GST at 6 - SC and HC - Key Case Laws - 5 Sept. 2023 - CA Pritam Mahure and Asso.

GST @ 6!
ALL KEY OBSERVATIONS BY SC AND HC!
[5th September 2023]
CA Pritam Mahure and Associates!

Click on the Topics!
Composite
Levy Consideration Business Goods Services Classification
Supply
ITC –
Valuation ITC – Basic ITC - Burden ITC – Against ITC – Blocked ITC – Reversal
Favourable
ITC –
Agreements/
Availment / GSTR – 3B Registration POS TOS Accounts
Contracts
Utilisation
Revenue-
E-way Bills Refund Section 73/ 74 Best Judgment Penalty
Neutrality
CA Pritam Mahure and Associates

Communication Adjudication Appeal Directors Exemptions Interpretation
Under-protest Pre-deposit Blocking Global VAT Judgments Circulars
Scrutiny Investigation Summons Seizure Search Arrest
Provisional
Taxing Policy Earlier Laws Constitution GST Law
Attachment
Back
Intermediary Interest
Back
LEVY!
‘User Development Fees’ – Itself a tax!
Delhi • … the UDF is in the form of 'tax or cess’ collected for

International
Airport [SC - CA financing the cost of future projects and there was no
No. 8996/2019]*
consideration for services provided by the assessee to
Para 35 the customer, visitors, passengers, vendors etc.
* Service Tax
Back
Liability is on Supplier!
• The liability to pay tax under the GST regime is

Bharat Forge Ltd
[2022 (64) GSTL 3 on the supplier. He must make inquires and
(S.C.)]*
make an informed decision as to what would
Para 38 be the relevant HSN Code applicable to the
items and the rate of tax applicable.
* GST
Back
Profit share – Not renting service!
• It appears to reason that not just the immovable property portion

Grand Royale Entp. of the hotel, but also, the employees and other staff, goodwill and

Ltd. [2019 (31)
other paraphernalia …there is no “fixed rent” that is payable …the
GSTL 453 (Tri.
Chennai)]* consideration for license to run, conduct and operate the hotel is a
“license fee” equivalent to 15%/20% of the annual …the
Para 5.2 transaction between the appellant and IHCL is definitely not one of
“renting of immovable property” but a business transaction
* Affirmed by SC [2022 (63) GSTL
412 (SC)] Back
* Service Tax CA Pritam Mahure and Associates
Quantification process cannot determine
taxability!
• … although the quantification of royalty towards a

Bai Mamubai Trust claim of damages involves ascertaining the market rent
2019 (31) GSTL
0193 (Bom)] payable with respect to the property alleged to be
illegally occupied, the compensation liable to be paid
Para 73
does not acquire the character of consideration so as to
make the transaction a supply.
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Partner - Whether an employee!
• When a partnership agreement recites that one of the partners

will receive a salary for the services rendered by him to the

Cadila Healthcare partnership business the contract is regarded as a contract of
Ltd. [2022 (66)
GSTL 99 (Guj.)]* partnership and is not designated as a contract of service. An
agreement to share both profits and losses in addition to a salary
Para 23.3 points to the existence of a partnership and an agreement to share
• ST profits only in addition to a salary indicates the relationship of

master and servant or principal and agent.
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CONSIDERATION!
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Remittance is consideration!
• The mere payment in the form of remittances or
amounts, by whatever manner, either for the duration
Northern of the secondment, or per employee seconded, is just
Operating System
[2022-TIOL-48-SC- one method of reckoning if there is consideration.
ST-LB]*
• The other way of looking at the arrangement is the
Para 58 economic benefit derived by the assessee, which also
secures specific jobs or assignments, from the overseas
* Service Tax judgment
group companies… The quid pro quo … is implicit… Back
Consideration can be a right, interest, profit
or benefit!
• …In … Fiat India Private Limited, (2012) 9 SCC 332, this
Court observed that consideration means something
Tata Motors Ltd
[SC - CA No. which is of value in the eye of the law. In other words, it
1822/2007]* may consist either in some right, interest, profit or
Para 61 benefit accruing to one party, or some forbearance,

detriment, loss or responsibility, given, suffered or
* VAT undertaken by the other.
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Credit Note – Can be a consideration!
• … we hold that the amount shown in the account of the
dealer in the form of a credit note is nothing but a price
Tata Motors Ltd received for a sale of a spare part by the dealer which is
[SC - CA No.
from his stock and which belongs to him.
1822/2007]*
• …a credit note issued by a manufacturer to the dealer,
Para 48/ 70
in the situations explained above, is a valuable
consideration within the meaning of the definition of
* VAT
sale and hence, exigible to sales tax … Back
‘Consideration’ - Who pays is irrelevant!
• …The person who pays the valuable

Tata Motors Ltd
[SC - CA No.
consideration in a sale transaction is irrelevant
1822/2007]* so long as it is paid.
Para 65/48 • 48… The nature of consideration in the form of
a credit note is also monetary in nature.
* VAT
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Payment - Can be in different forms!
• … Payment need not, however, be made in cash: a

Tata Motors Ltd method of payment that enables the seller to obtain
[SC - CA No.
1822/2007]* money such as the use by the buyer of a credit card or a
debit card or digital cash or cheque or banker’s draft or
Para 47
trading cheque also comes within the expression
“payment of price”
* VAT
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Receiving spare parts – Not consideration!
• The judgment in Mohd. Ekram Khan does not apply to a

Tata Motors Ltd
[SC - CA No. case where the dealer has simply received a spare part
1822/2007]* from the manufacturer of the automobile so as to
Para 70 replace a defective part therein under a warranty

collateral to the sale of the automobile
* VAT
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Consideration and Services – Nexus must!
• This court, in Bhayana Builders (supra), ruled that to
Delhi attract service tax levy, a taxable service has to be

International provided to a recipient, by a service provider, for a
Airport [SC - CA
No. 8996/2019]* consideration and in the absence of any nexus to any
service rendered, an amount charged, or value of service
Para 32
or goods provided without a consideration, would not
* Service Tax be a taxing incident.
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GST applicable only on ‘commission’!
• Making the entire bet amount that is received by the

totalisator liable for payment of GST would take away the
Bangalore Turf
Club Ltd.[2020 principle that a tax can be only on the basis of consideration
(51) GSTL 228 even under the CGST. The consideration … is … commission for
(Kar.)]
planting a totalisator. This can be nothing different from that of
a stock broker or a travel agent - both of whom are liable to
Para 34
pay GST only on the income - commission that they earn and
not on all the monies that pass through them.
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Retained by-product is not a ‘consideration’!
• .. the by-products were allowed to be

Shiridi Sainadh
Industries [2021 retained by him free of cost. On a conspectus
(51) GSTL 374
(A.P.)] of the terms of agreement, we hold that the
Para 20 by-products form part of compensation but

not consideration.
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BUSINESS!
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Selling at a ‘cheaper rate’ also qualifies
‘business’!
• It is not disputed that the petitioners are selling the medicines,
may be at a cheaper rate but for consideration in the course of
Nagri Eye their business.
Research
Foundation [2021 • Mr. Joshi has failed to substantiate or justify his submission as to
(54) GSTL 11 how such activity of selling medicines to the patients for
(Guj.)]
consideration could not be said to a trade or commerce.
Para 9 • For the purpose of “business” under Section 2(17) of the Act, it is
immaterial whether such a trade or commerce or such activity
is for pecuniary benefit or not. Back
Profit motive – Not required!
• As regards absence of profit motive, we find that the
charging provision under Section 68 of the Act provides
Rajasthan Ex-
for levy of Service Tax on the value of taxable service

Servicemen
Welfare ... [2018
(15) GSTL 328 ... Value of taxable service has been defined under
(Raj.)]* Section 67 to be gross amount charged by the service
Para 5 provider as consideration. There is no requirement

* Service Tax that the service provider should provide service for
profit motive. Back
‘Business’ – Includes renting of premises but
not ‘illegal’ occupation!
• In the absence of reciprocal enforceable obligations, it would not
be correct to characterise the … occupation of the … against
Bai Mamubai Trust payment of royalty as a ‘supply’ for ‘consideration’ on which GST is
2019 (31) GSTL
0193 (Bom)] payable… “Business” also includes the admission, for a
consideration, of persons to any premises. But as discussed above,
Para 76/ 77 no positive act of admission into premises for a consideration can
be said to have taken place where the plaintiff’s allegation is that of
illegal occupation.
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‘Business’ – Incidental activity does not
require frequency!
• … in order that an activity, to attract the definition of business,
there must be an intention to carry on business... In order that an
incidental activity would qualify itself to be brought under the
Prakash Impex
2019 (29) GSTL definition of “business”, such incidental transaction must be in
0705 (Mad.)] connection with the main activity, trade, commerce, manufacture,
adventure or concern. …,. By use “any transaction in connection
Para 13
with the business”, one can hold that the Act itself does not
contemplate the frequency or regularity or continuity of the
*VAT judgment transactions, Back
‘Sale’ – Business in its entirety cannot be
sold!
• The definition of the expression ‘sale’ would

apply to a case only if the sale takes place in

Paradise Food
Court [2018 (16)
GSTL 361 (A.P.)] the course of trade or business, as per Section
2(28). A business in entirety, cannot be sold in
Para 29
the course of trade or business, as there will
be no business left thereafter, to deal with.
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PWD – ‘Dealer’ for indirect taxes!
• The Central Public Works Department … contended
UoI vs State of that the Rajasthan Sales Tax Act would not be

Maharashtra [2018 applicable insofar as its activities are concerned and
(17) GSTL 408
(Bom.)]* that it would not be a dealer within the scheme of that
Act. The said contention was negatived by the Hon’ble
Para 5
Supreme Court [Kayra Palak Engineer, CPWD, Bikaner
* Sales Tax 2004 (177) E.L.T. 3 (S.C.)]
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GOODS!
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‘Goods’ in Constitution – Includes intangibles!
• The definition of ‘goods’ in the Constitution is an
inclusive definition. It has a very wide sweep. All
Teesta Distributors materials, commodities and articles are included in the

[2018 (19) GSTL 29
(Cal.)] definition. The definition, to my reading, is not limited
to tangible materials, commodities and articles. An
Para 22
intangible product such as a software would come
within the definition of ‘goods’ appearing in Article
366(12) of the Constitution of India. Back
‘Lotteries’– Liable to GST!
• Entry 6 of Schedule III of CGST Act, 2017 takes out

‘actionable claims’ other than lottery, betting and
Teesta Distributors
[2018 (19) GSTL 29 gambling from the scope of such Act. Consequently, …
(Cal.)] since, lotteries are kept out of the purview of
Para 34 ‘actionable claims’ which do not attract the CGST Act,

2017, lottery can therefore be charged to tax under
the CGST Act, 2017
Back
‘Actionable claims’ are ‘goods’!
• Definition of goods as occurring in Article 366(12) is inclusive
definition and does not specifically excludes actionable claim from its
definition.
Skill Lotto
Solutions Pvt • We are of the view that definition of goods under Section 2(52) of the
Ltd [2020 (43) Act, 2017 does not violate any constitutional provision nor it is in
GSTL 289 (SC)] conflict with the definition of goods given under Article 366(12).
• The inclusion of actionable claim in definition “goods” as given in

Para 33/ 49/ 59
Section 2(52) of Central Goods and Services Tax Act, 2017 is not
contrary to the legal meaning of goods and is neither illegal nor
unconstitutional. Back
‘Actionable claims’ are out of ambit of GST!
• The scope of definition of ‘consideration’ extends only
in relation to “the supply of goods or services or both”.
Gurdeep Singh Since, the said activity or transaction relating to the
Sachar 2019 (30)
GSTL 0441 (Bom)] actionable claim qua the amounts of participants
pooled in escrow arrangement, for which only
Para 14
acknowledgement is given, is neither supply of goods
nor supply of services, the same is clearly out of the
purview of the expression ‘consideration’. Back
VAT regime - Dominant Nature test is not
determinative!
Bharat Pest
Control [2018
(13) GSTL 401 • … the dominant nature test would no
(SC)]
longer be determinative, …
Para 5
* VAT
Back
If its ‘goods’ then its not a service!
• We are of the view that the artificial segregation of the

transaction, as in the case on hand, into two parts is not tenable

Quick Heal Tech. in law. It is, in substance, one transaction of sale of software and
Ltd. [2022 (63)
GSTL 385 (SC)]* once it is accepted that the software put in the CD is “goods”,
then there cannot be any separate service element in the
Para 55 transaction… even otherwise the user is put in possession and full
control of the software. It amounts to “deemed sale” which would
* Service Tax not attract service tax.
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Sale – If distinct, separate tax treatment!
• The transaction in the appellant before us is a clear transaction of

sale of study material by the assessee-appellant to its
Cerebral Learning

Sol. Pvt. Ltd [2018 coachees/trainees. Its a distinct transaction for which “as
(37) GSTL 37 (Tri. concurrently found by the primary and appellate authority,
Del)]*
separate value is receipted, documented and recorded”. In any
event, the exemption notification engrafts no restrictive condition
Para 3
• Affirmed by SC [2022 other than those set out therein which are satisfied in the present
(67) GSTL 4 case.
• Service Tax
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SERVICE!
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‘Any’– Doesn’t mean ‘everything’!
• Hon’ble Supreme Court in Government of NCT of Delhi v. Union of

India in C.A. No. 2358 of 2017 … cites various judgments on the

MRF Ltd [2018 (18)
interpretation of the term “any” … for the proposition that merely
GSTL 193 (Mad.)]
because the term "any" is used, it does not mean that the
Para 43/45 following phrase must be given a wide interpretation… It is further

submitted that the Hon’ble Supreme Court has held that the term
“any” need not mean “every” and must be read contextually.
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Statutory obligation – Not a service!
• … circular issued by the CBEC, on 18.12.2006,.. clarified that … “…

A number of sovereign/public authorities (i.e. an agency
Delhi
International constituted/set up by government) perform certain functions/
Airport [SC - CA duties, which are statutory in nature. … …the activities performed
No. 8996/2019]*
by the sovereign/public authorities under the provision of law are in
the nature of statutory obligations…Such activity is … statutory
Para 36
function Therefore, such an activity … does not constitute provision
* Service Tax of taxable service…

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Statutory obligation – Not a service!
• …It is not a contractor simplicitor of maintenance of
immovable property. It is not as if there is a existing
Shri Krishna
building comprising of Flats, fully occupied, the

Chaitanya
Enterprises [2018
(14) GSTL 533 maintenance and upkeep of which is handed over
(Bom.)]* under a contract. It is a statutory obligation
Para 27 superimposed on a contract to sell a Flat/unit in a

building to be constructed on a piece or parcel of land.
* Service Tax
That cannot be confused with a taxable service. Back
Sovereign function – Maintaining security of
State!
• …the nature of its function is to protect the tea plantations and
the personnel working therein against unlawful acts is also

MCLEOD RUSSEL uncontroverted. Therefore, prima facie there is every indication
(INDIA) LTD. [2015
(39) STR 8 (Cal.)]* that the service rendered by this force is sovereign and hence not
a “support service…That the maintenance of the security of the
Para 19/ 21 State was a sovereign function was emphasised in the judgment
of the Supreme Court in M/s. Bakhtawar Singh Bal Kishan v. Union
* Service Tax of India reported in (1988) 2 SCC 293.
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COMPOSITE SUPPLY!
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Violation of ‘composite supply’ not
permissible!
• The impugned levy imposed on the ‘service’ aspect of the transaction
is in violation of the principle of ‘composite supply’ enshrined under
Mohit Minerals
Pvt Ltd Section 2(30) read with Section 8 of the CGST Act.
[2022 (61) GSTL • Since the Indian importer is liable to pay IGST on the ‘composite
257 (SC)]
supply’, comprising of supply of goods and supply of services of
transportation, insurance, etc. in a CIF contract, a separate levy on
Para 147 (v)
the Indian importer for the ‘supply of services’ by the shipping line
would be in violation of Section 8 of the CGST Act.
Back
Electricity - Supply to tenants is taxable!
• It also cannot be said that, the petitioner is engaged in
the supply or trading of electricity … The petitioner does
Srijan Realty Pvt. not have a licence to undertake trading in
Ltd. [2019 (24)
GSTL 169 (Cal.)]* electricity…therefore, the petitioner cannot be said to be
distributing or selling or trading in electricity … to the
Para 18
occupants of the commercial complex… the only other
thing that remains to describe the activity undertaken
by the petitioner, is service. Back
Ancillary supply to be treated as par with
‘principle supply’!
• … the term taxability would take within its sweep not being
taxable … the principal supply of transmission and distribution of
Torrent Power Ltd electricity is naturally bundled and supplied in conjunction with the
2020 (34) GSTL
385 (Guj.)] related/ancillary services in the ordinary course of business,
accordingly, in view of the provisions of clause (a) of Section 8 of the
Para 24/28 CGST Act, the tax liability of such composite supply is required to be
determined by treating the same as a supply of the principal
supply namely, transmission and distribution of electricity.
Back
‘Independent supplies’ may not qualify as
‘composite supply’!
• While clubbing of two independent supplies may be resorted to for

the purposes of valuation of each of those supplies, there is no
Abbott Healthcare
Pvt Ltd 2020 (34) scope of clubbing of two independent supplies so as to notionally
GSTL 579 (Ker.)] alter the very nature of each of those supplies as they existed in
fact, at the relevant point in time. For a supply to be seen as a
Para 8
composite supply it must answer to the definition of the term
“composite supply” at the time of its supply.
Back
Composite supply – Cannot be split and
taxed!
• However, considering the various services rendered by
the assessee like erection/installation/commissioning
of goods at customers’ site and incidentally they may

Jyoti Ltd [2022 (64)
GSTL 129 (S.C.)]* also be providing the services of drawing, design etc.,
... The contract can be said to be ‘works contract’.
Para 4
Hence, the assessee cannot be said to be rendering
the services as a consulting engineer and therefore
* Service Tax (for period prior to
Dec. 2000) liable to pay the service tax. Back
VALUATION!
Back
Value to be determined as per Sec. 15!
• Section 15 of the Act, 2017 by sub-section (2) it is provided what

shall be included in the value of supply. What can be included in the
Skill Lotto value is enumerated in sub-clause (a) to (e) of sub-section (2) of
Solutions Pvt Ltd
Section 15. Further, sub-section (3) of Section 15 provides that what
[2020 (43) GSTL
289 (SC)] shall not be included in the value of the supply.
• What is the value of taxable supply is subject to the statutory

Para 78/ 80 provision which clearly regulates, which provision has to be given its
full effect and something which is not required to be excluded in the
value of taxable supply cannot be added by judicial interpretation.
Back
‘Charging’ provision and ‘valuation’ provision
are inseparable pillars!
• A charging provision and the machinery provision are two sides of

SAL Steels Ltd
2020 (37) GSTL the same coin. A substantial provisions of chargeability and the
0003 (Guj.)]* machinery provisions of valuation have a navel relationship of
cause and effect with the result that one cannot survive without the
Para 45
other, and they are inseparable pillars of an integral tax code.

