GST Judicial Precedents

by Madhukar N Hiregange, Sudhir V. S., Anil K. Bezawada, Venkata Prasad P

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CONTENTS

CHAPTER 1 — INTRODUCTION AND GST OVERVIEW

Preface	iii
About the Book	vii
About the Authors	ix
1.1 Introduction	3
1.2 Tax and Levy	3
1.2.1 Term “Tax� and “Taxes�	3
1.2.2 Tax and Fees	4
1.2.3 Power to levy tax	6
1.3 Concept & Legal Framework of GST	7
1.3.1 Key Features of the Model	8
1.3.2 Overview of GST Law	9
1.3.3 Payment of Taxes under Respective Heads	12
1.3.4 Advantages of GST	13
1.3.5 Taxes Subsumed Under GST	14
1.4 Judicial View on Critical Aspects of GST	17
1.5 Case Laws under Erstwhile Laws	23

CHAPTER 2 — LEGAL REMEDIES AVAILABLE UNDER GST

2.1 Introduction	27
2.2 Legal Remedies under GST law	28
2.2.1 Adjudication – Ascertaining the demand (Section 73/section 74)	28
2.2.2 Appeals:	29
2.2.2.1 Appeal to First Appellate Authority (Section 107)	30
2.2.2.2 Appeal to Appellate Tribunal (Section 112)	31
2.2.2.3 Appeal to High Court (Section 117)	31
2.2.2.4 Appeal to the Supreme Court (Section 118)	32
2.2.2.5 Constitutional Remedies	32
2.3 Principles while pursuing legal remedies	35
2.3.1 Only the aggrieved party can seek legal remedies	35
2.3.2 Time Limits	35
2.3.3 Pre-deposits	36
2.3.4 The case cannot be re-opened based on a decision on another person’s case	36
2.3.5 The order becomes final if not appealed against	36
2.3.6 Recovery follows the final orders	37
2.3.7 Principles of Natural justice should be followed	37
2.3.8 Jurisdiction	38
2.3.9 Judicial Discipline	38
2.3.10 Not on assumptions/inferences	38
2.3.11 Reasoned & speaking order	39
2.3.12 Res judicata	41
2.3.13 Res Integra:	41
2.3.14 Doctrine of Merger:	41
2.3.15 Effect of Setting aside the orders	42
2.3.16 Circulars issued by Board/Government	43

CHAPTER 3 — PRINCIPLES OF INTERPRETATION

3.1 Introduction	47
3.1.1 Purpose	47
3.2 Internal and External Aids of Interpretation	48
3.1.2 Statutory Interpretation as understood by Theorists	48
3.2.1 Internal Aids	48
3.2.2 External Aids	50
3.2.3 Relevancy of General Clauses Act in Interpretation	52
3.3 Fundamental Principles of Interpretation	53
3.3.1 Legislative Competence to levy	54
3.3.2 Elements of proper levy	55
3.3.3 Standard Principles of Interpreting a Taxing Statute	57
3.3.4 Principle of Plain Meaning (Literal Construction)	58
3.3.5 Purposive Construction (Intention of Legislature)	62
3.3.6 Doctrine of Casus Omissus	67
3.3.7 Mischief Rule	42
3.3.8 Principle of Harmonious Construction	69
3.3.9 Doctrine of Beneficial Construction	72
3.3.10 Strict Construction of Penal Statutes	74
3.3.11 Strict and liberal Construction of a Procedural Notification	75
3.3.12 Interpreting Transitional Provision	76
3.4 General Principles and presumptions in Interpretation	77
3.4.1 Rule of Ejusdem Generis	77
3.4.2 Presumption that Act operates prospectively	80
3.4.3 Presumption against repeal by implication	82
3.4.4 Act should be read as per updated conditions	83
3.4.5 Same proposition used in different statutes – Aspect Theory	83
3.5 Use of Punctuations in Interpretation	84
3.6 Interpretation of Words Unidentified in the Statute	85
3.6.1 “Shall� and “May�	85
3.6.2 “Explanation� and “Proviso�	86
3.6.3 Definitions	87
3.6.4 “As far as possible�	87
3.6.5 “Bonafide Mistake�	87
3.6.6 “In relation to�	88
3.6.7 “In respect of�	88
3.6.8 “Not less than�	89
3.6.9 “Reasonable Time�	89
3.6.10 “Going Concern�	89
3.6.11 “Slump Sale�	90
3.7 Doctrine of Precedent	90
3.7.1 Ratio Decidendi	91
3.7.2 Obiter Dictum	92
3.8 CONCLUSION	93

