Trader's Plea To Cancel GST Registration Unravels ITC Fraud, Delhi High Court Imposes ₹5 Lakh Costs Over Misleading Submissions

In an unusual turn of events at the Delhi High Court, an “innocuous” petition filed by a trader seeking cancellation of its GST registration unravelled fraudulent availment of Input Tax Credit worth lakhs.A division bench of Justices Prathiba M. Singh and Shail Jain thus imposed a cost of ₹5 lakh on the trader, ₹2 lakh of which would go to the Delhi High Court Bar Association, ₹2...

'Taxable Person' Under GST Includes Individual Behind Fake Firms Used To Fraudulently Avail ITC: Delhi High Court

The Delhi High Court has held that where fraudulent availment of tax by a fake firm comes to light, penalties can be imposed on the person behind the bogus operations.A division bench of Justices Prathiba M. Singh and Madhu Jain observed,“When the expression 'taxable person' has to be interpreted, the 'taxable person', so long as it is an identified real person/entity it would be the...

Delhi High Court Upholds Denial Of Cross-Examination By GST Dept Citing Trader's Conduct, Say It's Not An 'Unfettered' Right

The Delhi High Court recently slammed a trader, allegedly involved in clandestine manufacture of pan masala to evade tax and recovery of ₹70 lakh from his premises, for his failure to cooperate in the probe.A division bench of Justices Prathiba M. Singh and Shail Jain in this backdrop upheld the GST Department's order, denying the Petitioner-trader's right to cross-examination. It...

Penalty Paid Under Economic Duress Not Voluntary Admission Of Liability Under GST Act: Tripura High Court

The Tripura High Court recently held that payment of a penalty under economic duress cannot be treated as a “voluntary” admission of liability, and tax authorities remain legally obligated to pass a final, reasoned order under the Tripura State GST Act, 2017. The ruling came in the case of R G Group, a Tripura-based supplier of electrical goods, whose consignment was detained in July...

Communication On Email Address Is Sufficient Service Under Section 169 GST Act: Delhi High Court

The Delhi High Court has held that under Section 169(1)(c) of the Central Goods and Service Tax Act, 2017, a communication sent to an email address provided at the time of GST registration is adequate service of a decision, order, summons or notice or any other communication.A division bench of Justices Prathiba M. Singh and Shail Jain observed,“With respect to Section169 of the Act, this...

GST Department Must Decide Refund Applications Expeditiously, Any Delay Adversely Affects Business: Delhi High Court

The Delhi High Court has called upon the Goods and Services Tax Department to expeditiously process the refund applications filed by registered persons/ entities.A division bench of Justices Prathiba M. Singh and Shail Jain observed, “As per the statutorily prescribed procedure, the refund applications have to be dealt with in a particular manner within the prescribed timelines as per...

Informer Of GST Evasion Cannot Seek Reward As A Matter Of Right: Delhi High Court

The Delhi High Court has prima facie observed that an informer, who apprises the Department about evasion of goods and services tax by an entity, cannot seek reward for sharing such information as a matter of right.A division bench of Justices Prathiba M. Singh and Shail Jain were of the prima facie view that no such right vests in any informer.“In the opinion of this Court, the grant of...

GST Dept Can't Raise Fresh Demand U/S 73 If Explanation Offered By Assessee U/S 61(2) Was Accepted: Delhi High Court

The Delhi High Court has made it clear that Section 61(2) of the Goods and Service Tax Act, 2017 bars further action against an assessee, including any demand under Section 73.For context, Section 61 empowers the proper officer to scrutinize the return furnished by the registered person and inform him of the discrepancies noticed.Sub-section (2) thereof provides that in case the...

Delhi High Court Sets Aside Reassessment Order Against Vedanta; Orders Fresh Consideration After GST Case Over Alleged ₹424-Crore ITC Fraud Closed

In granting relief to Vedanta Limited, the Delhi High Court has set aside an order of the the Income Tax Department for initiation of reassessment action against the Copper manufacturer, over alleged fraudulent availment of Input tax credit worth over ₹424 Crore.A division bench of Justices Prathiba M. Singh and Shail Jain observed that the GST Department had already closed the...

Voluntary GST Cancellation Not Grounds To Freeze Company's Bank Account: Rajasthan High Court

The Rajasthan High Court has directed the Bank of Baroda to de-freeze the account of the petitioner-company, allowing it to use it freely till finally deciding the company's representation, observing that the bank could not freeze the account merely because the company's GST registration was voluntarily cancelled.The bench of Justice Nupur Bhati was hearing a petition filed by a company...

Payment Of Tax Cannot Legalise Unlicensed Activity, GST Registration Doesn't Confer Right To Conduct Business: J&K&L High Court

The High Court of Jammu & Kashmir and Ladakh has held that obtaining registration under the Goods and Services Tax Act, 2017, does not amount to authorisation to conduct a trade or business, nor can payment of tax legitimise an otherwise unlicensed commercial activity.The High Court clarified that taxation statutes and regulatory licensing statutes operate in distinct spheres, and...

TNGST Act | Purchase Tax Cannot Be Levied on Buyer for Seller's Tax Default: Madras High Court

The Madras High Court on Monday held that purchase tax cannot be levied under Section 7A of the Tamil Nadu General Sales Tax Act, 1959 (TNGST Act) on the purchaser merely because the seller failed to pay tax. The bench, comprising Justices S M Subramaniam and Mohammed Shaffiq, clarified the scope of Section 7A in transactions where the vendor has defaulted on tax payments "Having found...