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🔥📛 Failure to consider petitioner’s reply resulted in gross violation of principles of natural justice: HC ➡️ The petitioner received a show cause notice and submitted a reply as required. ➡️ However, the authority claimed that the petitioner failed to submit a reply, which was contrary to the record. ➡️ This led to a violation of the petitioner’s right to defend through the reply and the right to a personal hearing, both of which are principles of natural justice. ➡️ The court held that the authority’s finding was factually incorrect and could not withstand judicial scrutiny. ➡️ Due to the gross violation of natural justice principles, the impugned order was liable to be set aside. ✔️ Telangana HC – OLA Fleet Technologies (P.) Ltd. v. Union of India [WP No. 20611 of 2024] |
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🔥📛 Gujarat HC to examine sanctity of refund denial for not-establishing one-to-one correlation ➡️ A wheat exporter in Gujarat has filed a writ petition challenging the GST Department’s rejection of their refund claim for ITC related to zero-rated supplies made without payment of tax under Bond or LUT from June to October 2021. ➡️ The exporter argues that the requirement of establishing a one-to-one correlation between inputs used and exports made for claiming ITC is not stipulated under the provisions of the GST law, specifically not found in Section 16 and 54 of the Central Goods and Services Tax Act, 2017, read with Section 16 of the Integrated Goods and Services Tax Act, 2017, or in the computation mechanism under Rule 89(4) of the Central Goods and Services Tax Rules, 2017. ➡️ They contend that once all necessary conditions for a refund of ITC in case of zero-rated supplies made without tax payment under LUT are fulfilled, the application for refund should not be rejected on such grounds, and that it is not feasible to bifurcate ITC in the Electronic Credit Ledger into item-wise categories for their business. ➡️ The Gujarat High Court has issued a notice to the GST Department, directing that no coercive action be taken against the exporter during the pendency of the writ. ➡️ The matter has been listed on top of the Board on April 23, 2025. ✔️ Gujarat HC – Louis Dreyfus Company India Pvt. Ltd. Vs. Joint Commissioner (Appeals), GST & Central Excise, Rajkot [R/SPECIAL CIVIL APPLICATION NO. 3030 of 2025] |
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🔥📛 HC: Apartment purchased before construction completion, CC issuance by BDA liable to GST ➡️ Karnataka High Court dismissed writ petitions challenging the collection of GST on installments paid for apartments in Bengaluru Development Authority (BDA) Residential Scheme before construction completion and issuance of the completion certificate. ➡️ The court held that if the transaction occurs before construction completion and consideration is paid (partly or fully) before the completion certificate, it is considered a supply of services requiring GST payment. ➡️ The court referred to Section 7, Schedule II of the CGST Act, 2017 and the SC judgment in Larsen and Toubro Ltd, stating that if an agreement is entered into before construction completion, it is a work contract attracting service tax. ➡️ The assessee applied for apartments still under construction, and part of the sale consideration was paid during construction before the completion certificate, as per the payment schedule and BDA notification. ➡️ The court rejected the argument that taxes and duties should be paid by the tenderer/contractor and dismissed the contention of discrimination, noting that tax exemption was granted for houses purchased in completed form before June 30, 2017. ✔️ Karnataka HC – B G Parameshwara vs Bengaluru Development Authority [WRIT PETITION No. 51001 OF 2019 (BDA)] |
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🔥📛 Order rejecting refund application quashed as payment was voluntary and not towards tax, interest, or penalty: HC ➡️ The petitioner, engaged in manufacturing textile machinery and equipment, availed an Input Tax Credit (ITC) of Rs. 2,48,28,300/- based on 33 Bills of Entry during May 2019 to March 2020. Due to a mismatch between ITC in GSTR-2A and GSTR-3B, they mistakenly believed they had availed an excess ITC of Rs. 40,00,000/- and voluntarily deposited this amount in Form DRC-03. ➡️ During a GST audit in January-February 2024, authorities identified the voluntary deposit but found no corresponding tax liability for the financial year 2019-20. The petitioner clarified the mistake and filed a refund application in Form GST RFD-01. ➡️ The refund application was rejected by the revenue on the ground that the claim was time-barred under section 54(1) of the GST Act, which prescribes a two-year limitation for refund claims. ➡️ It was held that since the amount was not deposited towards tax, interest, or penalty, section 54(1) does not apply. Judicial precedents state that mistaken payments are refundable irrespective of statutory limitations, as their retention violates Article 265 of the Constitution. ➡️ The order rejecting the petitioner’s refund application on the ground of limitation was quashed. The revenue was directed to refund Rs. 40,00,000/- to the petitioner along with applicable interest. ✔️ Gujarat HC – Aalidhra Texcraft Engineers v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 14554 of 2024] |
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🔥📛 Recovery proceedings for erroneous refund to be quashed as Notification No. 54/2018 applies prospectively: HC ➡️ The assessee association imported goods against advance authorization without paying customs duty and IGST, and exported manufactured goods after paying IGST. Revenue issued notices demanding duty by giving retrospective effect to Notification No. 54/2018-Central Tax dated 09.10.2018 from 23.10.2017. ➡️ This notification amended Rule 96(10) of the CGST Rules, 2017, to allow exporters who have received capital goods under the EPCG scheme to claim a refund of the IGST paid on exports. ➡️ The court, based on the rectification order passed in the Cosmo Films Ltd. case, held that Notification No. 54/2018 would apply prospectively with effect from 09.10.2018 only. ➡️ The impugned notices/summons issued on the basis of the retrospective operation of the notification were held to be without jurisdiction and were quashed. ➡️ The amount quantified for the period prior to 09.10.2018 towards the alleged erroneous refund would not survive. The petition was allowed. ✔️ Gujarat HC – Gujarat Dyestuff Manufactures Association v. Union of India [R/SPECIAL CIVIL APPLICATION NO. 4782 of 2021] |