CHAPTER 4 — LEGAL MAXIMS WITH PRACTICAL EXAMPLES

4.1 Introduction	97
4.2 Maxims – Illustrated and Classified	99
4.2.1 Ab Initio	100
4.2.2 Actio Personalis Moritur Cum Persona	101
4.2.3 Actus Non Facit Reum Nisi Mens Sit Rea	101
4.2.4 Audi Alterem Partem	103
4.2.5 Actori incumbit onus probandi	104
4.2.6 Actus Reus	105
4.2.7 Actus Curiae Neminem Gravabit	105
4.2.8 Cursus Curiae Estlex Curiae	106
4.2.9 Caveat emptor	106
4.2.10 De Facto	107
4.2.11 De Minimis Non Curat Lex	107
4.2.12 Delegatus Non-Potest Delegare	108
4.2.13 Discretio est discernere per legen quid sit justum	109
4.2.14 Ejusdem Generis	109
4.2.15 Ex Post Facto	110
4.2.16 Expressio Unius Est Exclusio Alterius	111
4.2.18 Ignorantia juris non excusat	113
4.2.19 In Absentia	113
4.2.20 Interpretare et concordare leges legibus est optimus interpretendi modus	114
4.2.21 Leges Posteriores Priores Contrarias Abrogant	114
.2.22 Lex Non Cogit Ad Impossiblia	114
4.2.23 Locus Standi	115
4.2.24 Modus Operandi	117
4.2.25 Mutatis Mutandis	117
4.2.26 Nemo Debet Esse Judex in Propria Sua Causa (‘nemo judex in causa sua’)	118
4.2.27 Nemo Debet BisVexari (Pro Una Et Eadem Causa)	119
4.2.28 Non-Obstante	119
4.2.29 Noscitur a Sociis	120
4.2.30 Obiter Dicta	122
4.2.31 Pari Materia	123
4.2.32 Per Incuriam	123
4.2.33 Res Integra	123
4.2.34 Sublato Fundamento Cadit Opus	124
4.2.35 Ubi Non Est Principalis Non Potest Esse Accessorius	124
4.2.36 Ubi Jus Ibi Remedium	124
4.2.37 Vigilantibus et non dormientibus jura sub veniunt	124
4.2.38 Commodum Ex Injuria Sua Memo Habere Debet	125
4.2.39 Sub Silentio	125
4.2.40 Reformatio In Peius	126
4.3 Conclusion

CHAPTER 5 — CONSTITUTIONALITY

5.1Introduction	132
5.1.1 Taxing Entries under Central Tax	135
5.1.2 Taxing Entries under State Tax	137
5.1.3 Taxing Entries under Concurrent Tax	138
5.1.4 Definitions under GST inserted through the Constitution	143
5.2 Constitutional mandate and limitations under GST Law	144
5.2.2 Constitutional Limitation	145
5.2.2.1 Fundamental Rights	146
5.2.2.2 Breach of Fundamental Rights	148
5.2.2.3 Constitutional Validity of RBI’s decision to Ban “Merchanting Trade Transaction� – Test of Proportionality	149
5.2.2.4 Inequitable Taxation – principle to compensate injustice	151
5.2.3 Authority to levy and Transitional Provision	152
5.2.3.1 Challenging the vires of Rule 117	152
5.2.3.2 Upholding the vires of Rule 117	154
5.2.3.3 Constitutional Validity of the Retrospective Amendment	154
5.2.4 Constitutional Limitation on Provisional Attachment of Bank Account	156
5.2.5 Constitutional Limitation on Blocking Credit Ledger under Rule 86A	157
5.3 Constitutional Validity Upheld in GST	159
5.3.1 Constitutional validity of GST (Compensation to States) Act, 2017	159
5.3.2 Constitutional Validity of the Savings and Repeal Clause	163
5.3.3 Constitutional Validity of Demand and Recovery in GST	165
5.3.4 Split views on constitutional validity of Section 13(8)(b) – Intermediary Services	168
5.3.5 Constitutional validity of Rule 96(10)	170
5.3.6 Constitutional Validity of GSTR-3B as a return	171
5.3.7 Constitutional Validity of Rule 89(5) – Refund under Inverted Duty Structure	173
5.4 Constitutional Validity challenged in GST	175
5.4.1 Levy of IGST on Ocean Freight ultra vires the Constitution	175
5.4.2 Detention of vehicle on alleged “wrong destination� when all documents carried ultra vires the Constitution	178
5.4.3 Constitutional Validity of Rule 31A(3) of CGST Rules	179
5.4.4 Constitutional validity of mandatory deduction of 1/3rd land value	180
5.5 Possible Areas to Challenge Constitutionality	182
5.5.1 Constitutionality of Arrest and Prosecution under GST	182
5.5.2 Constitutional Challenges for Restriction in Availing ITC	183
5.5.3 Constitutional Validity of Section 16(4)	186
5.5.4 Constitutional Validity of Blocked Credits under Section 17(5)	188
5.6 Landmark Decisions under the Erstwhile Law	189

