RATIO OF THE LATEST JUDGEMENT
Ford India Private Limited Vs Office of the Joint Commissioner (ST) & Another (W.P.No.35448 of 2023) (Madras High Court)
The main issue in this case was that whether the petitioners are entitled to pay 10% of the disputed amount as a pre-condition in filing appeal by way of debiting the amount available in the Electronic Credit Ledger. The Hon’ble High Court observed that the word used in the Section 49(4) is ‘may’ and it is not ‘shall’. Since the word ‘shall’ is not used so there is no mandatory restriction in use of available balance in the Electronic Credit Ledger only for the purpose of payment of output tax. The Hon’ble Court also taken this view based on CBIC Circular No.172/04/2022-GST dated 06.07.2022 which allows that input tax credit can be utilized not only for payment of the self-assessed output tax but can also be utilized for the amount payable because of the proceeding instituted under the provisions of GST Laws. Therefore, it was held that the pre-deposit in the appeal can be made through Electronic Credit Ledger.
Ms Shubhangi Gupta Vs Commissioner of Customs & Ors. (W.P.(C) 10772/2024) (Delhi High Court)
The petitioner sought the release of a detained Patek Philippe watch, seized by Customs at Indira Gandhi Airport on 02.01.2024. The Court found that no Show Cause Notice was issued within the required time under Section 124 of the Customs Act, and no seizure memo was prepared. Despite the Revenue’s claim that the petitioner waived the notice, there was no evidence of any oral or written communication regarding the notice. The Court held that the failure to issue the notice as mandated by law, required the immediate return of the detained watch. The petitioner was directed to apply for re-export if she wished to take the item out of the country.
Ram Krishna Gupta Vs State of U.P. & 2 Others (Writ Tax no. 728 of 2023) (Allahabad High Court)
The Hon’ble High Court has observed that the goods in question were duly accompanied with all required documents such as tax invoice, e-way bill and R.R. There was no finding that there was any discrepancy in quantity and quality of the goods. Further, no material was brought on record to show that there was any evidence regarding evasion of tax. Further, only on the allegation that Part-B of the e-way bill was not filled, no adverse inference can be drawn about evasion of tax. Therefore, it was held that the impugned orders cannot sustain in the eyes of law and the same were set aside.
A.V. Pharma Vs State of U.P. & 2 others (Writ Tax No. – 264 of 2024) (Allahabad High Court)
The Hon’ble Court has observed that the impugned order for the FY 2017-18 under Section 73 (9) and (10) of the CGST Act, 2017 was passed in accordance with the notification dated 24.04.2023 by which the time limit of three years mentioned in Sub Section (10) of Section 73 was extended for the financial year 2017-18 upto 31.12.2023. However, the Hon’ble Court noted that the Respondent has omitted to observe a vital aspect that Notification dated 24.04.2023 has been given retrospective effect only from 31.03.2023 and not prior to it. Therefore, the Hon’ble Court has quashed the impugned orders which were passed prior to 31/03/2023 i.e. before the retrospective effectivity of the notification has been provided and thus held to be passed beyond jurisdiction being barred by the time provided in the said provision, and consequently allowed the writ petition.
Hallmark Vs Jammu and Kashmir GST Department & Another (WP(C) No.2025/2020) (Jammu & Kashmir High Court)
The Hon’ble High Court observed that in the deficiency memo against the original refund application, the Respondent did not take the ground of limitation which leads to the conclusion that the original refund application of petitioner concern was within time from the relevant date. However, the subsequent refund application, which was filed on the asking of respondent, was rejected only on the ground of limitation has been held as arbitrary.
The Court noted that once the respondents had treated the original refund application as within time from the relevant date, then the second refund application, which was in continuation to the original application cannot be barred by limitation.
Therefore, it is held that the time limit for refund of GST will be determined from the date of the original application and not from the date of follow-up application.
CIRCULARS ISSUED BY CBIC
The recent amendments to Circular No. 31/05/2018-GST, brought by Notification No. 02/2022-Central Tax (dated 11th March 2022) and Notification No. 27/2024-Central Tax (dated 25th November 2024), introduce significant changes to the adjudication process for Show Cause Notices issued by the Directorate General of Goods and Services Tax Intelligence (DGGI). These Notifications empower Additional Commissioners and Joint Commissioners of Central Tax in specified Commissionerates with All India Jurisdiction to adjudicate these show cause notices, providing a more centralized approach.
Under the new framework, Additional/Joint Commissioners with All India Jurisdiction will handle adjudication of DGGI cases involving multiple Noticees, regardless of the amount involved. This includes cases where a Show Cause Notice is issued to multiple Noticees with the same or different PANs, or where multiple notices are issued on the same issue to Noticees with the same PAN, but their principal places of business fall under different Central Tax Commissionerates. The Adjudicating Authority will be assigned based on the location of the principal place of business of the Noticee with the highest tax demand, and the adjudication can be handled by any empowered Additional/Joint Commissioner from the specified Commissionerates, as per the revised notifications.