Back
Computation not possible – No intention to
tax!
Meghmani
Organics Ltd. [2019 • It is settled legal position that in a taxing
(22) GSTL 504
(Guj.)]* statute, if something cannot be computed, the
Para 14 legislature never intended to tax such item.
Back
If amount paid is not towards price then
not part of TV!
• Thus, duty is chargeable on the “price actually paid
for the goods”,…No amount not paid as
D J Malpani
[2019 (366) ELT consideration for the goods can go to make
385 (SC)] transaction value. …Thus, if an amount is paid at the
Para 14 time of the sale transaction for a purpose other than

the price of the goods, it cannot form part of the
* Excise transaction value…

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ITC - BASIC!
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ITC should be availed on self-assessment!
• The primary source is in the form of agreements, invoices/ challans,

receipts of the goods and services and books of accounts which are
Bharti Airtel Ltd maintained by the assessee manually/electronically.
[2021 (54) GSTL • … books of accounts and record … are primary documents and
257 (SC)]
source material on the basis of which self-assessment is done by the
registered person including about his eligibility and entitlement to
Para 46 get ITC and of OTL.
• Form GSTR2A is only a facilitator for taking an informed decision

while doing such self-assessment.
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Credit – Nexus required not necessity!
• The only requirement under the Cenvat Credit Rules,
DBOI Global 2004 to satisfy the definition on input services is the use
Services Pvt. Ltd. in providing of output services. Therefore, where the
[2019 (20) GSTL
351 (Bom.)]* input services are used in providing output services and
there is some nexus, then invoking the test of necessity
Para 5
would be adding words to the rule which is not
permissible in a fiscal statute.
Back
CENVAT – Credit available even if amount
withheld for performance guarantee!
• It is clear that CESTAT in its finding (in para 4) noticed the

clarification issued by the Board and held that the
Hindustan Zinc
Ltd [2020 (33) withholding of performance guarantee in the present case is
GSTL 36 (Raj.)]* covered in para 5(b) [of circular dated 30-4-2010]… clear
reference to amounts withheld towards various counts
Para 2/7
including security, in the opinion of the Court, comprehends
the withholding of amounts towards performance guarantee.
• Service Tax judgment
• Also refer Hindustan Zinc Ltd Back
2014 (34) STR 440 (Tri.)
Credit – Entitlement to be determined at the
time of receipt!
• It is a settled principle of law that entitlement of Cenvat

Vodafone Mobile credit is to be determined at the time of receipt of the
Services Ltd [2019
(27) GSTL 481 goods. If the goods that are received qualify as inputs or
(Del.)]*
capital goods, the fact that they are later fixed/fastened
Para 73 to the earth for use would not make them a non-
excisable commodity when received.
• Pending before SC Back
Credit – If availed based on Tribunal judgment
then not mala fide!
• If any assessee was under bona fide belief on account of

SKS Ispat & Power law laid down by the Larger Bench of the CESTAT... If the
Ltd [2019 (27)
GSTL 328 law was subsequently declared in favour of the
(Chattis.)]*
Revenue by the High Court that would not relate back
Para 7 to the period of assessment to brand the assessee’s
action of availing credit as mala fide.
Credit – Available even if higher tax charged
than applicable!
• Merely because the selling dealer may have acted with
abundant caution in realizing the higher amount to
R K Distributors
[2019 (20) GSTL avoid any litigation with the State authorities and in
333 (All.)]* absence of any allegation of the assessee had passed
Para 18 on the liability of higher tax paid, the question of law

raised in the present case is answered in the negative
* UP VAT Act i.e. in favour of the assessee and against the revenue.
Back
Cenvat credit – Allowed to be c/f to GST!
• …it also can be construed that, if Section 142(3) is not permitted to

Ganges be invoked in meeting situations like this, that situation would

International Pvt.
render that taxpayer remediless, hence, here also the “Doctrine of
Ltd. [2022 (66)
GSTL 186 (Mad.)]* Necessity” can be invoked, in the considered opinion of this
Court…. claim made by the petitioners can very well be considered
Para 44/48 for the purpose of permitting the petitioners to carry forward the
accrued credit to the electronic credit ledger of the GST regime.
* GST
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ITC – Available on wind mill!
• … entered into an agreement with the Power Grid

Corporation for transmitting the power and getting

Thiagarajar Mills
(P) Ltd. [2018 (15)
GSTL 649 (Mad.)]* supply ... In that event, when the erection of wind mill
for the purpose of generating power in the
Para 13
manufacturing process shall be construed as capital
* TN VAT
goods, Input Tax Credit shall be made available …
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Credit – Cannot be denied merely because it
is availed on ‘debit notes’!
• It is not his case that any of these decisions was
overturned ... He also has no explanation to offer as to
Tiara Advertising
2019 (30) GSTL why the second respondent did not even deal with the
0474 (Tel)] case law cited before him. We therefore hold that
Para 16 disallowance of Cenvat Credit on the ground that the

petitioner had availed the same by producing debit
notes instead of invoices cannot be accepted.
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ITC – BURDEN OF PROOF!
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ITC - Needs to be substantiated through
documents!
• Therefore, if the tax had not reached the kitty of the
Government, then the liability may have to be eventually
D Y Beathel
Entp. [2022 (58) borne by one party, either the seller or the buyer.
GSTL 269 • When it has come out that the seller has collected tax from
(Mad.)]
the purchasing dealers, the omission on the part of the seller
to remit the tax in question must have been viewed very
Para 12/14
seriously and strict action ought to have been initiated
against him.
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ITC – Burden of proof is on the dealer!
• The burden of proving the correctness of input tax credit remains

upon the dealer claiming such input tax credit. Such a burden of

Bhavani Entp. proof does not get shifted on to the Revenue…. the assessee …
[2018 (15) GSTL
703 (Kar.)]* never discharged the said burden in the present case…It cannot be
said, in these circumstances, that the appellant-assessee did not
Para 10/12 ‘knowingly’ produce such invoices, knowing them to be false or
fake. A dealer entering into a genuine transaction of purchase
* Karnataka VAT always knows the existence and identity of selling dealer.
Back
ITC – Mere reflection in ECL is not sufficient!
TVL Ashok • Prime facie … the petitioner had no documents to

Trading substantiate a valid availing of input tax credit.
Company [2022
(60) GSTL 429 • Mere reflection of the amounts in the Goods and Services Tax
(Mad.)] records electronically is not sufficient. If credit is to be
allowed and adjusted on such transactions, it would lead to
Para 6 unintended benefits being conferred
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ITC – No credit if stock records do not tally!
• …it is observed that stock of inputs declared as

Himmatnagar Wire

Industries [2018 on 14-3-2011 did not tally. Therefore, on the
(18) GSTL 390
(Guj.)]* stocks of inputs which did not tally, the
Para 5 authority is justified in rejecting the claim of

the Cenvat Tax Credit.
Back
ITC – FAVOURABLE TO
TAXPAYER!
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ITC – Purpose of credit is to give benefit!
• While considering the provisions of Section 17(5)(d), the narrow

construction of interpretation put forward by the Department is
Safari Retreats Pvt.
Ltd. [2019 (25) frustrating the very objective of the Act, inasmuch as the petitioner
GSTL 341 (Ori.)]* in that case has to pay huge amount without any basis… in our
considered opinion the provision of Section 17(5)(d) is to be read
Para 19/ 20
down … inasmuch as …the very purpose of the credit is to give
benefit to the assessee.
* Pending before SC
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ITC - Cannot be denied if seller does not
deposit tax!
• … in the case of Assistant Commissioner (CT), presently
Thiruverkadu Assessment Circle, Kolathur, Chennai v. Infiniti
Sri Ranganathar
Valves … [2020 Wholesale Ltd., reported in [2017] 99 VST 341 (Mad),
(42) GSTL 326 wherein it has held that input tax credit cannot be
(Mad.)]
disallowed on the ground that the seller has not paid tax to
the Government, when the purchaser is able to prove that
Para 3
the seller has collected tax and issued invoices to the
purchaser.
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ITC – Not deniable if selling vendor does not
pay!
• The only reason given by the respondent for denying
the Input Tax Credit on the said amount is that their

Elite Furniture
Mart [2018 (14) selling dealers have not paid the tax collected from
GSTL 508 (Mad.)]* the petitioner into the Government Treasury…This
Para 8 cannot be a reason for reversing the Input Tax Credit,

as held by this Court in Sri Vinayaga Agencies v.
* TN VAT Act
Assistant Commissioner (CT), Vadapalani [60 VST 283].
Back
ITC – No denial because selling dealer does
not report!
• …merely because the selling dealer has not disclosed
the transaction in his monthly return that cannot by
Inko Chemicals itself furnish a cause …reversal of ITC from the

India (P) Ltd. [2018
(15) GSTL 523 purchasing dealer. Similarly, in respect of the other
(Mad.)]*
aspect, that is, the impact of de-registration of selling
Para 9 dealer, .. this Court in Bhairav Trading Company case,
has come to the conclusion that it cannot lead to
* TN VAT
reversal of ITC or levy of tax on the Assessee. Back
ITC – Subsequent cancellation may not impact !
• 13. Admittedly at the time of transaction, the name of the supplier
as registered .. was already available with the Government record
• 14. It is not the case of the respondents that there is a collusion

Gargo Traders between the petitioner and supplier …
[WPA 1009/2022
(Cal.)] • 16. The respondent authorities only taking into consideration of
the cancellation of registration of the supplier with retrospective
Para 13 to 16 effect have rejected the claim of the petitioner without
considering the documents relied by the petitioner.
* GST
• 15. This Court finds that without proper verification, it cannot be
said that there was any failure on the part of the petitioner .. Back
ITC – Subsequent cancellation may not impact !
• The petitioner’s/assesse’s transaction cannot be impacted by

TVL. Daesung subsequent cancellation of registration. In such like cases,

Electric India Pvt.
therefore, logically, the petitioner should be able to claim ITC, on
Ltd. [2018 (15)
GSTL 537 (Mad.)] such transactions… Assessing Officer is required to come to a
definitive conclusion before reversing the ITC that the subject
Para 14.5/ 15 transaction was bogus … if, such material was available with …
Assessing Officer, it had to be supplied to the petitioner.
* TN VAT Back
Presumption exists that ‘registration’ granted
after due verification!
• In the present case, undisputedly, the registration claimed by the assessee
had been granted by the respondent authority. Therefore, a presumption
Apparent does exist as to such registration having been granted upon due verification
Marketing Pvt of necessary facts. If the respondent proposed to cancel the registration thus
Ltd. [2022 (59) granted, a heavy burden lay on the respondent authority to establish the
GSTL 399 (All.)] existence of facts as may allow for such cancellation of registration.
• … by merely describing the assessee firm “bogus”, the respondent authority

Para 12/17 did not make known to the assessee the exact charge ... Correspondingly, the
respondent authority deprived the assessee of the necessary opportunity to
rebut the charge.
Back
ITC – Is an indefeasible right!
• …claim of credit of input tax is indefeasible as was the
case of Cenvat under Excise law and such credit of ITC
under VAT law which is equivalent to tax paid in the

Kirloskar Electric
Co. Ltd. [2018 (16)
GSTL 564 (Kar.)] chain of sales of the same goods, cannot be denied on
the anvil of machinery provisions or even provisions
Para 29
relating to time frame which is law of limitation only
bars the remedy rather than negativing the substantive
claims under the taxing statutes. Back
Credit – Is property in terms of Art. 300A!
• We may further add that the credit standing in

A B Pal Electricals
Pvt Ltd 2020 (33) favour of an assessee is “property” and the
GSTL 0008 (Del)]
assessee could not be deprived of the said
Para 8 property save by authority of law in terms of
Article 300A of the Constitution of India.
Back
Credit – Is property in terms of Art. 300A!
• … the credit standing in favour of an assessee is

Adinath Industries
2019 (30) GSTL property and the assessee could not be
0478 (Del.)]
deprived of the said property save by authority
Para 8 of law in terms of Article 300(A) of the
Constitution of India
Back
Article 265 – State cannot retain tax and deny
ITC to buyer!
• ITC cannot be … denied only because ITC claim is not made in
respect of Sale Invoices which are not pertaining to same Tax

Kirloskar Electric Period, nor it can be denied on the ground that such claim is not
Co. Ltd. [2018 (16)
GSTL 564 (Kar.)] made immediately…The machinery provisions of filing of Returns
under Section 35 of the KVAT Act cannot defeat the substantive
Para 30 claims …Article 265 of the Constitution of India does not entitle
the State to retain such tax paid by Selling Dealers and deny the
claim of ITC credit or set off in the hands of the Purchasing Dealers
Back
GSTR-2A is only a facilitator!
• … The first respondent without resorting to any action against the
fourth respondent who is the selling dealer has ignored the tax
invoices produced .. the action of the first respondent has to be

Suncraft Energy
Pvt Ltd [MAT 1218 branded as arbitrarily. Form GSTR-2A was explained by the
of 2023 (Cal.)] Hon’ble Supreme Court in Bharti Airtel Ltd. It was held that Form
GSTR-2A is only a facilitator
Para 9/6
• Form GSTR-2A was explained by the Hon’ble Supreme Court in
Bharti Airtel Ltd. It was held that Form GSTR-2A is only a
facilitator
Back
ITC – AGAINST TAXPAYER!
Back
No movement, no ITC!
• Merely because the tax invoice … produced, that by itself cannot be
ECOM Gill said to be proving the actual physical movement of the goods,
Coffee Trading which is required to be proved, as observed hereinabove.
[2023-TIOL-18- • If the purchasing dealer/s fails/fail to establish and prove the said
SC-VAT]
important aspect of physical movement of the goods alleged to have
been purchased by it/them from the concerned dealers and on which
*VAT the ITC have been claimed, the Assessing Officer is absolutely
justified in rejecting such ITC claim.
Back
To claim ITC, documentation must!
• … over and above the invoices and the particulars of

payment, the purchasing dealer has to produce further
ECOM Gill
Coffee Trading material like the name and address of the selling dealer,
[2023-TIOL-18- details of the vehicle which has delivered the goods,
SC-VAT]
payment of freight charges, acknowledgement of taking
delivery of goods including actual physical movement of the
*VAT
goods, alleged to have been purchased from the concerned
dealers.
Back
Bogus – Law never guards fraud!
• Once a transportation of goods … is shown to be

Jai Mata Di Cargo fraudulent, sham, bogus, circuitous or a device

Services P. Ltd.
[2018 (15) GSTL designed to evade tax under the Act, the statutory
226 (All.)]*
authorities under the Act and the court can always
Para 29 examine the substance of the transaction because the
* UP VAT Act
Legislature never intends to guard fraud.
Back
Credit – It is a concession and not a right!
• In the considered opinion of this Court, in light of the aforesaid

Jagadish judgments, the CENVAT credit is a concession and not a vested
Advertising
right and it has to be claimed keeping in view the CENVAT Credit
[2021 (48) GSTL
227 (Kar.)]* Rules 2004 and therefore, the learned Single Judge has erred in law
and in facts in allowing the writ petition by directing the Designated
Para 28 Committee to adjust the amount which was the subject matter of
CENVAT credit.
Back
Credit – It is a concession and not a right!
Thirumalakonda
Plywoods • … by nature ITC is a concession/rebate/benefit
[WP 24235 of 2022
(AP)] but not a statutory right has been reiterated in
Para 21 a thicket of decisions.
Back
Credit – Cannot be availed beyond time
limit of Sec. 16 (4)!
• … it is clear that ITC being a concession/benefit/rebate,