CHAPTER 6 — LEVY AND COLLECTION

6.1 Introduction	191
6.2 The decision regarding the levy of GST	191
6.2.1 Constitutional Validity of Compensation Cess Act	191
6.2.2 The constitutional validity of Section 13(8)(c) of IGST Act, 2017(Place of supply for an intermediary)	193
6.2.3 Nature of tax – CGST + SGST or IGST	196
6.2.4 Levy of GST on liquor license	198
6.2.5 C-Forms issued for High-Speed Diesel [HSD]	198
6.2.6 Levy of GST on Ocean Freight	199
6.2.7 Whether notification of one State can be subjected to judicial scrutiny of a High Court beyond its Territorial Jurisdiction of that State?	200
6.2.8 Levy of Market Fee	201
6.2.9 Levy of Tax on supplies made by or to Duty-Free Shops	201
6.2.10 Levy of Advertisement Tax	204
6.2.11 Levy of Entertainment tax	205
6.2.12 Deferred payment of VAT for Sick Industries	206
6.2.13 Validity of levy of 1% of court fees on the filing of appeal before Appellate Authority under GST in the State of Kerala	206
6.2.14 Validity of deemed 1/3rd land deduction	207
6.2.15 Exclusion of Ice Cream Manufacturers from Composition scheme	208
6.2.16 Customs duty does not include Integrated Tax	209
6.2.17 Levy of IGST on import of Oxygen Concentrators	210
6.3 Cases pending under GST	212
6.4 Possible Areas of disputes in GST	213
6.4.1 The constitutional validity of Notifications and Circulars levying GST on development rights before 01.04.2019 on the landowner:	213
6.4.2 The constitutional validity of Notifications and Circulars levying GST after 01.04.2019 on development rights on unsold stock on the date of issue of completion certificate under reverse charge mechanism on the developer	213
6.4.3 Levy of GST on Extra Neutral Alcohol	214
6.4.4 Levy of GST on royalty paid to Government for giving the right to extract natural resources	214
6.5 Case Laws relating to Levy & Collection in pre-GST regime	215
6.6 Decisions are given under Foreign GST Law and its relevancy to Indian GST	227
6.6.1 Taxability of Amounts Collected by Development Councils:	228
6.6.2 Taxability of samples distributed for marketing:	228
6.6.3 Taxability of unused air tickets on account of non-travel by passenger:	228

CHAPTER 7 — MEANING AND SCOPE OF SUPPLY (TAXABLE EVENT)

7.1 Introduction	230
7.2 Decisions under GST Law	231
7.2.1 Reciprocity of obligations is necessary to make a supply. Damages in contrast to ‘consideration’:	231
7.2.2 Actionable claim:	233
7.2.3 Long-term lease equivalent to a sale of land?	236
7.2.4 Supplying instruments/equipment to unrelated parties without consideration is a ‘supply’ or not?	237
7.2.5 The supply of goods by the charitable trust is a business activity carried out for pecuniary benefits	237
7.3 Pending for decisions before HC/SC	238
7.4 Possible areas of disputes under GST	238
7.4.1 Works contract – whether a supply of ‘goods’ or ‘services’:	238
7.4.2 Notice pay recovery collected by an employer from an employee:	238
7.4.3 Amounts collected by clubs/associations from its members:	239
7.4.4 Discounts and incentives:	239
7.4.5 Liquidated damages:	241
7.5.1 The inclusive definition of ‘Supply’:	242
7.5 Decisions VAT, CE, ST, Allied Laws relevant to GST:	242
7.5.2 ‘Barter’	243
7.5.3 Exchange:	243
7.5.4 Definition of ‘Goods’:	243
7.5.5 Definition of Service:	246
7.5.6 Definition of consideration:	249
7.5.7 Definition of ‘Person’:	252
7.5.8 Definition of Business:	254
7.5.9 Sharing of expenses:	256
7.5.10 Notice pay recovery:	257
7.5.11 ‘Gift’:	257
7.5.12 Agency relationship:	258
7.5.13 Transfer:	260
7.5.14 Land and buildings:	260
7.5.15 Process – meaning:	260
7.5.16 Renting of Immovable Property:	264
7.5.17 Construction of Complex, Building, Civil structure:	268
7.5.18 Temporary transfer of IPR:	271
7.5.19 Information Technology Software:	271
7.5.20 Transfer of right to use:	272
7.5.21 Toleration to an act or refrain from an act:	276
7.5.22 Works Contract Service	278
7.5.23 Restaurant Service:	281
7.5.24 Club or association to its members:	282
7.5.25 Employer & Employee:	282
7.5.26 Land and Buildings:	284
7.5.27 Actionable claim:	284
7.5.28 Taxability of Venture Capital Funds	285
7.5.29 Taxability of convenience fees	285
7.5.30 Taxability of interchange fees	285
7.5.31 Taxability in case of merging of companies	286
7.5.32 Taxability of sale of services	286
7.5.33 Taxability of job work services	286
7.6 Decisions given under Foreign GST Law and its relevancy to Indian GST:	287
7.6.1 Taxability of goods supplied free of cost against vouchers	287
7.6.2 Taxability of compensation received from the local authority for discontinuation of milk production –	287
7.6.3 Taxability of retention of deposit money by the hotel on account of cancellation of the booking –	288
7.6.4 Taxability of putting business assets for personal use and input tax reversal	288

CHAPTER 8 — CLASSIFICATION, COMPOSITE AND MIXED SUPPLY

8.1 Introduction: 289	289
8.2 Decisions under GST Law 290	290
8.3 Possible area of a dispute under GST 308	308
8.4 Old decisions relevant to GST - VAT, CE, ST, Allied Laws 310	310
8.4.1 Explanatory Notes to the HSN:	310
8.4.2 Rules of Interpretation:	311
8.4.4 Constituent material:	320
8.4.5 Expert Opinion:	320
8.4.6 Dictionary meaning:	320
8.4.7 Classification by ISI Specification:	321
8.4.8 Classification beneficial to the assessee:	321
8.4.9 Long-standing classification not to be changed	322
8.4.10 Works Contract:	322
8.4.11 Software:	325
8.4.12 Others	326
8.5 Decisions are given under Foreign GST Law and its relevancy to Indian GST	333

