST applies to mortgages, GST on corporate guarantees is 18%. The Supreme Court’s ruling, which classifies the transaction as both a mortgage and a guarantee, raises questions about the GST implications, particularly for corporate guarantee arrangements which can also fall under the ambit of mortgage.
Bonanza Enterprises v. The Assistant Commissioner of Customs & Anr (W.P.(C) 7510/2024) (Delhi High Court)
The Hon’ble High Court have observed that in addition to traditional methods like speed post or courier, notices must also be sent via email to the petitioner or an authorized representative as Section 153 of the Customs Act allows for email communication. It was further observed that this oversight caused unnecessary delays and ex-parte proceedings and ordered the Customs Department to serve the Petitioner with a fresh Show Cause Notice via email granting petitioner a chance to respond to the Show Cause Notice and attend a hearing.
G.S Industries vs. Commissioner of Central Tax and GST, Delhi (West) (W.P.(C) 13149/2024) (Delhi High Court)
The Hon’ble High Court ruled that under Section 107(2) of the Central Goods and Services Tax Act 2017, the Commissioner cannot review or overturn an order issued by the Appellate Authority. In this case, the applicant’s refund, initially sanctioned by the Appellate Authority, was later set aside by the Commissioner. The Court emphasized that Section 107(2) allows the Commissioner to review only the records of the adjudicating authority, not the Appellate Authority’s decisions. The Court quashed the order setting aside the refund sanction, ruling in Favor of the applicant.
Shish Jewels Private Limited Vs The Intelligence Officer (WP(C) NO. 40450 OF 2023) Kerala High Court
In present facts of the case, the Hon’ble High Court has permitted the provisional release of goods seized under Section 130 of the GST Act, pending adjudication, upon payment of fine. It was observed that the legislature’s intent is not to keep goods idle during the lengthy adjudication process but to ensure the value of confiscated goods is secured. Under Section 130(2), when goods are subject to confiscation, the officer may allow the owner to pay a fine instead. The Court ruled that releasing goods pending adjudication causes no prejudice to the department, as revenue is protected through the fine payment. Comment: The observation by the Court would create a balance between the interest of revenue as well as the Assesse.
Tirth Agro Technology Pvt. Ltd. & Anr. Versus Union of India & Ors. (R/Special Civil Application No. 11630 of 2023) (Gujarat High Court)
The Hon’ble High Court has ruled that Notification No. 14/2022, which amends the formula for calculating eligible refunds under Rule 89(5) (inverted rate refunds), will apply retrospectively as the said Notification is clarificatory and curative in nature. The Hon’ble High Court granted relief to the petitioner after placing its reliance over the Judgment of Ascent Meditech Ltd. Vs. Union of India, Special Civil Application No.18317 of 2023. Consequently, the Court directed the authorities to release the incremental refunds within three months.
Comment: The said ruling of Hon’ble Gujarat High Court once again has substantiated the principle of retrospective application of the Clarificatory & Curative Notification.
Delphi World Money Ltd. Vs The Union of India (Writ Petition (L) No. 28914 Of 2024) (Bombay High Court)
In present facts of the case, two issues were pending for consideration before the Hon’ble High Court. On the first issue, the Hon’ble High Court have considered screenshots of the Electronic Credit Ledger, and the Electronic Cash Ledger of the Petitioner downloaded from the GSTN portal and held them as valid proof of pre-deposit. On the second issue, the Hon’ble High Court observed that to verify the genuinely of authorized signatory, GST Portal should be considered rather than requiring the Board Resolution. Comment: The Hon’ble High Court have granted relief from hyper-technical grounds of rejection of appeal to the Assessee.
Gujarat Chamber of Commerce and Industry & Ors. Vs Union of India & Ors (R/Special Civil Application No. 11345 of 2023) (Gujarat High Court) – A detailed Article on the outcome of this very important judgement shall be circulated very soon.
The Hon’ble High Court in their 280-page detailed judgement has ruled that the sale or transfer of leasehold rights on land allotted by the Gujarat Industrial Development Corporation (GIDC) is not subject to Goods and Services Tax (GST). The case revolved around the subsequent transfer of leasehold rights of land allotted by GIDC to a third party, which is leased to an industrial entity for a long term of 99 years.