Moreover, for Show Cause Notices issued before 1st December 2024, but not adjudicated by 30th November 2024, the amendments specify that these cases will also be directed to the empowered Additional/Joint Commissioners with All India jurisdiction for adjudication. This ensures that all pending DGGI cases are resolved under the updated framework’s
The amendments, effective from 1st December 2024, aim to streamline and expedite the adjudication process by reducing jurisdictional complexities and ensuring a uniform approach across the country. Tax authorities are instructed to issue trade notices to publicize these changes and are encouraged to report any implementation challenges to the Board for resolution.
ARTICLE: WHETHER TRU IS EMPOWERED TO ISSUE CIRCULAR UNDER GST LAWS?
The Tax Research Unit (TRU) is a wing which is established by the Department of Revenue (DoR) under the Ministry of Finance, which plays a vital role in modeling fiscal and tax policies. The unit established based on the recommendations of the Tax Administration Reform Commission (TARC), TRU aims to ensure consistency and rationality in policymaking by incorporating multidisciplinary inputs from officers of the Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC), economists, and statisticians etc.
The Major objectives[1] of TPU include the following:
- Carry out studies on various topics of fiscal and tax policies referred to it by CBDT and CBIC and to provide independent analysis on such topics
- Prepare and disseminate policy papers and background papers on various tax policy issues,
- Assist the Tax policy Council (TPC) chaired by FM in taking appropriate tax policy decisions,
- Liaise with the state Commercial Tax Departments.
However, a noteworthy question regarding the TRU’s authority to issue circulars was stressed in the case
Association of Technical Textiles Manufacturers and Processors & Anr. Vs. Union of India & Ors. W.P.(C) No. 5933 of 2019 (High Court – Delhi).
Issue in Focus: The case concerned the validity of Circular no: 80/54/2018-GST dated 31 December 2018, which clarified the classification of goods, specifically polypropylene woven and non-woven bags. The Circular was issued by the TRU, but trade and industry raised questions that whether the TRU had the authority under GST laws to issue such clarifications.
Court’s Ruling: The Hon’ble Delhi High Court ruled that the Circular issued by the TRU was invalid. The Court found that under the GST law, the TRU has not been granted the authority to issue clarifications regarding the classification of goods. The court noted the following reasons for quashing the Circular:
- The TRU did not have the power under the Goods and Services Tax (GST) laws to issue clarifications about the classification of goods.
- The Circular failed to refer to relevant provisions in the Customs Tariff Act, particularly those related to Section XI and Chapter 56.
- The Circular did not examine Chapter 39 of the Customs Tariff Act, which explicitly excluded textiles from its scope.
The court settled that the TRU was not authorized to make such clarifications and therefore, quashed the Circular. However, it emphasized that the issue of classification would remain open for determination by the competent authority in appropriate proceedings.
This case clarifies that while the TRU plays an essential role in tax policy formulation, it does not have the legal authority under the GST framework to issue clarifications on the classification of goods. Any such clarifications need to be issued by competent authorities authorized under the GST laws. Thus, Tax Research Unit has no authority to issue Circular u/s 168 of CGST Act.
Legal Maxim/ Phrase | Legal Principle/ Concept |
Mens rea | Guilty mind. |
Misnomer | A wrong or inaccurate name or term. |
Modus operandi | Way of working. |
Modus Vivendi | Way of living. |
Mutatis Mutandis
|
(Used when comparing two or more cases or situations) making necessary alterations while not affecting the main point at issue.
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DUE DATES – GST COMPLIANCES IN DECEMBER 2024 | |||
Monthly | Quarterly | Other Due Dates | |
GSTR-3B (Nov, 2024) 20th Dec,2024 |
GSTR-3B (Oct-Dec, 2024) 22nd Jan, 2025, 24th Jan, 2025 |
GSTR-5 (Nov,2024) 13th Dec, 2024 |
GSTR-5A (Nov,2024) 20th Dec, 2024 |
GSTR-1 (Nov,2024) 11th Dec,2024 |
GSTR-1 (Oct-Dec, 2024) 13th Jan, 2025 |
GSTR-6 (Nov,2024) 13th Dec, 2024 |
GSTR-7 (Nov,2024) 10th Dec, 2024 |
IFF (Optional) (Nov 2024) 13th, Dec,2024 |
CMP-08 (Oct-Dec,2024) 18th Jan, 2025 |
GSTR-8 (Nov,2024) 10th Dec,2024 |
RFD-10 2 years from the last day of the quarter in which supply was received |
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