CHAPTER 9 — EXEMPTIONS UNDER GST

9.1 Introduction & Provisions	338
9.1.1 Certain service exemptions given in GST regime 344	326
9.2.1 Applicability of exemption to charges collected along with charges for transmission and distribution of electricity	362
9.2 Judicial pronouncements under GST	362
9.2.2 Exemption applicability to exercise books	363
9.2.3 Exemption applicability to chilling and packing of milk done by contractors to milk dairies	364
9.2.4 Duty of customs doesn’t refer to Integrated tax (IGST)	366
9.2.5 Exemption on supply of branded rice is not available even if the brand is unregistered	367
9.2.6 Renting of immovable property to Backward Classes Welfare Department is exempt from GST	368
9.2.7 Contributions to Residential Welfare Associations (RWA) in excess of INR 7,500 per member per month shall be liable to GST	368
9.2.8 Constitutional validity of removing exemption to services of auto rikshaw through Electronic Commerce Operators	370
9.3.1 Applicability of exemption to RWA’s collecting monthly maintenance of more than Rs.7,500/-	370
9.3 Judicial pronouncements pending before courts in GST regime	370
9.4.1 What is Going concern not defined?	371
9.4.2 ‘In relation to’ has wide meaning assigned to it, Leading to disputes	371
9.4.3 Statutory and sovereign functions of government or Municipality not defined under GST	371
9.4 Possible areas of dispute	371
9.4.4 Transportation of goods by Road	372
9.4.5 Exemption to Services in relation to agricultural produce is service specific not person specific	372
9.4.6 Sale of TDR – Not leviable to GST	372
9.5.1 Exemptions related to health care services	373
9.5 Judicial pronouncements given in earlier law applicable in GST regime	373
9.5.2 Ambulance service cannot be called as rent-a-cab service	375
9.5.3 Exemption given only to theatre or drama artist performance is violation of Article 14?	376
9.5.4 Exemption in relation to services of public libraries	377
9.5.5 Exemptions related training and coaching services	377
9.5.6 Exemption in respect of stage carriage and contract carriage vehicles	380
9.5.7 Agricultural produce inclusions and exclusions:	381
9.5.8 Whether satisfaction of SEZ Act Conditions alone make the assessee eligible for service tax exemption?	383
9.5.9 Service tax Levy on Legal services	385
9.5.10 Exemption of service tax on meter rent, super vision charges and late payment surcharge	386
9.5.11 Accounting methodology cannot dictate or stand in the way of substantive relief that is otherwise available to assessee	387
9.5.12 Exemption under Notification 25/2012-ST for construction services provided to railways, including monorail or metro does not cover only “Indian Railways� but any railway, irrespective of the ownership	388
9.5.13 Service Tax is payable on services provided by HGO as the services provided by them does not amount to a religious ceremony	370
9.5.14 Works Contract service provided to Rajya Krishi Utpadan Mandi Parishad,not meant for commercial purposes is exempt from service tax	390
9.6 Foreign GST pronouncements relevant to Indian GST	391
9.6.1 Exemptions related to health care services	391
9.6.2 Exemption related to transaction in money	397

CHAPTER 10 — TIME OF SUPPLY

10.1 Introduction	400
10.2 Rationale from important Advance rulings under GST	406
10.3 Possible disputes under GST	410
10.3.1 Associated Enterprises	410
10.3.2 When advance received in common for supply of goods and serviceswhich are neither composite nor mixed supply	411
10.3.3 Deposit v. Advance	411
10.3.4 Vouchers	411
10.3.5 Determination of composite/mixed Supply	412
10.4 Decisions in Pre-GST regime	412

CHAPTER 11 — PLACE OF SUPPLY

11.1 Introduction	417
11.1.1 Central Sales Tax Act, 1956	418
11.1.2 Export of Service Rules, 2005 and The Taxation of Services(Provided from Outside India and Received in India) Rules, 2006	419
11.1.2.1 Export of Service Rules, 2005	419
11.1.2.2 The Taxation of Services (Provided from Outside India and Received in India) Rules,2006	419
11.1.2.3 Place of Provision of Service Rules, 2012	419
11.1.3 Provisions under GST	420
11.1.3.1 Definitions	420
11.1.3.2 Nature of Supply under IGST Act	421
11.1.3.3 Place of Supply	422
11.2 Decisions under GST Law	427
11.2.1 Decisions on Movement of Goods	427
11.2.2 Decisions on Zero Rates Supplies	428
11.3 Pending for decisions before HC/SC	429
11.4 Possible area of a dispute under GST	429
11.4.1 Factory Gate Sale	429
11.4.2 Renting of Immovable property v. Storage and Warehousing Services	430
11.4.3 Performance Based Services	432
11.4.4 Intermediary services	433
11.4.5 Section 10(1)(b) v. Section 10(1)(d) of the IGST Act, 2017	439
11.5 Old decisions relevant to GST - VAT, CE, ST, Allied Laws	439
11.6 Decisions given under Foreign GST Law and its relevancy to Indian GST	450
11.7 Old decisions which are not relevant under GST	451

