Indirect Tax update from High Court.

 ·       Karnataka High Court  in the case of Toyota Kirloskar Motor Pvt. Ltd, has granted stay on the Show Cause Notice (‘SCN') issued for denying ITC of GST paid on secondment of employees from a foreign entity to an Indian entity.   

 

 

·       Karnataka HC grants ad-interim stay in a writ challenging show cause notice (SCN) seeking to levy GST on salary and other costs incurred by Head Office (HO) alleging that such costs incurred at HO amount to a service being provided to Branch Offices (BOs)

 

·       The Allahabad High Court held that documents submitted by the Petitioner do not prove physical movement of goods and genuineness of transaction. The Court relied on the decision of the Supreme Court in the case of State of Karnataka v. Ecom Gill Coffee Trading Private Limited, 2023-VIL-20-SC to hold that in absence of adequate evidence proving actual physical movement of goods, ITC is not available. Accordingly, the Court dismissed the writ petition.

 

·       The Allahabad High Court in the case of Vivo Mobile allowed added 10 percent to total ITC appearing in GSTR-2A for period February 2020 to August 2020 while filing GSTR-3B of September 2020 . 

 

·       The Allahabad High Court in the case of Vacmet India Limited held that the Revenue could not prove intention to evade tax when there is no levy on intraState stock transfers. Therefore, in absence of any intention to evade tax, the Court quashed the order and allowed the writ petition.  

 

·        Kerala High court in the case of Josco Bullion held that when the issue before the Central GST and the State GST were not one and same. Therefore, the bar thus created under Section 6 will not come into play & hence state GST can open the matter which was not considered by central government.

 

·       Kerala High Court  in the case of Global Plasto Wares, WP(C) No. 33787 of 2023, has held that penalty would be applicable if taxpayer fails to deposit GST collected from customers within 30 days from the due dat

 

·       Karnataka HC in the case of United Breweries grants ad-interim stay in a writ challenging show cause notice  seeking to levy GST on salary and other costs incurred by Head Office (HO) alleging that such costs incurred at HO amount to a service being provided to Branch Offices (BOs)  

 

·       Delhi High Court (HC) upholding the legality of consolidation of proceedings in case where two authorities concurrently initiate investigations. 

 

·       Delhi HC holds Tax Research Unit of the Department of Revenue lacks authority to issue GST circulars.

 

·       Delhi HC held that deficiency memo cannot be issued where refund application is accompanied with documents as per CGST Rules

 

·       Chennai High court in the case of Caterpillar India held that recovery can’t be made directly due to difference in GSTR-1 & GSTR-3B without following the procedure under Rule 88C of the CGST Rules, 2017.

 

·       Madras High court held that GST Council cannot determine classification of goods. 

 

·       Madras High Court in the case of Lenovo India held that time limit of 2 years for filing refund claims under section 54(1) is to be considered directory and not mandatory. The judgment emphasizes the crucial distinction between the use of the terms "may" and "shall" in Section 54(1), indicating a discretionary rather than obligatory nature.

 

·       In the case of K Malathi, the Madras High Court held that Director is not liable for payment of tax amount when it is not determinable that the Company is unable to pay the tax amount during liquidation proceedings. However as per Section 88 (3) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), the Directors can be held liable jointly and severally, when it is conclusively determined that the Company is unable to settle the amount of tax, interest or penalty payable.

 

·       Madhya Pradesh High court held that 30 days to be the reasonable period for filing reply to SCN.

 

·       Andhra Pradesh High court held that unsigned order is not a valid order in the eyes of law.

 

 

·       Rajasthan HC in the case of Shree Cement held that simultaneous SCN on same subject matter by State and Central authorities - Respondents not to pass final orders till next hearing.

 

·       Karnataka HC grants interim-stay to Flipkart Internet in SCN raising huge demand on several grounds

 

·          As per notification No 9/ 2023 the due date to pass order u/s 73 has been extended.

(i)              for the financial year 2017-18, up to the 31st day of December, 2023;

(ii)            for the financial year 2018-19, up to the 31st day of March, 2024;

(iii)           for the financial year 2019-20, upto the 30th day of June, 2024.

Now Allahabad High court in case of Graziano Trasmissioni India Private Limited had provided stay on the SCN issued.