Thirumalakonda the legislature is within its competency to impose
Plywoods
[WP 24235 of 2022 certain conditions, including time prescription
(AP)]
• … The time limit prescribed for claiming ITC U/s 16(4) of
Para 25/27 APGST Act/CGST Act, 2017 is not violative of Articles 14,
19(1)(g) and 300-A of the Constitution …
Back
Not-filing GSTR-3B means no tax transferred
to Government!
• There are twin effect of such non-filing of GSTR-3B Return, first is
that no revenue is actually transferred to the Government and on
Kabeer Reality Pvt the other hand, the persons/tenants, to whom the petitioner has
Ltd 2020 (33) GSTL
027 (MP)] issued invoices, would avail GST credit…. It is noteworthy to
mention that GSTR-1 is declaration of tax liability and GSTR-3B is
Para 28/33 evidence of actual payment. … tax determination has already been
done …, as the petitioner itself has quantified its tax liability under
the GSTR-1.
Back
If tax not paid, purchaser cannot claim ITC!
• … However, as long as the tax paid by the purchaser to the supplier,

is not paid up to the Government by the supplier; the purchaser
Astha Enterprises cannot raise a claim of Input Tax Credit under the statute.
[WP NO. 10395/
2023] • …The mere fact that there is a mode of recovery provided under the
statute would not absolve the liability of the tax payer ..
Para 13/ 6/ 9 • 6. M/s D.Y. Beathel Enterprises … decision ignored the provision..
Section 16 (2)…Ecom Gill Coffee Trading … does not absolve the
assessee from .. Section 16 (2) ..
Back
ITC not available on invoices issued ‘after’
cancellation!
• The registration … cancelled … it is clear that the second
respondent could not have paid the tax … a registered
Jai Balaji Paper person is not entitled to credit of input tax in respect of
Cones [WP NO.
6780/ 2020] any supply of goods or services of both if tax is not paid
to the Government. …Therefore, there cannot be a
Para 6
mandamus… The petitioner is however entitled to
recover the amount from the suppliers in the manner
known to law. Back
Credit – Not available if vendor does not
deposit!
• … cancellation of registration with respect to three
dealers …after the purchase made… input tax credit is a
C P Rasheed [2019 concession permitted… However, when the selling
(20) GSTL 207
(Ker.)]* dealer at the first instance does not pay the amounts to
the Government, there can be no Input Tax Credit
Para 4/5
claimed…The assessee could definitely file a suit for
recovery from the entity from whom they made the
* Kerala General Sales
Tax Act purchase. Back
ITC – Evidence of movement of goods or bank
channel necessary!
• …purchases were made from those dealers whose
registrations were cancelled on the ground that they
were indulging in bogus billing … later on suffered

Ronak Foods [2018
(15) GSTL 530
(Guj.)] cancellation of registrations with retrospective
effect… not placed before the authorities any evidence
Para 6 / 7
of movement of goods or payments through banking
channels…Under such circumstances, no relief can be
* Gujarat VAT Back
granted …
ITC – BLOCKED CREDITS!
Back
Rent-a-cab services – No ITC as its for
personal convenience!
• Providing transportation service to the employees

cannot be said to be “input service” as it has nothing

Solar Ind. India
Ltd. [2022 (64)
to do with the manufacture of the goods.
GSTL 257 (S.C.)]*
• … it cannot be said that the High Court has committed
Para 2/3
any error in denying the Input Tax Credit and holding
* Excise/ CCR that such a service is excluded from the input service.
Back
ITC - Loss is different than ‘lost’!
• … I am of the view that the reversal of ITC involving

ARS Steel & Alloy Section 17(5)(h) by the Revenue, in cases of loss by
[2022 (52) GSTL
402 (Mad)] consumption of input which is inherent to
manufacturing loss is misconceived, as such loss is
Para 15
not contemplated or covered by the situations
adumbrated under Section 17(5)(h).
Back
Credit – Available on ‘guest house’ if not used
for personal use!
• The case of the Assessee, however, is that, none of the
guest houses were used for the personal use or
ACG Asso. consumption of the employees… Even in relation to a
Capsules Pvt. Ltd.
[2019 (20) GSTL guest house which may not have been situated close to
346 (Bom.)]*
the manufacturing unit of the Assessee, if it is pointed
Para 44/45 out that the use thereof was not for the personal use or
consumption of the employees, exclusion clause in the
* CENVAT Credit Rules
definition of input service, may not apply Back
Credit – Available on workmen’s
compensation policy!
• Workmen Compensation Policies…the availment of the
policy appears to be a statutory requirement and as
Ganesan Builders
Ltd [2019 (20) rightly contended by the assessee, this service is not
GSTL 39 (Mad.)]* used primarily for personal use or consumption of an
Para 11 employee and this, being the statutory requirement…For

the above reasons, the appeal …answered in favour of
* CENVAT Credit Rules the assessee
Back
ITC – REVERSAL!
Back
CENVAT – Reversal not required on receipt of
completion certificate!
• Cenvat credit availed in respect of input service is not
required to be paid back under any circumstances and
therefore, … was not legally required to reverse any credit
Shreno Ltd [2020
(34) GSTL 416 which was availed … till obtaining completion certificate i.e.
(Guj.)]* during the period when output service was wholly taxable in
their hands, merely because later on, some portion of the
Para 17
property was converted into immovable property on
account of receipt of completion certificate and on which no
• Service Tax judgment service tax would be paid ...
‘CENVAT’ – Reversal not required on
completion!
• …therefore, the respondent was not legally required to
reverse any credit which was availed by them during
Alembic Ltd [2019 the period 2010 till obtaining completion certificate i.e.
(29) GSTL 625
(Guj.)] during the period when output service was wholly
taxable in their hands, merely because later on, some
Para 17 portion of the property was converted into immovable
property on account of receipt of completion certificate
and on which no service tax would be paid in future. Back
ITC – AVAILMENT/
UTILISATION!
Back
Interest – Not applicable if taxpayer has ITC
balance!
• … interest, as held by the Supreme Court in the case of
Commissioner of Income Tax v. Anjum H. Ghaswala,
Maansarovar (252 ITR 1), is indented to compensate the revenue for
Motors Pvt Ltd
[2021 (44) GSTL loss of capital. In the present case, there is no loss
126 (Mad.)]
insofar as the revenue is in possession of the credit
Para 23 ‘which is good as cash’ as held by the Supreme Court in
the case of Eicher Motors (supra) and cannot thus be
said to be prejudiced in any way. Back
ITC - Interest and Penalty only if utilised!
• Though under Sections 73(1) and 74(1) of the Act,

proceedings can be initiated for mere wrong
Aathi Hotel
[2022 (61) GSTL availing of Input Tax Credit followed by imposition
343 (Mad.)]
of interest, penalty either under Section 73 or
under Section 74 they stand attracted only where
Para 19
such credit was not only availed but also utilised
for discharging the tax liability.
Back
ITC – Mere reflection is not ‘Availment’!
• Had it been a case where the credit shown in electronic
ledger, was availed or utilized for meeting any tax
Commercial Steel
Engg. Corp. [2019 liability for any year, there would be no error found in
(28) GSTL 579 the action complained but it would be stretching the
(Pat.)]
term ‘availment’ beyond prudence to treat the mere
Para 33 reflection of the transitional credit in the electronic
credit ledger as an act of availment, for drawing a
proceeding under Section 73(1) … Back
ITC – Reversal amounts to non-availment!
• The assessee did not maintain separate accounts and
Mangala Ispat initially availed Cenvat credit on the exempt product

(Jaipur) Pvt. Ltd. also. However, subsequently, it appears that such
[2018 (15) GSTL
487 (Raj.)]* credit so availed was reversed with interest …this Court
in case of Commissioner v. Ashima Dyecot Ltd. reported
Para 10
in 2008 (232) E.L.T. 580 has observed that reversal of
credit amounts to non-availment.
Back
GSTR-3B!
Back
GSTR-3B is a return for all purposes!
• …the efficacy of Form GSTR3B being a stop gap

Bharti Airtel Ltd arrangement for furnishing of return, as was
[2021 (54) GSTL
257 (SC)] required under Section 39 read with Rule 61,
would not stand whittled down in any manner. It
Para 46 would still be considered as a return for all
purposes though filled manually electronically.
Back
Rectification permissible, but in specified
manner!
• ... registered person is not denied of the opportunity to
Bharti Airtel Ltd rectify omission or incorrect particulars, which he could do in

[2021 (54) GSTL the return to be furnished for the month or quarter in which
257 (SC)]
such omission or incorrect particulars are noticed.
• … the law permits rectification of errors and omissions only

Para 46
at the initial stages of Forms GSTR1 and GSTR3, but in the
specified manner.
Back
B2B invoices reported as B2C!
• without entering into the merits of the claim of the

petitioner, the present petition is being disposed of
Neeta Sales
Corp. [2022 (56) with a direction that the petitioner may file a
GSTL 8 (All.)] fresh representation raising all his grievances
Para 7/8 before the competent authority. ..the competent

authority shall be under obligation to do the
needful in accordance with law …
Back
GSTR 3B – Permitted to file manually!
• … for August, 2017, the total tax liability of the petitioner was Rs.
128,63,47,508/- … Due to this unfortunate turn of events, the
VISHNU AROMA system accepted the petitioners’ GSTR-3B on 21-9-2017, but the
POUCHING PVT.
information and details in all the columns of this return were
LTD. [2019 (26)
GSTL 14 (Guj.)] shown as “zero” despite the fact that the tax liability for the month
in question had been duly paid by the petitioner. The petitioners are
Para 2/3/10 permitted to file manually GSTR-3B for August 2017 with correct
and true details and the respondents are directed to accept and
acknowledge such GSTR-3B manually filed Back
GSTR 1 – Correction of recipient’s GSTIN!
• GSTR-1 filed by the petitioner against the GSTIN of
Mahalaxmi Infra Eastern Coalfields …Instead it was quoted in the GSTIN

Contract Ltd. [2022 of respondent …The rectification exercise would
(67) GSTL 140
(Jhar.)]* remain revenue neutral… petitioner is allowed to make
the necessary correction in GSTR-1 form for January,
Para 12
2019…GSTN could allow the petitioner to make such
* GST
corrections through manual mode
Back
REGISTRATION!
Back
Reg. Cancellation – Revenue will suffer!
• …it was held that no useful purpose will be served by

TVL. Alamelu keeping such assessee out of the Goods and Services

Contracts [2023
(68) GSTL 383 Tax regime, as such assessee would still continue to do
(Mad.)]*
business and supply goods and not by bringing them
Para 7 back to the Goods and Services Tax fold/regime only
* GST
the revenue only suffer.
Back
Verification visit – Notice before visit needed!
• Concededly, no notice was issued to the petitioner

requiring, as mandated by Rule 25, his presence at the

Bimal Kothari
[2023 (68) GSTL
338 (Del)]* time of verification. … Furthermore, it appears that the
verification report, though generated, has not been
Para 11.1/11.2
uploaded, as required, in FORM GST REG-30 on the
common portal .
* GST
Back
CLASSIFICATION!
Back
Classification – Burden of proof on
Authorities!
• … unless the department can establish that the goods in question
can by no conceivable process of reasoning be brought under any of
Kesharwani Entp. the tariff items, resort can be had to the residuary item.
[2019 (28) GSTL
397 (Chattis.)] • … the burden of proof is on the State Government and the onus
also lies on them to first establish conclusively that by no
Para 26/27 conceivable process of reasoning can the said product be brought
under any of the tariff items and hence the product was being
brought under the residuary item.
Back
Classification – Burden always on Revenue!

Perfaty Wanmele
India Pvt. Ltd. • It is settled that onus or burden to show
[2018 (19) GSTL
448 (All.)] that a product falls within a particular
Para 21 tariff item is always on the Revenue
Back
Classification – Burden always on revenue!
• It is settled law that when one particular item is
Godrej Consumer covered by one specified entry then the Revenue is not

Products Limited permitted to travel to the residuary entry…It is settled
[2018 (13) GSTL
135 (All.)]* law that onus or burden to show that a product falls
within a particular tariff item is always on the
Para 17
Revenue. If the Revenue leads no evidence then the
* UP VAT
onus is not discharged.
Back
Classification - ‘Common parlance test’ most
reliable standard!
• The Courts have consistently adopted the “common parlance test”

as the most reliable standard for interpreting terms and entries in
Dabur India Ltd
2020 (34) GSTL 9 taxing statutes. This is of course subject to various exceptions where
(All.)] the statutory text is completely contrary to the “common parlance”
context. The common parlance test is also considered an extension
Para 20
of the established canons of statutory interpretation of taxing
statutes.
Back
Classification – Importance to be given to
popular meaning!
• In the matter of classification of goods in taxing
Sarva Shri Neeraj statutes… More importance is given to the popular

Misthan Bhandar understanding of the words used. The popular
[2019 (24) GSTL
513 (Uttar.)]* understanding would mean the understanding of those
persons who are in the concerned trade and the
Para 22
question would be as to how they understood the
particular words.
Back
Classification – Common parlance and usage
should be considered!
• … in absence of technical term or a terms of science or art, shall
be presumed to have been used in ordinary sense or common
Hamdard (WAKF) parlance. What is more important is whether the broad
Lab. [2019 (20)
GSTL 46 (All.)] description of the article fits in with the expression used in the
Tariff.... Moreover, the functional utility and predominant or
Para 25 primary usage of the commodity which is being classified must be
taken into account... A residuary entry can be taken refuge of only
in the absence of a specific entry.
Back
‘Common Parlance Test’– Not applicable if
specific entry!
• The common parlance test has no relevance when
there is a specific entry… When ice-cream is treated as

Milano Ice Cream
Pvt Ltd [2018 (18) a separate commodity included in the notified goods
GSTL 19 (Ker.)] taxable at 14.5% there could not have been a
Para 8/9 compounding application filed by the petitioner, taking

ice-creams to be coming within the definition of cooked
food.
Back
Classification – Specific overrides general!
• …when there is a specific entry in the

Khush Bhakht
Schedule, the same would override a general

Electronic
Engineers Pvt. Ltd.
[2018 (18) GSTL entry. This proposition of law has been laid
808 (Bom.)]
down by the Supreme Court in the case of
Para 17 State of Maharashtra v. M/s. Bradma of India
Ltd., reported in (2005) 2 SCC 669.
Back
If specific entry relevant then residuary not
applicable!
• It is well-settled that if a commodity can by some
BELLA PREMIER rational understanding or analysis be brought or

HAPPY HYGIENE
CARE PVT. LTD. related to specific entry in the tax laws, the same
[2018 (17) GSTL cannot be taxed under the residuary entry and what is
603 (Ker.)]
important is to apply the Trade Parlance Test or
Para 15 Common Parlance Test and not to apply the hair
splitting exercise to apply the technical terms.
Back
Classification – Residuary entry covers goods
which are outside main entry!
• Supreme Court in A.R. Thermosets Private

Parle Agro Pvt Ltd
[2019 (20) GSTL Limited’s case (supra) … held … that residuary
238 (Chattis.)]
entry is made to cover only those category of
Para 18 goods which clearly fall outside the ambit of
the main entry…
Back
‘Sale’ vs ‘Works contract’ - Nature of contract
relevant!
• However, it is made clear that if there are two
contracts, namely, purchase of the components of lifts
Thyseenkrupp from a dealer, it would be a contract for sale and
Elevator (I) Pvt.
Ltd. [2019 (24) similarly if a separate contract is entered into for
GSTL 527 (Kar.)]*
installation, that would be contract for labour and
Para 11 service. Thus, the nature of contract is relevant to
determine the transaction whether is a sale simpliciter
or works contract. Back
Classification – Functional character
important!
• The Hon’ble Supreme Court in the case of Atul Glass
Industries (P.) Ltd. … 1986 (25) E.L.T. 473 (S.C.) … has
held that a product is identified by its functional

Castrol India Ltd.
[2018 (16) GSTL
495 (M.P.)] character. It was also held that it is a matter of
common experience that the identity of an article is
Para 22
associated with its primary function and when a
consumer buys an article, he buys it because it
performs a specific function for him. Back
Classification – Cannot be on personal
knowledge but evidence!
• The assessing authority cannot rely upon its own

Perfaty Wanmele understanding of the product or his personal
India Pvt. Ltd.
[2018 (19) GSTL knowledge to determine the nature of product after
448 (All.)]
discarding specific evidence led by the assessee,
Para 23 particularly when no contra evidence is otherwise
brought on record by the Revenue.
Back
Capital goods vs Raw material – Used
multiple times vs used once!
• The basic distinction between “capital goods” and “raw
Meghmani materials” is that the “capital goods” are durable in

Organics Ltd. [2019 nature and the same goods would be used again and
(22) GSTL 504
(Guj.)]* again for the manufacture of goods over a considerable
period of time; whereas “raw materials” would be
Para 14
consumed in the process of manufacturing the final
item.
Back
CG vs Inputs – Form separate classes!
• The capital goods and inputs used in manufacturing

RSPL Ltd. [2018
(19) GSTL 430 process have always been treated differently and
(Guj.)]* distinct treatment have been given under the earlier
Para 19 statutes. …This demarcation itself would not be

artificial, arbitrary or in any manner, discriminatory.
* Maintained by SC
Back
Classification – Ayurvedic vs cosmetics!
• As per law laid down by the Apex Court in the case of

Amrutanjan Ltd. v. CCE, 1995 (77) E.L.T. 500 (S.C.), the

Global Tele Mall
[2018 (18) GSTL only requirement is that the product contain Auyrvedic
227 (MP)]* ingredients. It is not essential that the manufacturing
Para 15 process should follow the formula in any text book and
it was held by the Supreme Court that Amrutanjan is a
Ayurvedic medicine entitled to be classified as such.
CA Pritam Mahure and Associates Back
Liquor – Neither ‘food’ nor ‘food product’!
ESVEEAAR

DISTILLERIES (P.) • Neither the notification nor the items mentioned in
LTD. [2023 (68)
GSTL 25 (A.P.)]* Chapters 1 to 22 spell out clearly that “alcoholic liquor
for human consumption” as food or food product.
Para 21
* GST
Back
Classification – Without ‘prescription’ does
not mean its cosmetics!
• In CCE v. CIENS Laboratories, reported in (2013) 14 SCC
133… the view reiterated in Para 22.2 is extracted
Perfaty Wanmele hereinafter …though a product is sold without a
India Pvt. Ltd.
[2018 (19) GSTL prescription of a medical practitioner, it does not lead
448 (All.)]
to the immediate conclusion that all products that are
Para 13 sold over/across the counter are cosmetics. There are
several products that are sold over the counter and are
yet, medicaments Back
Potato Chips – ‘Snacks’ or ‘Processed
vegetable’!
• Potato is a vegetable, and after going through the
process of slicing, frying and spicing, “Potato Chips”
Pepsico India does not cease to be a vegetable. It is irrelevant as to