CHAPTER 12 — VALUATION

12.1 Introduction:	412
12.2 Decisions/ruling under GST Law	456
12.3 Pending for decisions before HC/SC	460
12.4 Possible area of the dispute under GST	462
12.4.2 Actual Land deduction instead of 1/3rd notional value	462
12.4.3 Commission v. Discount	462
12.4.4 Deduction of Pure agent v. Inclusion in the value of supply	464
12.4.5 Valuation in case of supply by the employer to employee	464
12.4.6 Charges v. Tax	465
12.4.7 Cum-Tax Value	466
12.4.8 Consideration vis-à-vis Deposits	467
12.4.9 Rules u/s. 15(4) v. Notified supplies u/s.15(5)	467
12.5 Old decisions relevant to GST - VAT, CE, ST, Allied Laws	468
12.5.1 Transaction value	468
12.5.2 Price	470
12.5.3 Valuation in case of free supplies (Gifts)	470
12.5.5 Treatment in case of consideration partly in cash and partly in kind	472
12.5.6 Valuation in case of a barter transaction	473
12.5.7 Valuation in case of subsidies provided by Government	473
12.5.8 Valuation in case of amount incurred by the recipients	474
12.5.9 Price is the sole consideration	475
12.5.10 Reimbursement expenses	477
12.5.11 Tax, Interest and Penalty	479
12.5.12 Charging Section v. Provision for valuation	480
12.5.14 Related Party Transactions	480
12.5.15 Incidental Expenses	481
12.5.16 Valuation in case of Ocean freight:	482
12.6 Decisions given under Foreign GST Law and its relevancy to Indian GST	483

CHAPTER 13 — INPUT TAX CREDIT

13.1 Introduction	486
13.2 Judgments in GST regime	488
13.2.1 Seamless flow of Input Tax Credit	488
13.2.2 Input Tax Credit a vested and indefeasible right –	490
13.2.3 Condition 16(2)(c) - Payment of Tax by the supplier –	491
13.2.4 Payment within 180 days to vendor	493
13.2.5 Time Limit under section 16(4) of CGST Act, 2017	493
13.2.6 Restricted/Blocked Input Tax Credits	494
13.2.7 Input Service Distributor (ISD) v. Cross Charge	497
13.2.8 Transfer of input tax credit between distinct persons	497
13.2.9 Blocking of Credit Ledger under Rule 86A	497
13.2.10 Restoration of ITC to credit ledger	498
13.3 Pending Decisions under GST regime	498
13.3.1 Time Limit under section 16(4) of CGST Act, 2017	498
13.3.2 Challenging the validity of blockage of credit	498
13.3.3 Challenging the validity of Rule 36(4)	499
13.3.4 Challenging the validity of Rule 86A	499
13.4 Possible Areas of Disputes	499
13.4.1 Whether ITC under GST a vested right or concession	500
13.4.2 Eligibility of credit of CGST & SGST of other States -	500
13.4.3 Whether the restrictions provided under section 17(5) of CGST Act is arbitrary and unconstitutional	500
13.4.4 ITC on Plant & Machinery affixed to the earth	501
13.4.5 Rule 36(4) of CGST Rules	501
13.4.6 Rule 86A of CGST Rules	500
13.4.7 Section 16(4) – time limit	501
13.4.8 Section 16(2)(c) – the condition provided is lex non cogit ad impossibilia	502
13.4.9 Receipt of Goods and/or Services – Deemed or only Physical	502
13.4.10 Eligibility of ITC based on TR-6 challan, etc.	502
13.5 Judgements in pre-GST regime	503
13.5.1 Vested Right or a concession	503
13.5.2 Input, Input Services, Capital Goods	504
13.5.3 Meaning – “In the Course of� –	506
13.5.4 Meaning – “Furtherance of� –	506
13.5.5 The understanding of the negative language with non-obstante clause used in section 16(2) of CGST Act, 2017	506
13.5.6 Receipt of goods and/or services, documents for availing credit	507
13.5.7 Impossible condition to avail the credit	508
13.5.8 Availability of input tax credit where supplier issued partial financial credit note	510
13.5.9 Time limit for availment of credit	511
13.5.10 Restricted / Blocked Credits	512
13.5.11 ITC on motor vehicles	513
13.5.12 ITC restriction on Food and Beverages	514
13.5.13 ITC on Plant & Machinery	515
13.5.14 ITC on Construction and Works Contract Services	516
13.5.15 ITC on Personal Consumption	517
13.5.16 ITC on goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples	518
13.5.17 Process Loss and Handling Loss:	520
13.5.18 Statutory mandate v. ITC Eligibility	521
13.5.19 Proportionate/Apportionment of credit	523
13.5.20 Credit in special circumstances and Input Service Distributor	525
13.5.21 Availability of Credit on admitted/accepted liability of tax discharged	526
13.6 Relevant international judgements and references to GST law	526

CHAPTER 14 — REGISTRATION, RETURNS AND PAYMENTS SUMMARY

14.1 Registration	529
14.1.1 Introduction:	529
14.1.2 Judgments in GST regime	530
14.1.3 Migration	530
14.1.4 Cancellation of Registration	530
14.1.5 Advance rulings relating to registration under GST	535
14.1.6 Threshold limit	536
14.1.7 Liability to get registered	536
14.1.8 Location for Registration	537
14.1.9 Possible Disputes that may arise	538
14.1.10 Judgements in pre-GST regime which may be relevant under GST	549
14.1.11 Relevant International Judgments to GST Law	541
14.2 Returns under GST	541
14.2.1 Introduction	541
14.3 Payments under GST	553
14.3.1 Introduction	553

