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Orissa HC Quashes GST Penalty Under Section 74 Citing Jurisdictional ErrorOn behalf of petitioner Mr Harichandan, the ad...
19/02/2025

Orissa HC Quashes GST Penalty Under Section 74 Citing Jurisdictional Error

On behalf of petitioner Mr Harichandan, the advocate appears and said that the impugned is Show cause notice on 19th February 2024 that has the purported finding of misstatement made by his client, to underpay the tax issued under sub-section (l) in section 74 of Central Goods and Services Tax Act, 2017.

The provision was invoked to take the extended duration of limitation though no allegation of misstatement in the SCN was there.

Situations are been addressed by the Central Goods and Services Tax (CGST) Act, 2017’s Section 74 where the taxes are not, paid in full, or incorrectly refunded, or in which input tax credits (ITCs) are improperly used or obtained as a consequence of fraud, deliberate misrepresentation.

It is been comprehended that there has been a jurisdictional error that proceeds to the root of the impugned order, the division bench of Justice Arindam Sinha, Acting Chief Justice, and Justice M.S. Sahoo set aside on interference. He also aspires to interim protection.

On behalf of revenue Mr. Satapathy, advocate, Senior Standing Counsel appears and furnished that there is a clear finding of the misstatement. The tax rate was intended to be applied at a lower rate.

Acknowledging the submission of jurisdictional error going to the root of the impugned order, there is a necessity for the writ petition to be heard.

When a tax authority initiates proceedings or takes action beyond its legally defined area of authority then a jurisdictional error under GST arises. If a state officer furnishes a notice for a matter under the Central GST jurisdiction, or vice versa.

If a lower authority manages a case directed for a higher authority. If an officer from a distinct state or region furnishes a notice. When a matter pertinent to a regular is managed under the composition scheme.

⚖ MRL INDUSTRIAL CO-OPERATIVE SERVICE SOCIETY LTD. vs. COMMERCIAL TAX OFFICER & ORS. – Madras High Court Quashes Ex Part...
19/02/2025

⚖ MRL INDUSTRIAL CO-OPERATIVE SERVICE SOCIETY LTD. vs. COMMERCIAL TAX OFFICER & ORS. – Madras High Court Quashes Ex Parte GST Demand Order ⚖

In a crucial ruling, the Madras High Court has set aside an ex parte GST demand order issued against MRL Industrial Co-operative Service Society Ltd., citing a violation of natural justice.

🔹 Key Observations:
✅ The GST department failed to serve notices through physical mode, making them available only under the “View Additional Notices and Orders” section of the GST portal, which the petitioner was unaware of.
✅ The demand order was passed without granting an opportunity of hearing, violating principles of natural justice.
✅ The court quashed the impugned orders dated 29th April 2024, including the Summary of Order in Form GST DRC-07, and remanded the matter for fresh consideration.

⚖ Verdict:
📌 The court held that the ex parte orders were invalid, emphasizing that due process and fair hearing are fundamental to tax proceedings.

🚀 This judgment serves as a strong reminder to tax authorities that proper notice and hearing are essential before passing adverse orders.

(2025) 8 CTOGST (Mad) 79

💬 Do you think GST authorities should implement better notification mechanisms to avoid such disputes? Share your thoughts!

🏛 GOISU REALTY (P) LTD. vs. STATE OF MAHARASHTRA & ORS. – Bombay High Court Quashes Bank Account Attachment under GST 🏛I...
19/02/2025

🏛 GOISU REALTY (P) LTD. vs. STATE OF MAHARASHTRA & ORS. – Bombay High Court Quashes Bank Account Attachment under GST 🏛

In a significant ruling, the Bombay High Court set aside the provisional attachment of the bank account of GOISU Realty (P) Ltd., calling it a colorable exercise of power under Section 83 of the CGST Act.

🔹 Key Observations:
✅ The power to provisionally attach a taxable person’s property, including a bank account, is draconian and must be exercised strictly per statutory conditions.
✅ The Commissioner must form an opinion based on tangible material that the assessee is likely to defeat the demand if any arises—such material was completely absent in this case.
✅ The petitioner had substantial financial standing, with ₹11,981 crores in paid-up share capital and ongoing projects worth ₹8,000 crores, free from encumbrances.
✅ The court questioned how the Commissioner arrived at the conclusion that attachment was necessary to protect revenue interests when no evidence supported such a claim.

⚖ Verdict:
📌 The impugned order dated 28th January 2025 was quashed, and the court directed the bank to allow the petitioner to operate its account immediately.

🚀 This ruling reinforces that authorities cannot arbitrarily invoke Section 83 without proper justification. Courts will not hesitate to intervene in cases of excessive or unjustified use of power.

(2025) 8 CTOGST (Bom) 67

🔍 What are your thoughts on this decision? Let’s discuss in the comments! 💬

Section 62 of CGST Act, 2017 – Best Judgment Assessment for Non-Filers & Key Judicial PronouncementsSection 62 of the CG...
19/02/2025

Section 62 of CGST Act, 2017 – Best Judgment Assessment for Non-Filers & Key Judicial Pronouncements

Section 62 of the CGST Act, 2017 empowers GST officers to conduct best judgment assessment for taxpayers who fail to file their returns despite notices. However, if the taxpayer submits the pending returns within 30 days, the assessment order is deemed withdrawn.

🔹 Key Judicial Rulings on Section 62:

1️⃣ ITC Adjustment Allowed for Past Years
📌 Tvl. SRP Communications – Madras High Court
(2024) 23 CENTAX 187
✔ Best judgment assessments that denied ITC were set aside for reconsideration in light of legislative amendments permitting belated ITC claims.

2️⃣ Blocked ITC Preventing Return Filing
📌 Amit Metaliks Company – Orissa High Court
(2024) 24 CENTAX 329
✔ Where the taxpayer’s ITC was blocked, leading to non-filing of returns, the court directed authorities to deal with the representation expeditiously before enforcing Section 62.

3️⃣ Natural Justice Violation – MD’s Hospitalization
📌 Tvl. Pearlport Industries India Pvt. Ltd. – Madras High Court
(2024) 88 GSTL 221
✔ Assessment order was set aside, as the taxpayer could not respond due to the Managing Director’s hospitalization. Fresh hearing directed.

4️⃣ Delay Beyond 30 Days – Compliance over Strict Timelines
📌 P. Senthil Kumar – Madras High Court
(2024) 22 CENTAX 428
✔ If a taxpayer eventually complies by filing delayed returns & paying late fees, the delay beyond 30 days should be deemed condoned.

5️⃣ Premature Assessment Without Waiting for Reply Period
📌 S.P.Y. AGRO INDUSTRIES LTD. – Andhra Pradesh High Court
(2021) 44 GSTL 337
✔ When an assessment order was issued without waiting for the statutory reply period, it was held invalid and remanded for reconsideration after hearing the taxpayer.

⚖️ Key Takeaways:
🔹 Courts emphasize natural justice and taxpayer rights.
🔹 Blocked ITC & procedural lapses impact assessment validity.
🔹 Delays beyond 30 days may still be condoned if compliance is met.
🔹 Premature orders without following due process are liable to be set aside.

📢 Compliance with Section 62 requires a balanced approach – procedural fairness is as crucial as statutory adherence.

💬 Your thoughts on these rulings? Share your insights!

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