The Court observed that the transfer of leasehold rights is a transfer of interest in immovable property, not a service, and thus does not fall under the scope of GST. Specifically, the provisions in Section 7(1)(a) of the GST Act along with Clause 5(a)&(b) of Schedule II were decided inapplicable to such transactions. As
a result, the court ruled that GST cannot be levied on the assignment of leasehold rights in GIDC land, and there is no requirement to consider input tax credits for such transactions.
Shapoorji Pallonji and Company Private Limited Vs Union of India and Others (Writ Petition No: 17717/2021) (Andhra Pradesh High Court)
In present facts of the case, the Hon’ble High Court while remanding the matter observed that the principle of unjust enrichment does not apply to the refund of amounts lying in the ‘Electronic Cash Ledger’ under the GST Laws. Further, the Court substantiated the submissions of Petitioner wherein reliance was placed upon Circular No.166/22/2021-GST as per which refund of TDS/TCS amounts deposited in the electronic cash ledger is permissible, in accordance with the proviso to S. 54(1) r/w S. 49(6) of CGST Act.
Comment: The Andhra Pradesh High Court once again substantiated that the Department shall not deviate from its own circulars while providing any benefits to the Assesse
Enabling Application for Rectification under Not. 22/2024-CT, Dated 08/10/2024
As per the previous issued Notification No. 22/2024-CT on 08.10.2024, any registered person who has received an order confirming demand due to incorrect availment of Input Tax Credit (ITC) under sub-section (4) of section 16 of the CGST Act, and where such ITC is now available under the newly introduced sub-sections (5) and/or (6) of section 16, to file an application for rectification of such demand orders.
A functionality has been made available on the GST portal to facilitate the filing of rectification applications for orders issued under sections 73/74. Taxpayers can now file their application by logging in and navigating to Services > User Services > My Applications, selecting “Application for rectification of order” under Application Type, and clicking the NEW APPLICATION button. A hyperlink is also provided on the portal to download the required proforma in Annexure A (in Word format), which needs to be uploaded after entering the relevant details of the wrongly availed ITC demand order. The application must reference the contravention of sub-section (4) of section 16 of the CGST Act, which is now eligible for rectification under sub-sections (5) and/or (6).
Implementation of mandatory mentioning of HSN codes in GSTR-1 & GSTR 1A
After successful implementation of Phase-I & Phase-II now Phase-III regarding Table 12 of GSTR-1 & 1A is being implemented, from return period January 2025. In this phase manual entry of HSN has been replaced by choosing correct HSN from given Drop down. Also, Table-12 has been bifurcated into two tabs namely B2B and B2C, to report these supplies separately. Further, validation regarding values of the supplies and tax amounts involved in the same, have also been introduced for both the tabs of Table-12. However, in initial period these validations have been kept in warning mode only, which means failing the validation will not be a blocker for filling of GSTR-1& 1A.
Advisory on Extension of Due Date w.r.t GSTR 1 and GSTR 3B Due Date for filling of GSTR-1 and GSTR-3B have been extended by two days. For details refer to Notification No. 01/2025 – (CT) dt. 10th January, 2025 and Notification No. 02/2025 – (CT) dt. 10th January, 2025 issued by CBIC.
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LEGAL MAXIMS
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DUE DATES – GST COMPLIANCES IN JANUARY 2025 | |||
Monthly | Quarterly | Other Due Dates | |
GSTR-3B (Dec 2024) 22nd Jan 2025 | GSTR-3B (Oct-Dec 2024) 24th / 26th Jan, 2025 | GSTR-5 (Dec 2024) 15th Jan, 2025 | GSTR-5A (Dec 2024) Jan 20th, 2025 |
GSTR-1 (Dec 2024) 13th Jan 2025 | GSTR-1 (Oct-Dec 2024) 13th Jan 2025 | GSTR-6 (Dec 2024) 15th Jan 2025 | GSTR-7 (Dec, 2024) 12th Jan 2025 |
IFF(Optional) (Dec 2024) NA | CMP-08 (Oct-Dec 2024) 18th Jan 2025 | GSTR-8 (Dec 2024) 12th Jan 2025 | RFD-10 2 years from the last day of the quarter in which supply was received |
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