CHAPTER 15 — REFUNDS

15.1 Introduction	558
15.1.1 Refund of Zero-Rated supply	559
15.1.2 Refunds in case of duty-free shops	561
15.1.3 Refund on account of judgment	567
15.1.4 Can excess paid tax be adjusted against future liability?	568
15.1.5 Concept of unjust enrichment	568
15.1.6 Documentary proof to be submitted to pass the test of unjust enrichment	572
15.1.7 Eligibility of Refund vis-à-vis procedural conditions	573
15.1.8 Claiming of refund without first challenging assessment	574
15.2 Various judgements given in GST regime	574
15.3 Pending cases before various authorities	594
15.4 Possible issues in Refunds under GST	595
15.4.1 Refund on capital goods under accumulated input tax credit method	595
15.4.2 Accumulated ITC refund Claim on Zero-rated supplies by SEZ Unit or SEZ unit Developer:	596
15.4.3 Duty Drawback to SEZ Units on DTA procurements	598
15.4.4 Refund of unutilised input tax credit in case of closure of business:	598
15.4.5 Payment under Protest in GST:	599
15.5 Judicial pronouncements given under earlier tax regime relevant to GST	600
15.5.1 Unjust enrichment–When amounts collected on inclusive basis and not refunded to customers:	600
15.5.2 The person who suffers tax incidence has the necessary locus standi to file refund application:	601
15.5.3 Procedural non-compliance cannot make assessee to lose substantive benefit	602
15.5.4 Intention to file appeal – cannot be a ground for withholding refund	603
15.5.5 Taxes collected without authority of law – Time limit for claiming refund:	603
15.5.6 Computation of Time limit for claiming accumulated input tax refund on export of services:	607
15.5.7 Amendment made to time limit for claiming refund cannot be applied retrospectively	608
15.5.8 Time limit computation - Application filed before wrong authority:	609
15.5.9 Direct Nexus between inputs and outputs is required to claim Refund?	609
15.5.10 Delay in sanction of refund – interest accrues after expiry of three months from application date:	611
15.5.11 Interest computation on delay in paymentceases when it is sanctioned to assessee	612
15.5.12 Adjustment of refund against pending demand against which an appeal is pending	614
15.5.13 Time limit for filing refund on account of judgement, decree, order or direction of the appellate authority,tribunal or any court	616
15.6 Landmark judgements of previous regime not relevant in GST:	618

CHAPTER 16 — TRANSITIONAL PROVISIONS UNDER GST

16.1 Introduction	620
16.2.1 Filing of Form Tran-01 after the prescribed due date:	621
16.2 Decisions under GST Law	621
16.2.1 Filing of Form Tran-01 after the prescribed due date:	621
16.2.2 Rectification of the Form Tran-01/02	634
16.2.3 Carry forward of the credit closing balance into GST	636
16.2.4 Conditions to avail the credit on the closing stock as on 30.06.2017	639
16.2.5 The credit of the goods/services in Transit	641
16.2.6 Recovery of Transitional Credit	641
16.3 Pre-GST case laws relevant to GST	642

CHAPTER 17 — INSPECTION, SEARCH AND SEIZURE + E-WAY BILL

17.1 Introduction	649
17.1.1 Inspection, Search & Seizure	649
17.1.2 E-way Bill	649
17.1.3 Summons	650
17.2 Decisions in GST Regime	651
17.2.1 Inspection, Search & Seizure	651
17.2.2 E-way Bill	658
17.2.3 Pending Cases	670
17.2.3.1 E-way Bill	670
17.2.4 Decisions in Pre-GST Regime	671
17.2.4.1 Inspection, Search & Seizure	671
17.2.5 Rationale in AAR	677

CHAPTER 18 — ASSESSMENT AND AUDIT

18.1 Assessment	678
18.1.1 Introduction	678
18.1.2 Assessment under GST Law	679
18.1.3 Principles of Assessment	682
18.1.4 Decisions under GST regime	683
18.1.6 Judgments in pre-GST regime	686
18.2 Audit	690
18.2.1 Introduction	690
18.2.2 Decisions under GST regime	692
18.3 Decisions under pre-GST regime	692
18.3.1 Audit by revenue authorities	692
18.3.2 Can C&AG conduct audit of service tax assessee	693
18.3.3 Special Audit 694	677
18.3.4 Special Audit - Right of hearing to be granted	694