Holdings P. Ltd.
[2018 (16) GSTL whether it becomes a snack item or not, but then it
249 (Raj.)]
does not take a snack item outside the entry of
Para 19 ‘Processed Vegetables’. The characteristics of Potato
does not change and merely because by processing
Potato… Back
Cleaning – Detergent is consumed and
property is not passed to contractee!
• The soaps, detergent, chemicals and solvent
used purely for the purposes of cleaning and

VPSSR Facilities
[2018 (18) GSTL which are completely consumed, in the
599 (Del.)]*
process of the execution of the above referred
Para 34 tasks, cannot by any stretch of imagination be
said to goods in which property could pass to
* DVAT Act
the CAcontractee.
Pritam Mahure and Associates
Back
PLACE OF SUPPLY!
Back
Export of goods – Taking out of India is
enough!
• The Hon’ble Apex Court held that “taking out to a place outside
India” would also mean a place beyond territorial waters, i.e. high
Atin Krishna [2019
(25) GSTL 390 seas hence in the context of Section 2(5) of IGST Act, to constitute
(All.)] an “export” mere taking out of India, is enough… Export of goods
is a zero-rated supply and a person making zero-rated supplies can
Para 20/21
claim refund of unutilised ITC as provided in Section 16(1) and
Section 16(3) of the IGST Act,
Back
Advance Ruling can be given on ‘export’
transaction as well!
• … the Parliament in its wisdom has decided to mandate such a
provision as in clause (e) of Section 97(2), whereby the applicant is
Southerland empowered to seek advance ruling even on the said larger issue of
Mortgage Services
determination of liability to pay tax on goods or services or both
Inc. 2020 (35) GSTL
40 (Ker.)] and in view of such a scenario, the Advance Ruling Authority is
obliged to entertain such plea … it goes without saying that the
Para 22/23 executive authorities concerned including the taxation authorities
will have to take the correct perspective and in accordance with
the legislative policy framed ... Back
ST not leviable if services rendered and
consumed beyond India!
• The provisions of the Finance Act, 1994, which is an Act of the

SAL Steels Ltd
2020 (37) GSTL Parliament for levy of service tax, do not permit nor empower the
0003 (Guj.)]* Central Government to collect service tax on such extraterritorial
events, and the services which are rendered and consumed beyond
Para 25
the land mass of the country. …

Back
TIME OF SUPPLY!
Back
Premium paid prior to increase in tax rate –
No additional tax payable!
• The Learned Tribunal, by a detailed judgment and
order [2009 (13) S.T.R. 259 (Tri. - Mum.)], and
Bajaj Allianz Gen. considering the fact that the entire premium was paid

Insurance Co. Ltd.
[2022 (64) GSTL prior to 10-9-2004 i.e. before the change in the rate of
513 (S.C.)]*
tax, has rightly observed and held that the assessee is
Para 2 not liable to pay the enhanced rate of tax.
* Service Tax • We are in complete agreement with the view taken by

the Tribunal. Back
Accounting and Tax – They are different!
• AS 7 thus provides for a detailed methodology for the
Firm Foundations reporting … basis of such recognition and reporting …is

& Housing Pvt. Ltd. entirely different and distinct from the scope, object
[2018 (16) GSTL
209 (Mad.)] and application of the Point of Taxation Rules that
seeks to set out a methodology for determination of
Para 15
when the service was rendered and consequently when
the receipt of income from such rendition be taxed.
ACCOUNTS!
Back
Onus to prove ‘supply’ is on Authorities!
• The Chartered Accountants have certified that the

TVL Madura transactions in question were executed by the assessee and
Coats (P) Ltd
that they had been reversed in their books of account. In
[2020 (42) GSTL
21 (Mad.)] other words, the transactions became unfructified sales. …
the petitioners deny the sales in question, they cannot do
Para 14/15 anything more. If the assessing authority is of the view that
this is a false statement, the onus is on the authority.
Back
Goods not recorded in regular books implies
hiding!
• In the context of the Act based on a scheme for self-
assessment, the word ‘secreted’ plainly implies to be
Rajeev Traders
[2019 (29) GSTL hidden or not disclosed to the Revenue authorities for
0009 (All.)]
the purposes of making a fair self-assessment. Once the
dealer does not record the goods in his regular books
Para 15
of account, a presumption arises that he does not
intend to disclose the same …
Back
‘Discrepancy’ in accounts does not mean
‘concealment’!
• Even otherwise, in face of the admission, as to the genuineness

and existence of the tax invoice and the e-way bills, mere
Jai Maa
Jwalamukhi [2021 existence of some discrepancies may not have ever led the
(53) GSTL 257 revenue authority to the conclusion that tax had been evaded
(All.)]
or the transaction had not been disclosed. To hold that there
was discrepancy in the account is different and lighter charge
Para 11
than to hold that the assessee had not disclosed or concealed
part of it’s turnover.
Back
AGREEMENTS/
CONTRACTS!
Back
Myopic view of a transaction is avoidable!
• … The said transaction cannot be viewed in a myopic

sense by truncating or excluding the role or action of a
Tata Motors Ltd
[CA No. dealer under the warranty and viewing it only from the
1822/2007]* perspective of a transaction simpliciter between
Para 30 manufacturer and a dealer. Such an approach is not only

skewed from a commercial perspective but also
* VAT jurisprudentially or in the legal sense.
Back
Apply substance over form!
• … the nomenclature of any contract, or document, is not

Northern decisive of its nature. An overall reading of the
Operating System
[2022-TIOL-48-SC- document, and its effect, is to be seen by the courts.
ST-LB]*
[Titaghur Paper Mills Co. Ltd 1985 Supp SCC 280]
Para 47/48/ 51/ 52 • This court has consistently applied one test: substance
over form, ...
Back
Contract – Separate activities, separate tax
treatment!
• … the Board’s Circular No. B1/6/2005-TRU
dated 27-7-05 is to the effect that - ... If the
Shilpa

Construction Pvt contract recognizes the two activities as
Ltd [2010 (19) STR
830 (Tri. Ahmd.)]* separate activities, even though the
Para 7 construction of the road is in connection with

the commercial complex, the benefit has to be
* Service Tax
allowed.
Back
Inclusive of tax does not mean tax is
included!
• …services provided by the petitioner to the respondent

Metrro Waste under the said work order are exempted … The rate was all
Handling Pvt Ltd
inclusive including service tax, labour cess…It is manifest that
[2020 (38) GSTL
438 (Del.)] there is no stipulation in the agreement that the charges are
in any manner linked with the service tax. In fact, there is
Para 4/ 15 nothing in the contract that even specifies what rate of the
service tax is allegedly payable. …
Back
Indirect Tax – Can be recovered by seller from
buyer, by agreement!
• In Rashtriya Ispat Nigam Limited (supra), the Apex Court held that
P K Chandradas the provisions concerning service tax are relevant only between the
[2019 (27) GSTL 25
(Ker.)] assessee under the statute and the tax authorities. ... The Apex
Court held that in the same manner a seller who is a sales tax
Para 12 assessee can recover the tax from buyer, a service tax assessee can
recover the service tax from recipient of service, by agreement.
Back
Tax inclusive contracts – Not entitled to
change price!
• …when the rate contract was inclusive of the
BIPSON SURGICAL duties/taxes/levies and there is no clause for

(INDIA) PVT. LTD. variation/price revision in case of revision of any tax,
[2018 (18) GSTL
795 (Guj.)] the petitioner shall not be entitled to change the rate
contract/revision of price on any ground which
Para 9.3
otherwise is not permissible as per the terms and
conditions of the tender document…
Back
Tax – Reimbursable if introduced subsequent
to bid!
• … the Supreme Court in Numaligarh Refinery Ltd.
(supra) clearly held that … since the duty came into
existence subsequently, the liability upon the bidders

Speedcrafts LTD.
[2018 (18) GSTL
385 (Del.)] would not include the said duty… The petitioner was
liable to the extent of the obligations which existed on
Para 12/13
the Bid date but not beyond that. As service tax was
imposed subsequently, the same would be
reimbursable. Back
REVENUE-NEUTRALITY!
Back
Revenue neutrality is irrelevant!
• As regards the question of revenue neutrality is

Northern concerned, … That a particular rate of tax- or no tax, is
Operating System
[2022-TIOL-48-SC- payable, or that if and when liability arises, the
ST-LB]*
assessee, can through a certain existing arrangement,
Para 59 claim the whole or part of the duty as refund, is an
irrelevant detail.
* Service Tax judgment Back
E-WAY BILLS!
Back
Sec. 129 – Determination only u/s 73/74!
• The question that arises here is that what happened when the
owner of the goods or the person does not volunteer to pay the

Bharti Airtel Ltd penalty as prescribed under clauses (a), (b), (c) of Section 129(1) of
[2023 (67) GSTL
260 (All.)]* the Act. In the said case, the department is well equipped to
initiate proceedings by taking recourse to Sections 73, 74, 75 of
Para 27/28 the Act read with section 122 …there is no provision under section
129 for determination of tax due, which can be done only by
* GST taking recourse to the provisions of Section 73 or 74
Back
Non-extension of e-way bill does not mean
evasion!
Satyam Shivam
Papers Pvt Ltd • On account of non-extension of the validity of the
[2022 (57) GSTL e-way bill by petitioner or the auto trolley driver,
97 (SC)
no presumption can be drawn that there was an
Para 4 intention to evade tax.
Back
‘Detention’ – Goods cannot be detained in
case of bona fide classification dispute!
• Indeed, emphatic is the enunciation of law in Rams*

N V K Mohammed
… [2019 (20) GSTL that the process of detention of the goods cannot be
708 (Ker.)] resorted to when the dispute is bona fide, especially,
Para 36 concerning the exigibility of tax and, more particularly,

the rate of that tax.
* Rams v. STO [1993 (91)
STC 216] Back
E-sugam – Bad weather is reasonable cause!
• …the delay in transshipment occurred as the
goods arrived belatedly due to bad weather,

Bhavani Entp.
[2018 (15) GSTL which was beyond assessee’s control…It is not
698 (Kar.)]*
a case in which goods were being transported
Para 7/8 without an e-sugam. The assessee had
obtained e-sugam but it had expired. The
* Karnataka VAT
cause shown is reasonable…

Back
REFUND!
Back
Export – Refund cannot be time-barred!
• the services rendered by the assessee satisfy

Bellatrix all conditions …and the services provided by it

Consultancy
Services [2022 (67) are export services, it is entitled for refund of
GSTL 59 (Kar.)]*
the tax. In view of authority in the case of Shiv
Para 11
Shanker Dal Mills, the refund cannot be
* GST denied on the ground of limitation.
Back
Refund – ‘Online’ filing to be considered than
‘physical’ application date!
• …the petitioner has filed the application on the
Chromotolab and common portal within time, but the documents to be

Biotech Solutions physically furnished along with the application was
[2022 (67) GSTL
160 (Guj.)]* physically submitted on 17-10-2019…The date of
application filed on the portal has to be treated as
Para 5.8/5.9
one to reckon whether it was filed within two years as
* GST contemplated under Section 54 of the CGST Act.
Back
Refund is statutory prescription!
• Refund is a matter of a statutory prescription.

VKC Footsteps • A claim to refund is governed by statute. There is no
India Pvt Ltd
[2021 (52) GSTL constitutional entitlement to seek a refund.
513 (SC)] • The Court while interpreting the provisions of Section 54(3)
must give effect to its plain terms. The Court cannot redraw
Para 58/ 70/ 81 legislative boundaries on the basis of an ideal which the law
was intended to pursue.
Back
‘Any person’ can claim refund under
Section 54!
• The statutory scheme for refund under the CGST and SGST Acts, permits
any entity to seek a refund of taxes or other amounts paid under the
Platinum Holdings
Pvt. Ltd. provisions of the Act, subject to satisfaction that is it so entitled, and that
[2022 (58) GSTL 3 there is no double claim as against the same amount.
(Mad.)]
• The provisions of Section 54 of the CGST Act, providing for a refund, apply
to any person who claims such refund and who makes an application for the
Para 59
grant of the same. The language of the provision is clear and does not
contain, or admit of any restriction in its operation.
Back
Taxes should not be exported!
• Should we deny the benefit simply for this mistake when

the cardinal rule is that taxes should not be exported?
TMA International
Pvt Ltd 2020 (35) The concept of zero-rated exports envisaged under GST
GSTL 22 (Del.)] is designed to achieve this objective. …
Para 14 • We are thus of the view that taxpayers like the

Petitioners should not be denied the substantive
benefit of the IGST paid by them on exports
Back
Refund - Denial will cause great hardship to
exporters!
• The entire concept of refund of ITC relating to zero-rated supply
would be obliterated in case the respondents are permitted to put
Pitambara Books any limitation and condition that takes away petitioner’s right to
Pvt Ltd 2020 (35)
GSTL 196 (Del.)] claim refund of all the taxes paid on the domestic purchases used
for the purpose of zero-rated supplies. The incentive given to the
Para 12 exporters would lose its meaning and this would cause grave
hardship to the exporters who are earning valuable foreign
exchange for the country
Back
Substantive right cannot be defeated by
procedural lapse!
• The Learned Revenue authorities could not deny the adjustment

Hwashin entry of restoration of Cenvat credit in the present case irrespective
Automotive I. Pvt.
of limitation. Merely because the Assessee laid its claim of refund by
Ltd 2021 (44) GSTL
52 (Mad.)]* his moving an application in prescribed Form No. R under Rule 127,
being a procedural requirement of the law, the substantive right of
Para 13 Assessee cannot be defeated by the Revenue authorities except at
the peril of violating Article 265 of the Constitution of India.
Back
Tax must be collected in terms of law else
they are refundable!
• Article 265 of the Constitution of India states that ‘no tax shall be levied or
collected except by authority of law’.
• In Corporation Bank v. Saraswati Abharansala [2009 (1) SCC 540 = 2010 (18)
Vasudha
S.T.R. 513 (S.C.)], the Supreme Court interpreted this constitutional provision
Bommireddy 2020
(35) GSTL 52 (Tel.)] and held that all acts relating to the imposition of tax providing, inter alia,
for the point at which the tax is to be collected, the rate of tax as also its
Para 35/36 recovery must be carried out strictly in accordance with law. In that case,
the assessee had paid excess amount of tax to the State, which the State had
refused to refund and the Supreme Court held that the Writ Petition to
recover the excess amount paid by the assessee, was maintainable. Back
Shipping bill - Itself is a ‘refund’ application!
• Rule 96 is relevant for two purposes. The

Amit Cotton shipping bill that the exporter may file is
Industries [2019
(29) GSTL 200 deemed to be an application for refund of the
(Guj.)]
integrated tax paid on the goods exported out
Para 30 of India and the claim for refund can be
withheld only in … contingencies …
Back
Refund – Time limit not applicable if tax was
not leviable!
• …amount in question was never payable as there was
no levy at all, the question of denying the refund of part
National Inst. Of payment did not arise and that the general principal of
Public Policy and
Finance [2019 (20) limitation will be applicable from the date of discovery
GSTL 330 (Del.)]*
of mistaken payment In the present case, levy never
Para 7 applied - a fact conceded by no less than the authority
of CBEC…he appellant shall be entitled to refund of
entire amount with proportionate interest. Back
Tax paid by mistake – Not barred by
limitation!
• …when service tax is paid by mistake a claim

3E Infotech [2018
(18) GSTL 410 for refund cannot be barred by limitation… if
(Mad.)]
the Revenue is allowed to keep the excess
Para 13/14 service tax paid, it would not be proper, and
against the tenets of Article 265
Back
SECTION 73/ 74!
Back
Liability – Only after assessment
• If any liability is to be fixed with respect to payment of tax, it has

to first start with issuance of a show cause notice under Section 73

Gopi Enterprises or Section 74 of the Act as the case may be. Thereafter, full-
[2023 (68) GSTL
389 (Guj.)]* fledged assessment proceedings are to be undertaken wherein the
assessee is given an opportunity of hearing and thereafter, the
Para 5 final order is passed. In the case on hand, it appears that although,
the subject matter was unblocking of the ITC credit yet, the final
* GST liability has also been fixed.
Back
‘SCN’ – Cannot be negligently issued!
• show cause notice under Section 73 which was issued
to the petitioner; in the column date, time and venue
of personal hearing, it was mentioned “NA” which

Om Prakash Store
[2022 (67) GSTL
269 (Jhar.)]* clearly goes to show that …was negligently issued …It
was only when his account was attached; petitioner’s-
Para 15/16
bank informed him about the notice…statutory
* GST
requirements …under Sections 73 and 75 …has not
been followed Back
ITC – After SCN, first rectify mis-match and
submit supporting documents!
• After receipt of the show cause notice, if at all the
Mahendra Feeds petitioner wants to rectify the mismatch between the

and Foods [2022 petitioner and the supplying dealer, the supporting
(66) GSTL 328
(Mad.)]* documents to substantiate that the output tax had
been paid by the supplying dealer at their end should
Para 9
have been procured and filed along with the reply
* GST
submitted by the petitioner, which they failed to do
Back
DRC-01A is just an intimation!
• … the notice of intimation in the FORM GST DRC-01A issued

CERA
Sanitaryware Ltd under Section 74(5) …. It is just an intimation. It is up to the
[2020 (40) GSTL writ applicant whether to pay attention to such intimation or
439 (Guj.)]
not. If the writ applicant deems fit to ignore it, the same may
entail the consequence of further show cause notice under
Para 6
Section 74(1) of the Act, 2017
Back
‘Silent’ SCN violets principles of natural
justice!
Sahibabad • For the sole reason that the order rejecting the
Printers [2021 claim is based upon a silent show cause notice, I
(51) GSTL 301
(All.)] have no hesitation in holding that the principles of
natural justice have been violated while
Para 9
adjudication of refund claim of the petitioner.
Back
Sec. 74 gives ‘option’ to avoid SCN!
• The scheme of making a payment of tax together with

interest and 15% of the amount as penalty envisaged under
Muhammed K…
[2020 (43) GSTL Section 74 is for the purposes of enabling an assessee to
382 (Ker.)] avoid the show cause notice contemplated under the said
provision. … When the scheme under Section 74 for avoiding
Para 3
a show cause notice is one that is optional to an assessee,
the assessee has either to opt for it or look away from it.
Back
Non-payment of tax does not mean
suppression/ mis-statement!
• Until and unless it is indicated or alleged in the show cause notice
there was wilful misstatement or suppression of fact on the part of
Kultar Exports respondent-assessee, non-payment of tax would not fall within the
2020 (36) GSTL
0208 (Del.)]* definition of ‘wilful mis-statement’ or ‘suppression of fact’, so as to
attract the extended period of limitation.. In fact, initial burden is
Para 17/18 on the revenue to establish or prove that ingredients prescribed …
are present. In the absence of this fact, invoking of extended period
* Service Tax judgment of limitation would be impermissible.

