LATEST GST CASE LAWS: 22.04.2025
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🔥📛 HC: Imposes cost on officer for denying opportunity of personal hearing, ‘contrary’ to Circular ➡️ The Allahabad High Court (HC) found a gross violation of natural justice principles in a case involving the classification of potato products under GST laws. The authorities failed to provide a personal hearing despite the assessee’s specific request, marking ‘NA’ in the relevant column. ➡️ The HC cited a memo from the Uttar Pradesh SGST Office emphasizing the need for a personal hearing before passing an adverse order in adjudication proceedings. The memo highlighted a pattern of officers mechanically following procedures without considering the material on record, leading to frequent violations. ➡️ The assessee, who supplies potato flakes, received a show cause notice proposing to classify potato flakes under tariff heading 2005-2000 instead of 1105-2000 for the period from July 2017 to March 2018. The notice indicated a date for submitting a reply but marked ‘NA’ for the date and time of the personal hearing. ➡️ Despite the lack of a personal hearing, an order creating a demand was passed. The HC decided to remand the case back to the authorities, noting that such conduct unnecessarily increases the court’s burden due to the frequent filing of petitions highlighting violations of natural justice. ➡️ The HC quashed the demand order and allowed the writ petition. It directed that proper training be imparted to officers to handle matters correctly, ensuring adherence to natural justice principles and proper procedural conduct. ✔️ Allahabad HC – Merino Industries Ltd. vs. State of Uttar Pradesh [WRIT TAX No. – 1406 of 2025] |
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🔥📛 Proceedings initiated under Section 74 to be converted to Section 73 to enable benefit under Amnesty Scheme: HC ➡️ The assessee contested the validity of Section 146 of the Finance (No. 2) Act, 2024 and Notification No. 21/2024-Central Tax dated 08.10.2024. The notification extended the waiver of interest and penalty only to notices issued under Section 73 of the CGST Act. ➡️ The assessee also sought to quash a show cause notice issued under Section 74 and the consequential order. During the proceedings, the assessee expressed an intention to avail the benefit of the Amnesty Scheme under Section 128A. ➡️ The impugned order was set aside. The matter was remitted to the tax authorities with directions to treat the proceedings under Section 73 and pass orders under Section 73(9). ➡️ The assessee was held entitled to file an application for the benefit of the Amnesty Scheme. This benefit shall be granted in accordance with the law. ➡️ The petition was allowed. ✔️ Karnataka HC – Sree Balaji Packaging Industry v. Union of India [WRIT PETITION NO. 6425 OF 2025 (T-RES)] |
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🔥📛 Relaxation in eligibility for appointment of Technical Member (State) is available to State Govt. Officers only; and not to officers of All-India Service: HC ➡️ The petitioner, a retired IAS officer, had 25 years of service in Group ‘A’ and had held the rank of Additional Commissioner for over three years. He was involved in the administration of taxation/revenue/finance-related laws, making him eligible for the post of Technical Member. ➡️ On 19-10-2024, a notification was issued by the state government of Himachal Pradesh. It stated that officers from the Sales Tax and Excise Department, who had completed at least 25 years of service as Gazetted Officers in the state, were eligible for appointment as Technical Members (State) in the State Bench. ➡️ The petitioner argued that the notification was premature and ultra vires to the CGST Act. He contended that since Group ‘A’ officers were available in the state, the relaxation of the 25-year service requirement for Group ‘A’ or equivalent officers was not applicable. ➡️ The proviso to section 110(d) of the GST Act allows the state government, on the recommendation of the Council, to relax the requirement of 25 years of service in Group ‘A’ or equivalent. This relaxation is applicable only if no person in the state has completed 25 years of service in Group ‘A’ or equivalent but has completed 25 years of service in the government. This proviso is available to state government officers in Group ‘A’ and not to All-India Service officers. ➡️ Since the relaxation provision is only for state government officers and not for All-India Service officers, the availability of an All-India Service officer does not affect the relaxation. Similar relaxations have been granted in ten other states. Therefore, the petition was dismissed. ✔️ Himachal Pradesh HC – Amit Kashyap v. Principal Secretary, State Taxes and Excise, Govt. of H.P. [CWP No. 15550 of 2024] |
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🔥📛 Entry 5B of RCM notification not applicable on development rights obtained by builder from landowner under development agreement: HC ➡️ The petitioner was appointed as a developer by the owner to develop a plot of land into a multi-storied complex in exchange for monetary consideration and two apartments. The petitioner was issued a notice to pay tax on this transaction. ➡️ The petitioner challenged a subsequent notice claiming GST on the transaction under clause (5-B) of Notification No.13/2017-Central Tax (Rate), as amended by Notification No.5/2019-Central Tax (Rate). This clause pertains to the supply of services by way of Transfer of Development Rights (TDR) or Floor Space Index (FSI). ➡️ The assessee argued that the transaction did not fall within the scope of clause (5-B) because it only covers services supplied through TDR or FSI, as defined under the Unified Development Control and Promotion Regulations for the State of Maharashtra (UDCPR). ➡️ The court held that the expression “transfer of development rights” in conjunction with ‘FSI’ in entry 5B specifically refers to TDR as defined under clause 11.2.2 of the UDCPR. This clause defines TDR as compensation in the form of FSI or development rights, allowing the owner to construct a built-up area subject t the regulations. ➡️ The court concluded that TDR/FSI under entry 5B cannot be related to the rights a developer derives from an owner under a development agreement, where the developer constructs a building for the owner and transfers certain built-up units for consideration. Therefore, the impugned notice and order were set aside. ✔️ Bombay HC – Shrinivasa Realcon (P.) Ltd. v. Deputy Commissioner Anti-Evasion Branch, CGST & Central Excise Nagpur [WRIT PETITION NO. 7135 OF 2024] |