CHAPTER 19 — DEMANDS AND ADJUDICATION

19.1 Introduction	696
19.2 Decisions under GST Law	699
19.2.1 Show Cause Notice – Not uploaded online:	699
19.2.2 Show Cause Notice – Vague & Lacks of detailsand reasoning	702
19.2.3 Intimation in Part-A of Form GSTDRC – 1A:	706
19.2.4 Show Cause Notice – Can the show cause notice be quashed based on jurisdictional errors:	709
19.2.5 Demand Order –Demand letter is just an intimation of demand and not actual recovery action	710
19.2.6 Ex-Parte order passed	711
19.2.7 Two Show Cause notice for same period and same issue permissible?	712
19.2.8 Violation of principles of natural justice	713
19.2.9 Penalty should not be imposed when tax and interest is paid before issuance of SCN –	716
19.2.10 DGGI officers can be termed as Proper Officers under GST?	717
19.2.11 Validity of proceedings under Pre-GST laws after implementation of GST:	719
19.2.12 No recovery without issuance of Show Cause Notice	720
19.3 Pending for decisions before HC/SC	721
19.4 Possible area of dispute under GST	722
19.5 Decisions VAT, CE, ST, Allied Laws relevant to GST	725
19.5.1 Time limits for issuing Show Cause Notice:	725
19.5.2 Pre-Show Cause Notice consultation:	727
19.5.3 Manner of service of notice:	728
19.5.4 Relied upon documents to be served:	730
19.5.5 Violation of principles of natural justice	730
19.5.6 Jurisdiction:	731
19.5.7 Validity of SCN:	731
19.5.8 Extended period of Limitation:	735

CHAPTER 20 — APPEALS AND REVISION

20.1 Introduction	741
20.2 Decisions under the GST Law	743
20.2.1 Violation of principles of natural justice/Unreasoned order	743
20.2.2 Mode of filing the Appeal	747
20.2.3 The time limit for filing the appeal	748
20.2.4 Appealable order 751	751
20.2.5 Certified copy of the order	752
20.2.6 Deemed stay on recovery on payment of mandatory Pre-deposit	753
20.2.7 Payment of Pre-deposit using the balance in the Electronic Credit Ledger	754
20.2.8 Alternative remedy	754
20.2.9 Constitution of GST Tribunal	755
20.3 Possible disputes under GST	756
20.4 Decisions under Pre-GST laws relevant to GST	757
20.4.1 Limitation period[Section 107(1)(2)(4)]	757
20.4.2 Valid serving of order	758
20.4.3 Condonation of delay	758
20.4.4 Power of Commissioner (Appeals) and Tribunal in condoning the delay	759
20.4.5 Mandatory Pre-deposit	761
20.4.6 Binding nature of appeal orders	763
20.4.7 Remand powers for Appellate Authority	763
20.4.8 Tribunal is the final fact-finding authority	765
20.4.9 Tribunal is not having the power to test the vires of a statute	766
20.4.10 Question of law v. Question of fact and Court Jurisdiction	767
20.4.12 Review mechanism:	768
20.4.13 Revisional Authority:	770
20.4.14 Additional evidence/Grounds	770
20.5 Decisions under the Foreign Laws	771

CHAPTER 21 — RECOVERY PROCEEDINGS

21.1 Introduction	776
21.2 Decisions under GST Law	780
21.2.1 Recovery proceedings cannot be initiated before the expiry of the time limit to file an appeal unless it is a self-assessed liability	780
21.2.2 Recovery provisions under GST cannot be invoked without proper assessment	782
21.2.3 Recovery provisions under GST cannot be invoked for the recovery of service tax dues	782
21.2.5 No requirement under the Rule 86A to contain sufficient balance for the purpose of blocking the credit	783
21.2.6 If any Audit or verification is pertaining to Service Tax regime and it results into tax liability then department is rightly eligible to recover it.	783
21.2.7 Debiting taxpayer’s bank account without any intimation is sheer abuse of power	784
21.2.8 Provisions of Insolvency and Bankruptcy Code to prevail	784
21.2.9 State Adjudicating authority is a secured creditor	785
21.2.10 Claim of the department cannot be recovered from the insolvent if it is not the part of the Resolution plan	785
21.2.11 On invocation of a provisional attachment mechanism	786
21.2.12 Effect of Section 83 comes to end as soon as proceedings pending is over	789
21.2.13 Attachment which results in adverse effect on right to business cannot be made	790
21.2.14 Department not entitled to retain the amount collected through cheques during search	790
21.2.15 Bank attachment cease to have effect after expiry of one year	790
21.2.16 Cash Credit account cannot be attached	791
21.2.17 Provisional attachment can be done by Commissioner only – Delegation not warranted	791
21.2.18 Payment of tax in installments is allowed even when the company has defaulted in payment of tax in installments as allowed earlier.	791
21.2.20 In case the liability is self-assessed and paid beyond stipulated time,the interest cannot be deposited in instalment	792
21.3 Old decisions relevant to GST – VAT, CE, ST, Allied Laws	792
21.3.1 Government cannot take extra legal steps to recover tax dues	792
21.3.2 Department can use any of the recovery mechanism provided under the statute unless the statute specifically restricts	793
21.3.3 Refund payable can be adjusted against tax dues	793
21.3.4 Principles of natural justice to be followed before recovery of an amount as arrears of land revenue	794
21.3.5 Assessment ought to have been made before raising the demand on the assessee	794
21.3.6 Bank Recovery cannot be initiated if all the previous communications have been sent at wrong address	795
21.3.7 To recover interest u/s 50, issuance of show cause notice is mandatory	795
21.3.8 Department not entitled to retain the amount collected through cheques by the Department during search	796
21.3.9 Department cannot itself debit PLA	796
21.3.10 Recovery from director	796
21.3.11 Recovery proceedings in case of takeovers	796
21.3.12 Provisions contained in SARFAESI Act, 2002 will have overriding effect on provisions of Central Excise Act, 1944	797
21.3.13 Change of ownership	798
21.3.14 Liability of partner	798
21.3.15 Liabilities of Legal Heir	799
21.3.16 Priority to crown dept	799
21.3.17 Priority in claim over property of the mortgaged goods	800
21.3.18 Liability to pay Government dues cannot be fastened to the Purchaser if entire business is not bought	800
21.3.19 Recovery of Government dues from bona fide purchaser of property of defaulter could not be donewhen no proceedings were pending against original assessee on date of transfer of property	801
21.3.20 Detention of property belonging to the sick companies	801