Back
Extended period – Not invokable if
information already disclosed!
• …to invoke the extended period of limitation. He must have
reasons to do so. There must be omission or failure on the part of
SREI Equipments

Finance LTD. [2018 the assessee to disclose wholly or truly all materials for verification
(17) GSTL 603 … petitioners had disclosed all materials required for verification
(Ker.)]
… for the period from 2007 to 2013 … and for a period upto 2015
…The petitioners are not guilty of omitting or failing to disclose
Para 12
…The impugned show cause notice is, therefore, without
jurisdiction.
Back
Extended period not invokable if already
audited!
• … there is nothing …to indicate as to on what
basis the adjudicating authority invoked the
Himadri Speciality

Chemical Ltd [2022 extended period of limitation. More so, when
(66) GSTL 264
(Cal.)]* the assessee had disclosed all the materials in
Para 14 their returns and the assessee was also

subjected to audit earlier and there was no
* ST
objection raised by the audit department…
Back
Extended period – Not invokable if two
views!
• … when there is scope for doubt in the mind of the
assessee on a particular issue, the longer period under

C Kamalakannan
[2018 (18) GSTL the proviso to Section 11A of the Central Excise Act,
589 (Mad.)]* 1944 cannot be invoked…there were two views on the
Para 14/ 16 issue within the Department itself … Thus, in our view,
the Tribunal rightly held that the extended period of
limitation could not have been invoked…
Back
Suppression – Non-disclosure of details could
be treated as suppression!
• …assessee was required to state and declare the value
McKinsey & of taxable services … The appellant was required to first

Company Inc. declare the gross amount received from the client and
[2019 (20) GSTL
198 (Bom.)] claim abatement on the basis of the documents… . The
argument was that the appellant bonafidely believed…
Para 25
will be considered as OPE. This argument is rightly
rejected by CESTAT.
Back
Omission to pay tax – Does not mean its
fraud!
• It has been repeatedly emphasized by the Supreme Court in
Uniworth Textiles Ltd. v. Commissioner of Central Excise, 2012 (9)
SCC 753 = 2013 (288) E.L.T. 161 (S.C.), Pushpam Pharmaceuticals Co.
Team HR Services
Ltd. [2019 (25) v. Commissioner of CE, 1995 Supp. (3) SCC 462 = 1995 (78) E.L.T. 401
GSTL 207 (Del.)] (S.C.), and Commissioner of Central Excise v. Chemiphar Drugs, 1989
(2) SCC 127 = 1989 (40) E.L.T. 276 (S.C.) that mere omission to fulfil
Para 6
one’s tax liability cannot automatically lead the authorities to
conclude that the assessee had practiced fraud or
misrepresentation. Back
Opportunity of hearing must be granted!
• Section 75(4) … reads as follows : “An opportunity of hearing

shall be granted where a request is received in writing from
M. R Hightech…
[2020 (41) GSTL the person chargeable with tax or penalty, or where any
29 (Mad.)] adverse decision is contemplated against such person.” … On
the ground of violation of statutory mandate under Section
Para 4
75(4) of Tamil Nadu Goods and Services Tax Act, 2017, the
impugned orders have to be necessarily quashed.
Back
Assessment must precede demand!
• Thus, from perusal of Section 73A(5) of the Act, it is

evident that the assessment must precede the demand.
Silverline Estates
2021 (46) GSTL After taking note of the provisions of Section 73 of the
236 (Kar.)]* Act, the Learned Single Judge of this Court has held that
Para 6 the power to create a demand under Section 87 of the

Act can be exercised only after adjudication namely on
* Service Tax judgment assessment of the amount.
Back
Section 122 and 74 are separate!
• While proceedings under Section 122 are for the
purposes of imposition of penalty on an assessee, who
Radhakrishna has contravened the provisions of the Act, the
Textiles 2021 (45)
GSTL 130 (Ker.)] proceedings under Section 74 of the Act are with a view
to recover unpaid tax together with interest thereon, in
Para 3
cases where the non-payment of tax is on account of a
suppression or wilful misstatement occasioned by the
assessee. Back
Pre-determination of issue is not permissible!
• The impugned proceedings of the second respondent even though

carries the nomenclature of a show cause notice, in effect, it is
KC
Purushothaman directing the petitioner to pay the penalty along with GST within a
2020 (34) GSTL period of 7 days, failing which, the petitioner will be removed from
601 (Mad.)]
service… The second respondent has clearly predetermined the
entire issue and has directed the petitioner to pay the penalty along
Para 8/ 9
with GST, without conducting any enquiry. In the result, the
impugned proceedings … quashed.
Back
SCN – Gives just 7 days!
• the order is erroneous because in the show cause notice only 7

days was given to reply to the notice and on the 8th day the

Sheetal Dilip Jain. impugned order came to be passed. Therefore, the question of not
[2022 (67) GSTL 11
(Bom.)]* paying within 30 days of the issue of the notice will not arise…such
orders without application of mind are being passed contrary to
Para 4/5 the basic provisions of the Act …the authorities must be mindful of
the grave prejudice that is caused to the assessees on account of
*GST such patently illegal orders…
Back
Bona fide belief – Must be based on facts/
law!
• The bona fide belief that one is not liable to pay the tax
Responsive has to be based on some facts on record which led to

Industries Ltd. the belief. … It is not the Appellant’s case that the belief
[2019 (26) GSTL
457 (Bom.)] based on a ruling of the some authority… A mere
statement to the effect that the Appellant was under a
Para 9
bona fide belief of non liability of paying tax cannot be
accepted in the face of clear provision of law.
Back
Recovery – Determination is a pre-requisite!
• … ‘determination’ of the excess credit by way of the procedure set

out in Section 73 or 74, as the case may be is a pre-requisite for the
Jayachandran
Alloys Pvt. Ltd. recovery thereof. Sections 73 and 74 deal with assessments and as
[2019 (25) GSTL such it is clear and unambiguous that such recovery can only be
321 (Mad.)]
initiated once the amount of excess credit has been quantified and
determined in an assessment…The exceptions to this rule of
Para 38
assessment are only those cases where the assessee is a habitual
offender…
Back
Recovery - No recovery from purchaser if
transfer of property bonafide !
• Section 34 of the Act shall be applicable only in a case
where there is a transfer of immovable property
belonging to the original assessee, during the

Radico Khetan Ltd
[2022 (65) GSTL
258 (SC)]* pendency of any proceedings under the Act with the
intention of defrauding any such tax or other dues. As
Para 5
per proviso to Section 34, nothing in Section 34 shall
* UP Trade Tax Act, 1948

impair the rights of a transferee in good faith and for
consideration. Back
BEST JUDGMENT
ASSESSMENT!
Back
Best judgment – Enable Officer make
addition!
• The Tribunal while sustaining the taxable turnover with respect to
the suppression detected and the value estimated, deleted the
MALANADU
entire addition on the ground that the suppression detected and

CEMENTS &
ALLIED PRODUCTS the estimation made was based on public records, while there was
(P) LTD. [2018 (18) no detection of any other transaction effected by the assessee. The
GSTL 217 (Ker.)]
finding would be contrary to the principles of estimation on
Para 3 detection of suppression. The principles of best judgment enable

the Assessing Officer to protect the interest of the Revenue and
make reasonable estimation … Back
If continued absence - Not ex-parte Order!
• … order cannot be termed as ex parte simply because

the petitioner was not present or that no legal or

Allied Transport
[2018 (13) GSTL 60
(Bom.)]* factual submission could be canvassed … This is a clear
case where the authorities called upon the petitioner
Para 14
to remain present and repeatedly … opportunities
* Service Tax
were given but they have not been availed of…
Back
PENALTY!
Back
Interpretation cases – No penalty!
• 25. As far as the penalty is concerned, we are of the

International considered view that there was no warrant for the

Merch. Co. LLC
[2022 (67) GSTL imposition of the penalty as the dispute in the present
129 (S.C.)]*
case essentially turned on the interpretation of the
Para 25 statutory provisions and their inter-play with the
* Service Tax
circular issued by the CBEC.
Back
Penalty – Crucial words ‘to evade tax’!
• Thus, the crucial words in Section 78(1) of the Finance Act, 1994 are
‘by reason of fraud or collusion’ or ‘willful misstatement’ or
Force I Guarding
Services Pvt Ltd ‘suppression of facts’. These words should be read in conjunction
2019 (26) GSTL with ‘the intent to evade payment of service tax’. However, there is
325 (Mad.)]
no finding rendered by the Adjudicating Authority stating that there
was either fraud or collusion or willful misstatement or suppression
Para 8
of facts or contravention of the provisions of Chapter V with an
intent to evade payment of service tax.
Back
Penalty – Only if there is fraud/ collusion!
• … upon being pointed out during the audit, the assessee has
promptly made the payment of tax with interest and

Lalit Ashok [2022 requested not to issue any show cause notice. … In order to
(66) GSTL 314
(Kar.)]* reverse the decision of the CESTAT, nothing is pointed out
from the record to demonstrate that there was either fraud
Para 22/23 or collusion or willful misstatement or suppression of facts
or contravention of any of the provisions of the Act and
* GST
Rules Back
Penalty – Only in specified case (say fraud)!
• … the Tribunal rightly found that the imposition of
Maharashtra State penalty on the respondent was not justified as penalty

Seed Certification could be levied under Section 78 of the Act, only if either
Agency 2019 (27)
GSTL 678 (Bom.)] of the five ingredients in the proviso to sub-section (1)
of Section 73 of the Act, which are also the ingredients
Para 3
mentioned in Section 78 of the Act for imposition of
penalty, were satisfied.
Back
Penalty – Is not automatic!
• … extended period is not invocable unless
show cause notice puts the assessee to notice
National Co-

operative Bank specifically as to various commissions/
Ltd. [2018 (15)
GSTL 202 (Kar.)]* omissions stated in the proviso to Section
Para 18/19 73(1) of the Act had been committed…It is well

settled legal principle that penalty is not
* Service Tax
automatic…
Back
Penalty – Not leviable if no suppression/
fraud!
• …in the balance sheet published in June, 2013, the
respondent Company has shown the liability of the
service tax payable by them and in fact, the same was

Tirupati Sarjan Ltd
[2018 (18) GSTL
216 (Guj.)]* paid in January, 2014 along with interest…the case
does not fall in any of the clauses mentioned under
Para 3/4
Section 78 of the Finance Act, 1994. Therefore, the
Learned Tribunal has rightly quashed and set aside the
penalty levied… Back
Government entity – No evasion of tax!
• CSIDC is an entity under the control of the Government of

Chhattisgarh. It does not belong to an individual who would
CHHATTISGARH

SIDC LTD. [2018 evade tax to corner profit…bona fide impression that being an
(17) GSTL 593 entity under the control of Government it was not liable to pay
(Chh.)]
service tax appears to be reasonable explanation, therefore, mere
non-registration under Section 65 or non-payment of service tax
Para 17
on the maintenance charges collected from industries would not
amount to wilful supression …
Back
Penalty can be recovered by Authorities only
after issuing notice!
• Whether penalty at 15% should be paid or not is for the

D Rama Kotiah assessee to decide. While he would, undoubtedly, run the risk
and Co. [2020
of being subjected to penalty at 100% of the tax specified, the
(38) GSTL 181
(Telan.)] power conferred on the assessing authority to recover
penalty, equivalent to the tax specified in the notice, is only
Para 5 after a notice is issued calling upon the petitioner to show
cause why penalty should not be imposed on him.
Back
Penalty – Can be reduced if paid before final
assessment!
• In Chennai Textile Chemicals Private Ltd…. [(2002) 125 STC 107], …
this Court held … “21. ... Even though in a given case …, the

Ergomaxx (India) quantum of turnover suppressed or the tax sought to be avoided
Pvt. Ltd. [2018 (15)
GSTL 672 (Mad.)]* also, at times, may be one and the same, if the particular assessee,
at the time of final assessment, found to have otherwise paid any
Para 21 amount already before such final assessment, sufficient to go to
reduce the tax liability ultimately determined, the imposition of
* TN VAT penalty to that extent is reduced...”
Back
COMMUNICATION!
Back
Communication - Through portal or email
is valid!
• ... I note that as per Section 169(c) and (d) of the
GST Act the service of any communication to the
K U Niyas [2020
(41) GSTL 15 e-mail address provided by an assessee at the
(Ker.)] time of registration, as also by making available
Para 3 the communication in the common portal of the

department, is to be treated as an effective
communication under the statute.
Back
Service of order to ‘driver’ is invalid!
• … service on the driver would not fall within any of

Singh Traders
[2021 (51) GSTL the category specified from the Clause (a) to (f) of
298 (All.)] Section 169(1) of the Act. Thus, I have no
Para 9 hesitation in holding that the order impugned in

the present writ petition is wholly arbitrary,
Back
Specified mode – If mentioned, must be
followed!
• If the order is sent by a special messenger as asserted

Real Time by the department, it is baffling why there should be an
Technology 2019
(29) GSTL 238 endorsement “Register with A/D” … When a particular
(Gau.)]
mode for service is prescribed by the author of the
Para 12/13 Order-in-Original, we are of the considered opinion that
such mode has to be complied with…
Back
‘Communicated’ – Means brought to
knowledge!
• … Section 107(1) of the Act provides for a period of limitation of

three months from the date of communication of the order. … the
S/S Patel Hardware
[2019 (21) GSTL phrase “communicated to such person” appearing in Section 107(1)
145 (All.)]* of the Act command a construction that would imply that the order
be necessarily brought to the knowledge of the person who is
Para 7/8
likely to be aggrieved. Unless such construction is offered, the right
of appeal would itself be lost …
Back
Notice – Affixation last resort!
• The notice under the Act is required to be served in
accordance with the provisions of Section 169… the
Kashi Bartan words “if none of the modes is practicable” are
Bhandar [2018
(19) GSTL 403 relevant and important. The use of the aforesaid words
(All.)]*
clearly indicates that it is only after the authorities are
Para 7/8 satisfied that all earlier methods are not practicable for
service of notice that resort can be taken for service of
notice by affixation. Back
ADJUDICATION!
Back
Right to Know – Reasons must be specified!
• …order …, must disclose the reasons … Right to know

ORISSA the reasons behind an administrative order having civil

STEVEDORES LTD.
[2022 (67) GSTL consequences is a well embedded principle forming
284 (Ori.)]*
part of doctrine of fair play which runs like a thread
Para 7 through the warp and weft of the fabric of our
* GST
Constitutional order made up by Articles 14 and 21
Back
‘May’ – Is a discretion but Order must
indicate reason!
• “the word ‘may’ only refers to the discretion to reject

and not to blatantly violate the principles of natural

B C Mohankumar
[2023 (68) GSTL
385 (Mad.)]* justice. If the assessing authority is inclined to reject
the application, which he is entitled to, he must assign
Para 7
reasons for such objection and adhere to proper
* GST
procedure, including due process
Back
Appellate Authority duty bound to consider
grounds raised!
• Appellate Authority has literally considered only the factual
aspects … However, none of these paragraphs … dealing
Nutan Ispat and
Power Pvt Ltd with the specific objections and grounds that the Petitioner
[2020 (37) GSTL has raised … It is by now a well settled position of law that
285 (Chatt.)]
the Appellate Authority while deciding the Appeal is duty
bound to consider the grounds of challenge. The Appellate
Para 6/ 7
Authority is also required to pass a reasoned and speaking
order considering and dealing with those grounds.
Back
Order – Fresh reasons cannot be added later!
• …in Commissioner of Police v. Gordhandas Bhanji, AIR 1952 SC 16.
“Public orders, publicly made, in exercise of a statutory authority
cannot be construed in the light of explanations subsequently
F S Entp. 2020 (32) given by the officer making the order of what he meant, or of what
GSTL 321 (Guj.)] was in his mind, or what he intended to do. Public orders made by
public authorities are meant to have public effect and are intended
Para 13
to affect the acting and conduct of those to whom they are
addressed and must be construed objectively with reference to the
language used in the order itself. Orders are not like old wine
becoming better as they grow older.” Back
Adjudication– Must record findings of fact!
• the Adjudicating Authority is the First Authority,
Bata India Ltd who will record the findings of fact. Therefore,
[2019 (24) GSTL
326 (Mad.)]* before the legal position is applied, a thorough
exposition of the facts needs to be done. Then,
Para 22
law is to be applied to the facts of the case and
not vice versa.
Back
Order – Authority must record reasons!
• ... it may be apposite to refer to the decision of the Supreme Court

in Kranti Associates (P) Ltd. v. Masood Ahmed Khan, (2010) 9 SCC
India Logistics and
Crago Movers 496 = 2011 (273) E.L.T. 345 (S.C.), wherein the Court in the context
2019 (31) GSTL of necessity to give reasons, has held thus : … (b) A quasi-judicial
0003 (Guj.)]
authority must record reasons in support of its conclusions… (f)
Reasons have virtually become as indispensable a component of a
Para 16
decision-making process as observing principles of natural justice by
judicial, quasi-judicial and even by administrative bodies.
Back
Adjudication process - Cannot be mere farce!
• …Commissioner …, Thane holds that … freight is a taxable service…
On the other hand the Commissioner…, Mumbai (East) … holds that
Cargocare Logistics the freight charges are an exempted .... such contrary orders, only
(I) Pvt Ltd 2019
seems to suggest that the entire adjudication proceedings are a
(30) GSTL 0465
(Bom.)] mere farce. The attitude of the Revenue even at the level of the
Commissioner is that the demand has to be confirmed and the relief
Para 3/4 if any, the party has to obtain from Appellate Authorities. This
attitude brings to a naught to claim of the State that it is business
friendly. Back
Authorities - To have consistent view!
• … appellant, submits that the first two show cause

notices are inconsistent with the third. Furthermore,
Vivek Entp. 2019
(29) GSTL 619 these show cause notices are inconsistent with the one
(Cal.)] for the self-same transaction for the earlier years…
Para 5/10 adjudicating authority shall not permit the respondents

to run a case inconsistent with the earlier show cause
notice…
Back
Precedent – Earlier Order to be followed!
• In absence of difference in relevant facts or applicable legal

provisions of development of law at the hands of higher authority
Viacom 18 Media or Court, the respondent No. 2 could not have taken a decision
Pvt. Ltd. [2019 (22)
GSTL 338 (Bom.)]* different from what the Deputy Commissioner … had done. The
principle of administrative and judicial hierarchy and the
Para 7 requirement of following binding proceedings even by
Departmental Authority… Kamlakshi Finance Corporation Ltd. -
1991 (55) E.L.T. 433 (S.C.)
Back
Precedent – STO cannot pass contrary order
than Commissioner!
• ...the Bombay High Court ... in … Kulko Engineering Works Limited …
(1980) 46 STC 454 .. observed that … it is not open to a Sales Tax
Godrej Consumer
Product Ltd. [2019 Officer in another proceeding …place his own interpretation …
(20) GSTL 16 contrary to or different from the interpretation placed by the
(Guj.)]
Commissioner… if a question has been decided on certain facts, and
in another proceeding identical facts arises, the Sales Tax Officer
Para 9
cannot take a different view from what the Commissioner had
taken.
Back
Adjudication – Reasonable time is flexible!
• The larger public interest requires that the Revenue

Sanghvi and its officials adjudicate the show cause notices

Reconditioners
Pvt. Ltd. [2018 (12) expeditiously and within a reasonable time. The term
GSTL 290 (Bom.)]*
‘reasonable time’ is flexible enough and would depend
Para 14 upon the facts and circumstances of each case. There is
* Customs Act
no rigidity or inflexibility.
Back
Officer – Cannot again work on same issue in
different capacity!
• If an officer passed an order in a capacity on an issue,
he must eschew himself from sitting on same issue in
different capacity. Quasi-judicial authority should also

Mohammed Bilal
[2018 (16) GSTL
549 (Ker.)] be free from all kind of bias and prejudice while acting
as an adjudicatory authority. Pre-disposed mind itself
Para 4
is sufficient to hold that the decision-making process
is erred as the author of the order already directed the
petitioner Back
APPEAL!
Back
File appeal within time!
• The claim on account of impersonal machinery and

Living Media
India Ltd [2012 inherited bureaucratic methodology of making
(277) ELT (289 several notes cannot be accepted in view of the
(SC))]
modern technologies being used and available.
Para 12 The law of limitation undoubtedly binds
everybody including the Government.
* Refer Vishnu Aroma [2021
(50) GSTL 337 (S.C.)]
Back
Appeal – Delay cannot be condoned beyond
specified period!
V P Khader [2019
(25) GSTL 209 • …Commissioner and the Tribunal being creatures of
(Ker.)] statute could not have condoned such delay beyond the
Para 38 period provided for condonation.
Back
Remedy of law – Cannot aggravate the
situation!
• If any liability is to be fixed with respect to payment of tax, it has
to first start with issuance of a show cause notice under Section 73

Tansi Fabrication or Section 74 of the Act as the case may be. Thereafter, full-
Works [2018 (17)
GSTL 429 (Mad.)] fledged assessment proceedings are to be undertaken wherein the
assessee is given an opportunity of hearing and thereafter, the
Para 12 final order is passed. In the case on hand, it appears that although,
the subject matter was unblocking of the ITC credit yet, the final
liability has also been fixed.
Back
DIRECTORS!
Back
Directors – Not ipso facto liable!
• Moreover, even if such amount cannot be recovered
from the private company, the directors of the
H M Industrial Pvt. company do not ipso facto become liable to pay such
Ltd. [2019 (22)
GSTL 13 (Guj.)]* amount and it is only if the director fails to prove that
non-recovery cannot be attributed to any gross neglect,
Para 2
misfeasance or breach of duty on his part in relation to
the affairs of the company, that the same can be
invoked. Back
Company – Separate from shareholders!
• … after having incorporated the Limited

B.A. Mohota

Textiles Traders Company and given it separate existence
Pvt. Ltd. [2018 (16)
GSTL 66 (Bom.)]* from it’s shareholders, it is not open to the
Para 14 Company to urge “Please ignore my separate

existence and look at the persons behind me.”
* Income Tax
Back
Director – Can be liable for the period of
Directorship even after resignation!
• It is also made clear by the respondents that even if
any Director resigns, he cannot seek exoneration from

Saurabh Kumaar
Pandey [2018 (15) liability of making payment of service tax, simply
GSTL 571 (All.)] because he resigned from the post of Director, if the
Para 3/10 service tax due is for the period when the accused was
a Director…no case is made out in favour of the
petitioner to pass any order prohibiting his arrest..
Back
EXEMPTIONS!
Back
Exemption – Taxpayer must establish that he
is covered by exemption!
• A person invoking an exemption provisions, to relieve

Aakavi Spinning him of the tax liability, must establish clearly that he is

Mills Pvt. Ltd.
[2018 (13) GSTL 17 covered by the said provision, and in case of doubt or
(Mad.)]*
ambiguity, benefit of doubt must go to the State, as
Para 31 each such exemption increases the tax burden on other
* TN VAT
members of the community correspondingly.
Back
Exemption – Road includes toll plaza as well!
• … we hold that construction like toll plaza,

GMR Projects Pvt. cattle/pedestrian crossing facilities, parking bay for

Ltd. [2021 (44)
GSTL 110 (Tri. buses/trucks, rest room for staff and common public at
Bang.)]*
large, etc. are also part of the road, as these are
Para 5 meant for exclusive use by the highway staff and the
* Service Tax
people using these roads.
Back
Exemption notification to be strictly
construed!
• It is trite, that while interpreting exemption notifications, such
notifications have to be interpreted, stricto sensu [Commissioner of
Kultar Exports Customs (Import), Mumbai v. Dilip Kumar & Co. (2018) 9 SCC 1 …
2020 (36) GSTL • The Supreme Court in Saraswati Sugar Mills [2011 (270) E.L.T. 465
0208 (Del.)]*
(S.C.)], has affirmed this principle, assailing in paragraph 7, as
follows : “7. ... A party claiming exemption has to prove that he/it is
Para 17/18
eligible for exemption contained in the notification. An exemption
notification has to be strictly construed. The conditions for taking benefit
* Service Tax judgment under the notification are also to be strictly interpreted. Back
Exemption – Conditions must be complied
with!
• It is trite law that the exemption notifications

Areva T & D India
Ltd [2019 (28) are to be strictly construed to the conditions
GSTL 570 (Mad.)]
stipulated in the notification for availing
Para 7 exemption and has to be complied with by the
concerned assessee.
Back
‘Solar Power Project’ – All equipments
entitled for exemption!
• Once an exemption has been granted in the matter of Value Added
BELECTRIC Tax/Entry Tax for setting up solar power based projects, the
PHOTOVOLTAIC exemption has to be given in respect of a complete project, as all
INDIA PVT. LTD.
[2019 (21) GSTL the equipment used in the project are integral part of the project
319 (M.P.)]* and even without one of the equipments, the project cannot
function. Once the entry includes “Solar Power Project”, all the
Para 19 material equipments used for the purposes of setting up power
* M P VAT Act, 2002 based project are certainly entitled for grant of exemption.
Back
‘To’ cannot be read as ‘by’!
• The reliance placed on Section 99 …, is of no relevance

as it applies only to taxable service provided by the

Premier Garment
Process [2022 (67) Indian Railways. The service provided by the appellant
GSTL 514 (Mad.)]* to the Railways cannot be construed as the service
Para 12/14 provided by the Railways…Once the language in taxing

statute is clear, there is no scope in interpreting the
* Service Tax same…
Back
INTERPRETATION!
Back
Ignorance of law - Not an excuse!
• When the definition is clear and unambiguous, ignorance of law

cannot be an excuse and the plea of genuine mistake in
CCE, Puducherry …
[2019 (25) GSTL interpretation cannot, hold good.
513 (Mad.)] • Supply of manpower cannot be mean to be a operation or activity in
relation to manufacture. The mistake of interpretation cannot be
Para 21/23
accepted and cannot be termed, as “Reasonable Cause” for not
paying Service Tax.
Back
Interpretation – If provisions clear,
consequences cannot be avoided!
• … when the provisions of law are clear, the

Glaxosmithkline
Asia Pvt. Ltd. [2019 consequences cannot be avoided… this is not a
(20) GSTL 209
(Bom.)] case of any ambiguity in the statutory provision
Para 12 giving rise to the concept of the benefits

flowing to the assessee in such a situation.
Back
Charging provision – To be strictly construed!
Santani Sales

Organisation [2018 • Charging provision of the taxing law must be strictly
(13) GSTL 144
(Del.)]* construed. [Federation of A.P. Chambers of Commerce
of Industry v. State of A.P., (2001) 247 ITR 36 (SC)].
Para 14
* Service Tax
Back
Tax statutes – Strictly interpreted irrespective
of the hardship!
• There is no equity about a tax in the sense that

Aakavi Spinning

Mills Pvt. Ltd. a provision, by which, a tax is imposed has to
[2018 (13) GSTL 17
(Mad.)]* be construed strictly, regardless of the
Para 33 hardship that such a construction may cause

either to the Revenue or to the taxpayer.
* TN VAT
Back
Interpretation – If language is clear then no
discretion to Courts!
• The language and the legislative intent

Garuda Timber clear, courts, in the name of discretion,
Trade [2018 (16)
GSTL 4 (Ker.)]
cannot do violence to the statutory
Para 34 mandate. Discretion smooths the edges,
but does not cut corners
Back
‘Mission-Impossible’ not possible in law!
• 7.1 As per the settled position of law, no party shall be left remediless
and whatever the grievance the parties had raised before the court of law,
has to be examined on its own merits [Sunil Vasudeva (supra) (para 31)].

Shekhar Resorts
Ltd. [2023 (68) • 7.2 … in the case of Calcutta Iron Merchants’ Association (supra), no law
GSTL 225 (S.C.)]* would compel a person to do the impossible...
• 7.3 In the case of Gyanichand (supra) it was observed … that it would not
Para 7.1 to 7.3
be fair on the part of the Court to give a direction to do something which is
impossible and if a person has been directed to do something which is
* SVLDR Scheme
impossible, and if he fails to do so, he cannot be held guilty.
Back
Interpretation supported by plain words to be
preferred!
• The language of the statute has to be interpreted bearing in mind
that it is a taxing statute which comes up for interpretation. The
Radha Krishan
provision must be construed on its plain terms.
Industries [2021
(48) SC (113)] • Equally, in interpreting the statute, we must have regard to the
purpose underlying the provision.
Para 40 • An interpretation which effectuates the purpose must be preferred

particularly when it is supported by the plain meaning of the words
used.
Back
Taxing statutes - Nothing is to be implied!
• It is a settled principle of construction of tax laws that

there is no room for any intendment or presumption in
Mohit Minerals Pvt
Ltd 2020 (33) GSTL tax statutes and one has to look only at the language
321 (Guj.)]* used.
Para 146/147 • There is no equity about a tax. ... Nothing is to be read

in, nothing is to be implied. One can only look fairly at
* Affirmed by SC the language used.
Back
Taxing statutes - To be strictly interpreted!
• As we are looking into the provisions of a taxing statute,

the construction of the provisions must be strict and in
Synergy Fertichem
Pvt Ltd 2020 (33) favour of the enforcement of the provision. In the
GSTL 513 (Guj.)] aforesaid context, we may refer to and rely upon a
Para 74 decision of the Supreme Court in the case of

Commissioner of Sales Tax, Delhi & Anr. v. Shri Krishna
Engg. Co. & Ors., (2005) 2 SCC 692.
Back
Taxing statutes - To be construed in a
harmonious way!
• Having regard to the context in which a provision
appears and the object of statute in which the said
Synergy Fertichem
Pvt Ltd 2020 (33) provision is enacted, the Court should construe it in a
GSTL 513 (Guj.)] harmonious way to make it meaningful. An attempt
Para 74 must always be made so as to reconcile the relevant

provisions as to advance the remedy intended by the
statute.
Back
Two views – Choose favourable one for the
taxpayer!
• The well settled rule of interpretation of Tax

WS Retail Services
Pvt. Ltd. [2018 (16)
GSTL 96 (Kar.)] laws that in case the two views are possible,
the one favourable to the assessee should be
Para 35
adopted …
Back
‘Non-obstante clause’ - Removes all
obstructions!
• Thus, the non obstante clauses are not always to be regarded as
repealing clauses nor as clauses which expressly or completely
Synergy Fertichem supersede any other provision of the law, but merely as clauses
Pvt Ltd 2020 (33)
GSTL 513 (Guj.)] which remove all obstructions which might arise out of the
provisions of any other law in the way of the operation of the
Para 73 principle enacting provision to which the non obstante clause is
attached. [See : Bipathumma & Ors. v. Mariam Bibi; 1966 (1)
Mysore Law Journal page 162, at page 165]
Back
Prescribe – Prescribed by Rules and not
notification!
• But the SEZ Act 2005 defines the word “prescribe” under
Section 2(w) to mean the rules framed by the Central
GMR Aerospace
Engg. Ltd [2020 Government under the SEZ Act, 2005. …the Central
(31) GSTL 596 Government has prescribed the terms and conditions for
(A.P.)]*
grant of exemptions under Rule 22. Therefore, there is no
question of comparing the terms and conditions prescribed in
Para 30
Rule 22 with the terms and conditions prescribed in the
notifications issued ...
Back
Deeming fiction – To be interpreted strictly!
West Bengal
Lottery … [2019
(26) GSTL 161 • The deeming provision has to be interpreted strictly as
(Ker.)]
it creates legal fiction.
Para 6
Back
‘Legal fiction’ – Legislature is competent to
create!
• The Legislature is quite competent to create a legal

Tata Teleservices
Limited [2018 (16) fiction, in other words, to enact a deeming provision
GSTL 218 (Chh.)]* for the purpose of assuming existence of a fact which
Para 19 does not really exist. (See J.K. Cotton Spinning &
Weaving Mills Ltd. v. Union of India - AIR 1988 SC 191).
* RVAT
Back
‘Primary’ use – Means exclusive or
predominant use!
• In the present facts, we find that dominant user of the sports
complex is non-commercial. The definition uses the words “used or
B J Shirke Cons.
Tech. Pvt. Ltd. to be used primarily for commerce or industry” clearly indicating
[2019 (25) GSTL 8 that the user is to be exclusively for commercial purpose or at least
(Bom.)]
it must be primarily for commercial purpose. The definition leaves
us in no manner of doubt that if the predominant user of the
Para 17
“sports stadium” is not commercial, then the same cannot be
subjected to levy of service tax.
Back
Amendment – Prospective unless expressly or
by implications retrospective!
• Every statute is, according to Kesavan v. State of
Sheen Golden Bombay - AIR 1951 SC 128, prima facie prospective

Jewels (I) Pvt Ltd unless it is expressly or by necessary implications made
[2019 (23) GSTL 4
(Ker.)]* to have retrospective operation. There is no reason why
this rule of interpretation should not be applied for
Para 63
interpreting our Constitution, and a constitutional
amendment, too
Back
Ambiguity – Benefit of interpretation should
go to taxpayer!
• …if there is an ambiguity in a provision of law or two
Sarva Shri Neeraj provisions under the same statute contradict each other,
Misthan Bhandar the benefit of interpretation out of such ambiguity or
[2019 (24) GSTL
513 (Uttar.)]* contradiction should always go in favour of the
assessee, since tax laws need to be with absolute clarity,
Para 22
not to give any room for interpretation in more than one
way.
Back
Tax statutes – Legislators have greater
latitude!
• It is well settled that as long as the legislation has necessary

FILCO TRADE competence to frame a law and the law so framed is not violative

CENTRE PVT. LTD.
of the fundamental rights enshrined in the constitution or any of
[2018 (17) GSTL 3
(Guj.)] the constitutional provision, the Court would not strike down the
statute merely on the perception that the same is harsh or unjust.
Para 20 Particularly, in taxing statutes the Courts have recognized much
greater latitude in the legislation in framing suitable laws.
Back
Explanatory notes – Not an accurate guide!
• In Shashikant Laxman Kale … (1990) 4 SCC 366 Reliance
Cellular Operators was placed upon the Explanatory notes appended to