CHAPTER 22 — OFFENCES AND PENALITIES

22.1 Introduction	802
22.2 Decisions under GST Law	811
22.3 Pending for Decisions before HC/SC	824
22.4 Possible area of dispute under GST	824
22.4.1 Conflict between Sections 129 and 130 of the CGST Act, 2017	824
22.4.2 Conflict between Section 122(1) and 122(2) of the CGST Act, 2017	825
22.4.3 Section 73 v. Section 122 of the CGST Act, 2017	825
22.5 Old decisions relevant to GST - VAT, CE, ST, Allied Laws	826
22.6 Decisions given under Foreign GST Law and its relevancy to Indian GST	836
22.7 Old decisions which are not relevant under GST	836

CHAPTER 23 — ANTI-PROFITEERING

23.1 Introduction:	839
23.1.1 Constitution of the National Anti-Profiteering Authority	840
23.1.2 Standing Committee:	841
23.1.3 Screening Committee:	841
23.1.4 The workflow of NAA	841
23.1.5 Penalty for violation of Anti-profiteering provisions	842
23.1.6 Remedies available against the order of Anti-Profiteering Authority:	842
23.2 Orders were given by NAA	843
23.2.1 Comparison of tax incidence between pre and post-GST regime and passing on the reduced tax incidence or ITC to the customer:	843
23.2.2 Provisions of anti-profiteering attracted if the incorrect methodology is adopted for passing on the benefit of rate reduction	847
23.2.3 Sufficient credit should be available to meet the output liability to affect the reduction in product price:	848
23.2.4 There is no contravention of provisions of section 171, even though the product rate is hiked due to the non-availability of ITC though there is a reduction in GST Rate.	849
23.2.5 Reduction in GST rate should be passed on to each recipient independently.	850
23.2.6 An increase in the base price of the product to compensate for the decrease in GST Rate amounts to Anti-profiteering:	851
23.2.7 Reduction in discount does not amount to profiteering:	854
23.2.8 An increase in price when compared with the Pre-GST regime does not amount to profiteering when there is no decrease in tax rate	856
23.2.9 Denial of ITC due to a product becoming exempt not considered due to Non-filing of ITC-03 (non-reversal of ITC) while examining the Anti-profiteering provisions	856
23.2.10 NAA orders should not be passed beyond principles of natural justice	857
23.2.11 Penalty under section 122(1)(i) cannot be levied for violation of provisions of section 171	858
23.2.12 Absence of Judicial member doesn’t render authority’s composition unconstitutional	858
23.3 Pending Decisions Before HC/SC	860
23.4 Possible grounds based on which Anti-profiteering Authority provisions can be struck down	865
23.4.1 Vague provision & Impossible to comply	865
23.4.2 Provisions of anti-profiteering override principles of Indian Contract Act & settled judgments:	866
23.4.3 Excessive delegation & vulnerable to be struck down as unconstitutional	868
23.4.4 Lack of Judicial member in National Anti-profiteering Authority	869
23.4.5 Lack of proper authority for legislating on anti-profiteering measures	870
23.5 Foreign Judicial Pronouncements relevant to GST	870
23.5.1 Proceeding against Video Ezy for increasing the prices in the name GST:	871
23.5.2 Proceedings against Domaine Homes for charging additional amounts:	871
23.5.3 Proceedings against Claredon Homes (NSW) Pty Ltd for charging additional amounts:	871
23.5.4 Proceedings against Universities and university colleges and halls of residence for collecting additional GST:	871

CHAPTER 24 — AMNESTY SCHEME IN INDIRECT TAXES

24.1 Introduction	873
24.2 Some possible measures to be taken up by Government(Revenue Department) to avoid/minimise the disputes	876
24.3 Snapshot of the SVLDRS	877
24.3.1 Eligibility under the scheme	878
24.3.2 Ineligible declarants	878
24.3.3 Relief under the Scheme	879
24.4 Decided cases under past amnesty schemes	880
24.4.1 Validity	880
24.4.2 Strict construction	880
24.4.3 Liberal Interpretation	881
24.4.4 Eligibility	881
24.4.5 Co-Noticee shall file separate applications	882
24.4.6 Quantification of Benefit	884
24.4.7 Immunity	884
24.4.8 Reopening of proceedings:	885
24.4.9 Amounts paid belatedly do not entitle the scheme and not refundable:	885
24.4.10 Amendments in the applications/discharge certificates:	885
24.4.11 Scope of ‘Appeal pending’	886
24.4.12 Opportunity of being heard shall be given before the application is rejected though the scheme does not provide for it	887