Association of the Statement of Objects and Reasons of the Bill. The
India [2018 (14)
GSTL 522 (Del.)]* Supreme Court held that the petitioner therein could
not draw support from the heading in the explanatory
Para 14
note and explanatory memorandum would usually not
* CENVAT Credit
be an accurate guide of the final enactment.
Back
Promissory estopple - Not available against
legislative function!
• It can thus clearly be seen that this Court held that

Hero Motocorp the plea of promissory estoppel would not be
Ltd [2022 (66)
GSTL 129 SC] available against the exercise of the legislative
functions of the State. Equally, it cannot be
Para 45 invoked for preventing the Government from
discharging its functions under the law.
Back
Principle of ‘Stare decisis’ applied in works
contract case !
• Therefore, on the principle of stare decisis, we

Total Env. Building

Systems Pvt Ltd are of the firm view that the judgment of this
[2022 (63) GSTL
257 (SC)]* Court in the case of Larsen and Toubro Limited
Para 12 (supra), neither needs to be revisited, nor

referred to a Larger Bench …
* Service Tax
Back
UNDER-PROTEST!
Back
Under-protest deposit cannot be retained
except as per law!
• Such deposits under protest, to ease the rigors which the Tax
Authorities otherwise are entitled to impose, are not
Team HR
Services Pvt Ltd unknown and judicial notice has been taken thereof. However
[2020 (38) GSTL as long as the amount deposited is under protest and in
457 (Del.)]
which protest, as held in Mafatlal Industries Ltd. supra no
grounds are required to be stated, no right thereto accrues in
Para 13
favour of the depositee till the depositee is held entitled in
law thereto.
Back
PRE-DEPOSIT!
Back
Pre-deposit – Can be made through credit!
• ..pre-deposit has been made by the Firm before the

Tulsi Ram and Co. .
[2022 (67) GSTL 62 Appellate Authority, and the Appellate Authority shall
(All)]* not insist the Firm to make deposit through electronic
Para 4 cash ledger and shall proceed to decide the appeal on
• GST merits strictly in accordance with law.
Back
If pre-deposit is paid then balance is
‘deemed’ to be stayed!
• We find force in the above said contention. Sub-section (7) of S. 107

Smeara Entp.
[2020 (37) GSTL provides that where the appellant had paid the amount stipulated
401 (Ker.)]* under sub-section (6), which in the case at hand is 10% of the
remaining amount of tax in dispute, the recovery proceedings for
Para 7
the balance amount shall be deemed to be stayed.
Back
Pre-deposit – Deemed stay for balance!
• Section 107(7) of the CGST Act, 2017 which

Chaizup Beverages
LLP [2019 (25) provides that where 10% of disputed amount
GSTL 26 (Mad.)]
has been remitted by way of pre-deposit, the
Para 8 recovery of the balance amount shall be
deemed to be stayed.
Back
BLOCKING!
Back
ITC – Blocking is a drastic step, should be used
sparingly!
• The power conferred … under Rule 86A of the Rules for
blocking the ITC could be termed as a very drastic and far-
S S Industries reaching power. Such power should be used sparingly and
[2022 (57) GSTL
13 (Guj.) only on subjective weighty grounds and reasons.
• … Rule 86A of the Rules should neither be used as a tool to

Para 65 harass the assessee nor should it be used in a manner which
may have an irreversible detrimental effect on the business of
the assessee.
Back
ITC - There is no power of negative block!
• We rule that the condition precedent for exercise of power

Samay Alloys under Rule 86A of the GST Rules is the availability of credit in
India Pvt. Ltd.
the electronic credit ledger which is alleged to be ineligible.
[2022 (61) GSTL
421 (Guj.)] • If credit balance is available, then the authority may, for
reasons to be recorded in writing, not allow the debit of
Para 57 amount equivalent to such credit. However, there is no
power of negative block for credit to be availed in future.
Back
ITC - Authorities can block future ITC!
• It also stands to reason, if there is no positive credit standing

in the electronic credit ledger on the date of the order, passed
R M Dairy
Products [2022 under Rule 86A, that order would be read to create a lien
(55) GSTL 524 upto limit specified in the order passed as per Rule 86A of
(All.)]
the Rules. As and when the credit entries arise, the lien would
attach to those credit entries upto the limit set by the order
Para 25
passed under Rule 86A of the Rules. The debit entry recorded
in the electronic credit ledger would be read accordingly.
Back
GLOBAL VAT!
Back
VAT laws of other countries may not be
relevant!
• When the levy of GST, determination of taxable value are governed by
the Parliamentary Act in this country, we are of the view that
Skill Lotto legislative scheme of other countries may not be relevant for
Solutions Pvt determining the issue which has been raised before us.
Ltd [2020 (43)
GSTL 289 (SC)] • The taxing policy and the taxing statute of various countries are
different which are in accordance with taxing regime suitable and
Para 81 applicable in different countries.
• The issue … has to be answered by looking into the statutory provisions

of the Act, 2017 and the Rules framed therein which govern the field.
Back
JUDGMENTS!
Back
Apex Court – Law declared is binding on all!
Mangala Ispat

(Jaipur) Pvt. Ltd. • It is well settled principle of law that the
[2018 (15) GSTL
487 (Raj.)]* law declared by the Supreme Court is
Para 10 binding on all…
Back
Ratio decidendi - Has to be taken note of !
• …wrong impression that the decisions .. will

Elite Furniture
Mart [2018 (14)
GSTL 508 (Mad.)]* apply only to the parties to the
litigation…Ratio decidendi of a particular
Para 8
judgment or order has to be taken note of …
* TN VAT Act
Back
HC judgments binding unless set aside by SC
or there is change in law!
• We cannot appreciate the contention of the Revenue that merely
because the Department has not accepted the earlier Division Bench
Pay Pal India Pvt judgments of this Court, and without filing any appeal in an
Ltd [2020 (39)
appropriate manner, the present appeal on the same ground cannot
GSTL 261
(Mad.)] be entertained. The Revenue Department is bound by the judgments
of this Court unless they are set aside by higher Courts in
Para 8 appropriate proceedings. It is also not the case of the Department
that any subsequent amendment in law has changed the legal
position …
Back
Disregard to judgment – May invite contempt
proceedings!
• … despite more than one judgment … in favour of the assessees,

the tendency on the part of the Assessing Authorities of the

Kirloskar Electric
Co. Ltd. [2018 (16) Respondent Department to still keep on passing the orders
GSTL 564 (Kar.)] contrary to these judgments is in utter disregard of the judicial
and hierarchical discipline which they are bound to observe and it
Para 34
may also amount to a deliberate disobedience on their part and
may invite contempt action …
Back
Judicial discipline – Must be maintained!
• … the judicial discipline is required to be

Welcure Drugs &

Pharma. Ltd. [2018 maintained. The Tribunal cannot distinguish
(15) GSTL 257
(Raj.)]* the High Court judgments. They are bound by
Para 13 the High Court judgments even jurisdictional

High Court …
Back
Judicial discipline – Adjudicating Authority
must follow Tribunal judgment!
• …when the order passed by the Tribunal has

Industrial Mineral

Co. (IMC) [2018 not been stayed or set aside by the Hon’ble
(15) GSTL 249
(Mad.)]* Supreme Court, it is the bounden duty of the
Para 8 adjudicating authority to follow the law laid

down by the Tribunal.
Back
Judgment – Consider more appealing decision
if equal strength bench!
Laxmi Narayan • Even if it is taken to be a conflict, but the

Sahu [2018 (19)
GSTL 626 (Gau.)] decision having been rendered by a Bench of
equal strength, the proposition that is more
Para 30
appealing is to be taken into consideration.
Back
Contentions – If not raised before Tribunal
then cannot be taken before HC!
• The contention sought to be raised is that the amount
McKinsey & recovered from the customers is in the nature of

Company Inc. reimbursement of expenditure and not for providing of
[2019 (20) GSTL
198 (Bom.)] service. This factual contention is not agitated before
the Tribunal as there is no reference to the such
Para 23
contention raised in the impugned Judgment. Therefore,
the same cannot be raised in this appeal.
Back
Doctrine of per incuriam – Not considered
relevant provisions or judgment!
• While one judgment seems to have not considered
relevant statutory provisions, the other judgment

Om Disposals
[2018 (15) GSTL seems to have overlooked the earlier judgment which
561 (All.)] may, otherwise, have constituted binding precedent. In
Para 19 such situation, it may be said that the doctrine of per

incuriam applies to both judgments, though in
* UP GST Act different contexts.

Back
CIRCULARS!
Back
Circulars - Binding on Authorities!
• In Navnit Lal C. Javeri v. K.K. Sen, …AIR 1965 SC 1375, K.P.

Seventh Plane
Networks Pvt. Varghese … (1981) 4 SCC 173 and Paper Products Ltd. …
Ltd. [2020 (41) (2001) 247 ITR 128 (SC) = 1999 (112) E.L.T. 765 (S.C.), it has
GSTL 165 (Del.)]
been held that circulars are binding on departments and
department cannot challenge them even if they are
Para 12
inconsistent with the statute.
Back
Circulars – At best for internal guidance!
• The Circulars, at best, are for internal guidance

Deepak Fertilisers or clarification of queries of the Trade and
& Petro. Corp. Ltd.
[2019 (20) GSTL officials, but their language cannot control the
219 (Bom.)]
substantive notifications. The notifications
Para 50
amending the schedule would enjoy the same
status as that of the rules under the Act.
Back
Circulars - Cannot prevail over statutory
provisions!
Precot Meridian
Ltd 2020 (34) GSTL • Circulars are issued only to clarify the statutory
27 (Mad.)]
provision and it cannot alter or prevail over the
Para 14 statutory provision.
Back
Circulars - Not binding on taxpayers!
Bansal
Earthmovers Pvt • It is trite law that the Circular issued by the Central
Ltd 2020 (34) GSTL
63 (Cal.)] Board of Indirect Tax and Customs is only binding upon
the authorities and not upon the assessee.
Para 14
Back
Circulars - Cannot withdraw benefits!
Pitambara Books • Circulars might mitigate rigours of law by granting administrative

Pvt Ltd 2020 (35)
GSTL 196 (Del.)] relief beyond relevant provisions of the statute, however, Central
Government is not empowered to withdraw benefits or impose
Para 12 stricter conditions than postulated by the law.
Back
Circulars – Officers bound to follow!
• The officers and all other persons employed in

F S Entp. 2020 (32)
GSTL 321 (Guj.)] the execution of the GST Acts are, therefore,
Para 13 bound to observe and follow such orders,

instructions and directions of the Board.
Back
Circular – Cannot take away exemption!
• …by issuing a mere Circular exercising the powers

under Section 168 of the CGST Act, 2017, such kind of

Jenefa India [2022
(67) GSTL 542 right already vested, to get exemption, on the
(Mad.)]* assessee, cannot be taken away by way of a
Para 32 clarificatory Circular, that too issued only to the benefit

of the officials and staff of the department, as culled
* GST
out from the language used in Section 168 of the Act…
SCRUTINY!
Back
Scrutiny u/s 61 – ASMT 10 must cover specific
issues!
• To a pointed question as to whether Form ASMT 10
which ought to have been issued in respect of aspects

Vadivel Pyrotech
(P.) Ltd. [2023 (68) forming the subject matter of the proceedings in GST
GSTL 120 (Mad.)]* DRC-01 …, the learned Additional Government Pleader
Para 7 submitted that Form ASMT 10 was not issued other

than the one issued on 22-12-2021, which does not
* GST
cover the issues raised in the impugned proceeding…
Back
INVESTIGATION!
Back
Audit commenced – Then investigation
cannot be proceeded with!
• …we are of the view that since the audit proceedings

under Section 65 of the Act has already commenced, it

R.P. Buildcon (P.)
LTD. [2018 (37)
GSTL 37 (Del)]* is but appropriate that the proceedings should be taken
to the logical end. The proceedings initiated by the
Para 7
Anti Evasion and Range Office for the very same period
• GST
shall not be proceeded with any further.
Back
SUMMON!
Back
DGGI and DRI, both can summon for same
transaction!
Dinesh Kumar
Goyal • I am of the view, different authorities can proceed with respect to
[2020 (37) GSTL the same transaction if the liabilities arising from one transaction
405 (Cal.)]*
are in respect of different legislations under which the authorities
operate. There is no bar and/or impediment in doing so.
Para 5
Back
Presence of lawyer not permissible during
summon!
• The petitioner … has been summoned by the officers
under GST Act who are not Police Officers and who have
Sudhir Kumar been conferred with the power to summon any person
Aggrawal 2020
(34) GSTL 155 whose attendance they consider necessary to give
(Del.)]
evidence or to produce a document. The presence of the
Para 21 lawyer, therefore, is not required during the
examination of the petitioner as per the law laid down
by Hon’ble Supreme Court in Pool Pandi’s case (supra).
Back
Police have jurisdiction to investigate
offenses under IPC!
• … the Assam Police would have jurisdiction to
investigate certain offences under the Indian Penal
Sangtei Entp. Ltd
2020 (33) GSTL Code, if made out, even if these may be also offences
145 (Gau.)] under the CGST Act, 2017 or AGST Act or the Customs
Para 43 Act, 1962. However, as provided under Section 26 of the

General Clauses Act, no one will be liable to be punished
twice for the same offence.
Back
Letters/ Notices – Should not intimidate!
• The letters/notices must be appropriately

National Building
Constr. Ltd [2019 worded. In a given case they may refer to the
(20) GSTL 515
(Del.)]* penal or prosecution provisions to ensure
Para 34 compliance but they should not intimidate and

be minatory.
Back
SEIZURE!
Back
Copies – Taxpayer is entitled to receive!
• As can be seen from Section 67(5) that if the originals
cannot be returned, at least the person is entitled to
High Ground Entp. receive copies thereof. The idea is that businesses
Ltd 2020 (33) GSTL
169 (Bom.)] should not be subjected to needless harassment. …
There must be cogent reasons to withhold giving of
Para 10/11
copies to the person. A mere statement that it will
prejudicially affect the investigation would be only
chanting the language of the section. Back
Copies - Department may give copies!
• …the petitioner went on record declaring that it had no

Kohinoor Floors
Pvt Ltd [2018 (18) other records to produce, except those that had been
GSTL 815 (Ker.)] seized. Because of that declaration that the petitioner
Para 6 has no other records to be produced, the department

may give copies of the documents to the petitioner ...
Back
SEARCH!
Back
Search – Not vitiated by error in seizing
documents!
• Even otherwise, it is trite that an error committed by
the Officer in seizing the documents which may
Ramco Cements ultimately be found not to be useful for or relevant to
Ltd. [2019 (24)
GSTL 24 (Mad.)]* the proceeding under the Act will not by itself vitiate
the search. In any case, all those documents, which
Para 30
have been seized, would undergo scrutiny of the
concerned Court if and when prosecution is launched
against the accused by filing charge sheet. Back
Sealing of premises – Is illegal!
• Section 67 (4), which merely authorizes the concerned

Napin Impex Pvt. officials to search the premises and if resistance is
Ltd [2018 (19)
GSTL 578 (Del.)]* offered, break-open the lock or any other almirah,
electrical device, box, etc. containing books and
Para 7
documents, the complete sealing of the premises, in the
opinion of the Court is per se illegal.
Back
ARREST!
Back
No arrest if accused co-operated and did not
disobey summons!
• A distinction must be made between the existence of
the power to arrest and the justification for exercise of
it. [Joginder Kumar … - (1994) 4 SCC 260]. …If the

Siddharth [2022
(64) GSTL 34
(S.C.)]* Investigating Officer has no reason to believe that the
accused will abscond or disobey summons and has, in
Para 12
fact, throughout co-operated with the investigation
we fail to appreciate why there should be a
* CrPC
compulsion on the officer to arrest the accused. Back
Arrest – Only in exceptional circumstances!
• Power of arrest should not be exercised at the
Akhil Krishan whims and caprices of any officer or for the

Maggu 2020 (32)
GSTL 516 (P&H)] sake of recovery or terrorising any
businessman or create an atmosphere of fear,
Para 9
whereas it should be exercised in exceptional
circumstances during investigation…
Back
‘Commits’ – There must be act of committal!
• Section 132 of the Act as extracted earlier,

Jayachandran imposes a punishment upon the Assessee that
Alloys Pvt. Ltd.
[2019 (25) GSTL ‘commits’ an offence. … The use of words
321 (Mad.)]*
‘commits’ make it more than amply clear that
Para 37
the act of committal of the offence is to be
fixed first before punishment is imposed
Back
Adjudication and Prosecution – Independent
of each other!
• …every person who at the time, the offence was
committed was in charge shall be severally and jointly

Manoj Kumar
Arora [2018 (15) liable for being prosecuted …Two proceedings are
GSTL 323 (All.)]* quite independent. Both can go on simultaneously and
Para 7 finding in the adjudication proceedings is not binding

on the criminal proceedings. A prosecution can be
* Central Excise Act
launched even after the completion of adjudication.
Back
TAXING POLICY!
Back
In taxing policy, Courts have limited play!
Skill Lotto
Solutions Pvt Ltd • … it is well settled that with regard to taxing policy
[2020 (43) GSTL
289 (SC)] of the legislature, the Courts have very limited
role to play.
Para 57
Back
PROVISIONAL
ATTACHMENT!
Back
Provisional attachment is draconian!
• The power to order a provisional attachment of the

Radha Krishan
Industries [2021 property of the taxable person including a bank
(48) SC (113)]
account is draconian in nature and the conditions
which are prescribed by the statute for a valid
Para 48
exercise of the power must be strictly fulfilled;
Back
INTEREST!
Back
Interest – Self-imposed and automatic!
ORISSA • …it is clear that the liability to pay interest

STEVEDORES LTD.
[2022 (67) GSTL under Section 50 is not only self-imposed but
284 (Ori.)]*
also automatic without any requirement for
Para 7
determination by any other …
* GST
Back
INTERMEDIARY!
Back
Investment advisor are not ‘intermediary’!
• … Merely because I Squared may have, on the basis of
advisory services given by the petitioner, made the
Cube Highways
investments in entities in India, cannot be construed to

..Assets Advisor
[WP NO. 14427/ mean that the petitioner had rendered the advisory
2022]
services as an ‘Intermediary’.
Para 37/44 • ..this question is also ..covered by an earlier decisions
*GST … in M/s Ernst & Young Ltd. … and in Ohmi Industries

Asia CAPvt. Ltd. … Back
Pritam Mahure and Associates
Sub-contracting – Not ‘intermediary’ services!
• Petitioner… is involved in providing a host of services

Genpact India Pvt.
Ltd. [2023 (68) collectively referred as BPO Services…Even as per the
GSTL 3 (P & H)]* afore-noticed circular dated 20-9-2021 and in reference
Para 46 to Para 3.5 it stands clarified that sub-contracting for a

service is not an “intermediary” service.
*GST
Back
Principal to Principal or Agent!
• The relationship between the FTO and the subscriber is

on principal to principal basis and not on principal and

Vodafone Idea Ltd
[2022 (66) GSTL 63 agent basis The subscriber has to approach the FTO
(Bom.)]* for the purpose of rectifying the deficiency. We find
Para 24 that this itself would substantiate that the subscriber

is not representative or agent of the FTO. (‘FTO’ -
* GST Foreign Telecommunication Operator)
Back
EARLIER LAWS!
Back
Hangover of earlier regime not permissible!
• … Prima facie, it appears that while issuing the impugned
notification, the delegated legislature had in mind the provision of
Mohit Minerals the Finance Act, 1994...
Pvt Ltd
• … despite having levied … integrated tax …, on import of goods on
[2022 (61) GSTL
257 (SC)] the entire value …, once again the integrated tax is being levied
under an erroneous misconception of law that separate tax can be
Para 132/133 levied on the services components (freight), which is otherwise
impermissible under the scheme of the GST legislation made under
the CA Act, 2016. Back
Section 89 confined to GST only!
• Though Section 174(2) of CGST Act saves any duty or tax that is due or may
become due under the repealed Act including Chapter V of the Finance Act,
yet there is no provision in the Finance Act making the Directors personally
Sanjeev Kumar liable for service tax liabilities of a company.
Mittal 2021 (44)
GSTL 14 (Del.)] • It is clarified that Section 89 of the current CGST Act is confined only to
liabilities assessed under the CGST Act and cannot be used to fasten
Para 22/23 personal liability on Directors for company dues determined under the
Finance Act. After all, no new liability can be fastened under the CGST Act
for a period prior to its enactment as it does not have retrospective
operation. Back
Consignment note includes any document
with similar nature!
• Tribunal while observing that transporters have not issued

consignment note ignored the fact that under Section 65(50b) it has
Kisan Sahkari Chini
Mills Ltd 2019 (29) been further clarified that a consignment note or anything having
GSTL 292 (All.)]* similar nature but called by whatever name, would be within the
ambit of Section 65(50b) of Finance Act, 1994. The term
Para 14
“consignment note” has no magical or technical meaning looking
to the very purpose and intent of legislature in the matter.
*Service Tax judgment Back
Customs – May not be relevant for MVAT!
• ...the controversy was to be decided with reference to

Ricoh India Ltd the Customs Tariff Act, 1975. That is a distinct statute…
[2019 (21) GSTL
127 (Bom.)]* The MVAT Act notification does not make any reference
to the Customs Tariff Act, 1975. ... Once we have come
Para 44/45
to the conclusion that the same was under a distinct
law, then, even this judgment is of no assistance.
* Maharashtra VAT
Back
Order – If without authorization then liable to
be set aside!
• …orders are based on the result of a VAT audit,

Jeevan Buy N. Save
[2018 (15) GSTL which was authorized by the Joint
533 (Mad.)]
Commissioner, who was not vested with the
Para 2/ 10 necessary power … The assessment orders and
the VAT Audit reports are set aside
* TN VAT Back
CONSTITUTION!
Back
‘Saving clause’ ensures that VAT liabilities
are not affected!
• The appellant’s contention is totally untenable in view of the
insertion of saving clause, namely Section 174 of the KGST
Prosper Jewel
Arcade LLP [2021 Act in order to ensure that the repeal of the KVAT Act shall
(50) GSTL 15 not affect liabilities accrued or tax payable under the KVAT
(Kar.)]
Act. Therefore, in view of the savings clause under Section
174, the appellant’s contention that the State cannot
Para 41
reassess the liability incurred prior to repeal of the KVAT Act
is totally baseless.
Back
Article 246A confers very wide power!
• Article 246A begins with non obstante clause that is

“Notwithstanding anything contained in Articles 246 and
Skill Lotto
Solutions Pvt Ltd 254”, which confers very wide power to make laws.
[2020 (43) GSTL • The power to make laws as conferred by Article 246A fully
289 (SC)]
empowers the Parliament to make laws with respect to
Para 49 Goods and Services Tax and expansive definition of goods

given in Section 2(52) cannot be said to be not in accord with
the constitutional provisions.
Back
Article 246A must be liberally construed!
• … Article 246A is a special provision with regard to Goods

Skill Lotto and Services Tax w.e.f. 16-9-2016, which special power has to
Solutions Pvt Ltd be liberally construed empowering the Parliament to make
[2020 (43) GSTL
289 (SC)] laws with respect to Goods and Services Tax…
• This Court further laid down that a word appearing in a

Para 58 Constitution Act, must not be construed in any narrow and
pedantic sense.
Back
Right to carry on business cannot be
curtailed!
• The provisions of the GST enactments cannot be interpreted so as to
deny the right to carry on Trade and Commerce to a citizen and subjects.
TVL. SUGUNA • The constitutional guarantee is unconditional and unequivocal and must
CUTPIECE CENTER
be enforced regardless of the defect in the scheme of the GST
[2022 (61) GSTL
515 (Mad)] enactments.
• The right to carry on trade or profession also cannot be curtailed. Only

Para 225 reasonable restriction can be imposed. To deny such rights would militate
against their rights under Article 14, read with Article 19(1)(g) and Article
21 of the Constitution of India.
Back
Taxing statutes - Constitutional validity!
• While dealing with constitutional validity of a taxation law …, the
court must have regard to the following principles : (i) there is
Ice Cream always presumption in favour of constitutionality …, (ii) no
Manufacturers
enactment can be struck down by just saying that it is arbitrary or
Asso. 2020 (32)
GSTL 338 (All.)] unreasonable or irrational but some constitutional infirmity has to
be found, (iii) the court is not concerned with the wisdom or
Para 8 unwisdom, the justice or injustice …, (iv) hardship is not relevant …,
and (v) in the field of taxation, the Legislature enjoys greater
latitude for classification Back
Constitutionality – Always a presumption in
favour!
Sheen Golden • There is always a presumption in favour of

Jewels (I) Pvt Ltd constitutionality, and a law will not be declared
[2019 (23) GSTL 4
(Ker.)]* unconstitutional unless the case is so clear as to be free
from doubt; ‘to doubt the constitutionality of a law is to
Para 64
resolve it in favour of its validity.
Back
GST Council decisions – Not immune from
judicial review!
• However it should not be construed that, the decisions
or the resolutions of the Goods and Services Tax
Teesta Distributors Council is immune from judicial review …In a given
[2018 (19) GSTL 29
(Cal.)] case, where, a resolution adopted in the Goods and
Services Tax Council meeting is substantiated to be
Para 38
breaching any fundamental right or any provision of
the Constitution of India, the same can be adjudicated
upon by a Writ Court. Back
GST LAW!
Back
GST on royalty – Pending before SC!
Jubilee Granites • the very issue as to whether GST would be chargeable

India Pvt. Ltd.
[2022 (66) GSTL on minerals on which already royalty has been paid is
438 (A.P.)]*
actively under consideration before a Nine Judges
Para 7 Bench of the Hon’ble Supreme Court…
* GST
Back
Frequent Changes have made GST more
complex!
• … taxpayers have faced difficulties in understanding the
complexity of GST procedures. Its implementation has not been
smooth and the Government itself has faced huge challenges. The
TMA International
Pvt Ltd 2020 (35) model of matching of invoices … could not be implemented and a
GSTL 22 (Del.)] truncated version of returns had to be introduced. This also entailed
frequent issuance of innumerable circulars and notifications in
Para 14
quick succession, extending deadlines, introduction of fresh
procedures ... As a result taxpayers were reeling under confusion
which continues until this day Back
GST – Virgin law but not so different from
earlier statutes!
• The Central Goods and Services Tax Act, 2017, is a virgin
enactment, born on 1-7-2017. The scheme of the Act is however
Jayachandran not so different from the Indirect Tax Statutes that it has
Alloys Pvt. Ltd.
subsumed… The GST enactment subsumes various enactments
[2019 (25) GSTL
321 (Mad.)]* including the Central Excise Act, the Finance Act providing for the
levy of Service Tax and State Value Added Tax Acts. Thus the
Para 10/ 33 interpretation given to the provisions of the aforesaid statutes
would equally govern the working of the present statute (GST) as
well. Back
State VAT laws and GST - They differ!
Megha
Engineering … • The VAT regime and the GST regime differ from each
[2019 (26) GSTL
183 (Tel.)] other substantially. Therefore, these decisions do not go
to the rescue of the petitioner
Para 44
Back
VAT and ST are mutually exclusive!
• …it is settled law that sale of goods and

Nayana Premji
Savala [2022 (66)
GSTL 417 (Bom.)]* services are mutually exclusive and both VAT
and service tax cannot be levied on the same
Para 30
transaction…
* Service Tax
Back
DIN – To be implemented by States as well!
• We impress upon the concerned States to consider to

implement the system for electronic (digital)

Pradeep Goyal
[2022 (63) GSTL generation of a DIN for all communications sent by the
286 (SC)]* State Tax Officers to taxpayers and other concerned
Para 7 persons so as to bring in transparency and

accountability in the indirect tax administration at the
* GST earliest.
Back
GST – ‘EMI’ permitted!
• ... There are 100 people working in the Company.

Impact Metals Ltd Therefore, while it is necessary to recover the tax
[2019 (25) GSTL
510 (Tel.)] arrears, it is also necessary to keep the Industry alive. …
In such circumstances, the writ petition is disposed of
Para 6/7
granting the facility of payment of the arrears of taxes,
in twelve (12) equal monthly installments.
Back
Wrong payment – Transfer from SGST to IGST
permitted !
• As seen, Section 77 provides for the refund of the tax
paid mistakenly under one head instead of another. But
Rule 4 speaks of adjustment… I find no difficulty for the
Saji S. [2018 (19)
GSTL 385 (Ker.)] respondent officials to allow the petitioner’s request
and get the amount transferred from the head ‘SGST’
Para 9 / 10 /11
to ‘IGST’ … ensure that the tax and penalty already
stood remitted under the ‘SGST’ is transferred to the
head ‘IGST’. Back
Officials – To act as facilitators than
tormentors!
• FCI… not depositing the tax deducted… like a petty trader, coming
up with all kinds of excuses for not doing so…It is high time that
officials of the Government, both Central and State, act as

Ashish Kumar Dey
[2018 (16) GSTL 25 facilitators to the office-goers and not their tormentors…The time
(Tripura)]* has now come for the Central Government authorities to review
and closely monitor the functioning of its officials at every level if
Para 9
its policy is to succeed. Citizens should not be compelled to come
to the Court for avoidable litigation at huge costs, which is
* Tripura VAT - TDS
undoubtedly contrary to the National Litigation Policy. Back
Tax Authorities – Fundamental duty to
unearth evasion!
• In the case of Gill Sandhu Haryana Transport Co. v. State of

Jai Mata Di Cargo Rajsthan, (1991) 10 RT JS 335 (paras 6, 7), ... Rajsthan High Court

Services P. Ltd.
observed that where a transporter is stopped and it is found that
[2018 (15) GSTL
226 (All.)]* consignee is fictitious and the goods are seized, it is not likely to
effect the right of the transporter… The action of the departmental
Para 21/22 authorities in such cases to unearth evasion of tax is one of their
fundamental duties under the Act.
* UP VAT Act
Back
Officer – Protected if acts in a good faith!
• Thus, an officer is protected provided he is authorised
to do something under the GGST Act and provided such
Prakashsinh H act has been done in good faith. In the opinion of this
Udavat 2019 (31)
GSTL 583 (Guj)] Court, when an officer functioning under the GGST Act,
acts in a highhanded and arbitrary manner in excess of
Para 22/23
the authority vested in him the same is required to be
viewed very seriously. Justice demands that such citizen
be compensated for the undue harassment faced by him
Back
Officers – Cannot act in excess of authority!
• While the activities of an assessee contrary to the

Jayachandran scheme of the Act are liable to be addressed swiftly and
Alloys Pvt. Ltd.
[2019 (25) GSTL effectively by the Department, (the statute in question
321 (Mad.)]
being a revenue statute where strict interpretation is the
Para 40 norm), officials cannot be seen to be acting in excess of
the authority vested in them under the statute
Back
Amnesty – Its an irony!
• It is an irony of law that Schemes such as VCES, VDS

(Voluntary Disclosure Scheme) or Composition Scheme,
Crescent EPC
Projects... [2019 are intended for the benefit of defaulters. Therefore,
(27) GSTL 17 (Tel.)] while interpreting the provisions of such Schemes, the
Para 17 Court cannot adopt such an interpretation which will

create two different classes of defaulters, greater and
smaller or chronic and ordinary.
Back
Tribunals - Non-functioning leads to
deprivation!
• Therefore, on account of non-functioning of these Tribunals, the

litigants are rushing to this Court adding additional pendency.
Oudh Bar Asso.
[2019 (25) GSTL Furthermore, the litigants are deprived of their right to appeal. It
374 (All.)] may be added that delay in disposal of cases, not only creates
disillusionment amongst the litigants, but also undermines the
Para 53
capability of the system to impart justice in an efficient and effective
manner.
Back
Thank you!
Happy to Discuss
For suggestions: Pritam.Mahure@Lawgical.in / Sahil.Tharani@Lawgical.in / +91 99206 44648 / 90988 90333
E-books on GST
E-books on How to be Future Proof

•
Smile please ☺ Back

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GST at 6 - SC and HC - Key Case Laws - 5 Sept. 2023 - CA Pritam Mahure and Asso.

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GST @ 6!

ALL KEY OBSERVATIONS BY SC AND HC!

[5th September 2023]

CA Pritam Mahure and Associates!

CA Pritam Mahure and Associates

Communication Adjudication Appeal Directors Exemptions Interpretation

Under-protest Pre-deposit Blocking Global VAT Judgments Circulars

Scrutiny Investigation Summons Seizure Search Arrest

Delhi • … the UDF is in the form of 'tax or cess’ collected for

• The liability to pay tax under the GST regime is

CA Pritam Mahure and Associates

• It appears to reason that not just the immovable property portion

CA Pritam Mahure and Associates

• … although the quantification of royalty towards a

• When a partnership agreement recites that one of the partners

CA Pritam Mahure and Associates

• ST profits only in addition to a salary indicates the relationship of

Para 61 benefit accruing to one party, or some forbearance,

• …The person who pays the valuable

• … Payment need not, however, be made in cash: a

• The judgment in Mohd. Ekram Khan does not apply to a

Para 70 replace a defective part therein under a warranty

• This court, in Bhayana Builders (supra), ruled that to

Delhi attract service tax levy, a taxable service has to be

• Making the entire bet amount that is received by the

• .. the by-products were allowed to be

Para 20 by-products form part of compensation but

CA Pritam Mahure and Associates

Para 5 provider as consideration. There is no requirement

• The definition of the expression ‘sale’ would

CA Pritam Mahure and Associates

• The Central Public Works Department … contended

CA Pritam Mahure and Associates

CA Pritam Mahure and Associates

• Entry 6 of Schedule III of CGST Act, 2017 takes out

Para 34 ‘actionable claims’ which do not attract the CGST Act,

• The inclusion of actionable claim in definition “goods” as given in

• We are of the view that the artificial segregation of the

CA Pritam Mahure and Associates

• The transaction in the appellant before us is a clear transaction of

CA Pritam Mahure and Associates

• Hon’ble Supreme Court in Government of NCT of Delhi v. Union of

CA Pritam Mahure and Associates

Para 43/45 following phrase must be given a wide interpretation… It is further

• … circular issued by the CBEC, on 18.12.2006,.. clarified that … “…

* Service Tax of taxable service…

CA Pritam Mahure and Associates

Para 27 superimposed on a contract to sell a Flat/unit in a

CA Pritam Mahure and Associates

• While clubbing of two independent supplies may be resorted to for

CA Pritam Mahure and Associates

• Section 15 of the Act, 2017 by sub-section (2) it is provided what

• What is the value of taxable supply is subject to the statutory

• A charging provision and the machinery provision are two sides of

* Service Tax judgment

Para 14 legislature never intended to tax such item.

Para 14 time of the sale transaction for a purpose other than

* Excise transaction value…

• The primary source is in the form of agreements, invoices/ challans,

• Form GSTR2A is only a facilitator for taking an informed decision

• The only requirement under the Cenvat Credit Rules,

• It is clear that CESTAT in its finding (in para 4) noticed the