Ritesh Arora & Associates

Can GST authorities levy both late fee and general penalty for delayed return filing?

No. The Madras High Court in Prajith Enterprises v. State Tax Officer held that once a specific consequence is prescribed under Section 47 of the CGST Act, an additional general penalty under Section 125 cannot be imposed for the same default.
The Court ruled that imposing both amounts to impermissible double punishment under GST law.

Key observations:
• Late fee is the prescribed consequence for delayed GST returns
• General penalty cannot be imposed for the same default
• Double penalisation is not permissible under the CGST Act
• Separate penalties may apply only for different violations

Can the High Court interfere with a show-cause notice issued under GST law at the initial stage of adjudication?

No. The Allahabad High Court in M/s. Ishan Industries v. Director, DGGI held that disputed facts and evidence must be examined during adjudication and not at the show-cause notice stage.
The Court observed that a show-cause notice only initiates proceedings and does not determine tax liability. Taxpayers must be given an opportunity to rebut evidence and present their case during adjudication.

Key takeaways:
• Judicial interference at the SCN stage is limited
• Disputed facts should be examined during adjudication
• GST liability arises only after proper adjudication
• Principles of natural justice must be followed

Can the High Court extend the statutory limitation beyond 120 days for filing a GST appeal under Section 107 of the CGST Act?

No. The Gujarat High Court in Hariom Industries v. State of Gujarat held that the statutory limitation prescribed under Section 107 cannot be extended beyond 120 days, even in exercise of writ jurisdiction.

The Court observed that Section 107 provides 90 days for filing an appeal along with an additional condonable period of 30 days only. Beyond this outer limit, no appeal can be entertained.

Key observations:
• GST limitation periods are strict and mandatory
• High Courts cannot override statutory timelines under writ jurisdiction
• “Sufficient cause” cannot extend the statutory cap of 120 days
• Taxpayers must regularly monitor the GST portal for orders and communications

Can Input Tax Credit be reversed when authorities ignore GSTR-1, GSTR-3B and GSTR-9 returns?

No. The Calcutta High Court in Shine Pharmaceuticals Ltd. v. Joint Commissioner of Revenue held that ITC reversal is unsustainable where authorities fail to consider statutory GST returns available on the GST portal.
The Court observed that GST is a self-assessment and return-based regime where statutory returns are primary evidence for determining liability. Authorities must properly examine and reconcile GSTR-1, GSTR-3B and GSTR-9 before denying or reversing ITC.

Key takeaways:
• ITC denial cannot be assumption-based
• GST returns are primary evidence under GST law
• Proper reconciliation is mandatory before reversing ITC
• Mechanical confirmation of demands is legally unsustainable

Can GST notices or assessment orders be issued in the name of a deceased taxpayer without serving the legal representative?

No. The Allahabad High Court in Rajvanti Devi v. State of U.P. held that proceedings initiated against a deceased person without issuing notice to the legal representative are void ab initio and unenforceable.
The Court clarified that a deceased person cannot participate in adjudication proceedings and authorities must bring legal representatives on record before continuing any action under GST law.

Key observations:
• Proceedings against a deceased person are legally invalid
• Notice must be served on legal representatives
• Liability can be enforced only against the estate of the deceased
• Failure to provide hearing violates principles of natural justice

Can GST authorities start recovery proceedings before uploading FORM GST DRC-07 on the GST portal?

No — the Madras High Court has held that recovery proceedings cannot be initiated before uploading the summary of the adjudication order in FORM GST DRC-07. In JVS Agencies v. Superintendent, Range-III, Thiruvottiyur Division, Chennai, the Hon’ble Madras High Court observed that uploading DRC-07 is a mandatory procedural requirement under GST law and forms part of electronic communication of demand.

Key Takeaways:
•Recovery proceedings before uploading DRC-07 are procedurally invalid
• Rules 142(5) & 142(6) mandate uploading of DRC-07
•Taxpayer’s right to appeal cannot be defeated by premature recovery
•GST being a system-driven law, portal compliance has legal significance

Can the GST department determine tax liability merely through Form GST DRC-01 without issuing a detailed Show Cause Notice under Section 73?

No — the Gauhati High Court has clarified that Form GST DRC-01 is only a summary and cannot substitute a statutory Show Cause Notice (SCN).
In Md. Shoriful Islam v. State of Assam & Ors., the Hon’ble Gauhati High Court held that failure to issue a proper SCN and provide an effective opportunity of hearing violates principles of natural justice and renders the adjudication order invalid.

Key Takeaways:
▪️ DRC-01 is only a summary of the proposed demand
▪️ Proper SCN under Section 73 is mandatory
▪️ Personal hearing and due process are essential
▪️ Orders passed without valid SCN may be quashed

Can GST authorities re-block the Electronic Credit Ledger (ECL) after expiry of the initial blocking period under Rule 86A of the CGST Rules?

Yes — Telangana High Court has held that re-blocking may be valid when supported by ongoing proceedings and statutory backing.
In M/s. Creative Enterprises v. State of Telangana & Ors., the Hon’ble Telangana High Court observed that Rule 86A is a preventive provision intended to safeguard revenue where Input Tax Credit (ITC) is suspected to be fraudulent or ineligible. The Court upheld re-blocking of the Electronic Credit Ledger where adjudication and demand proceedings were already pending.

Key Takeaways:
•Rule 86A is meant to protect revenue interests
• Re-blocking can be sustained if linked with ongoing proceedings
•Restriction must have nexus with pending demand/adjudication
•Suppression of material facts may affect relief before writ courts
•Repeated blocking without fresh reasons may still face legal scrutiny

Can affiliation and inspection services provided by Universities to colleges claim GST exemption under Notification No. 12/2017-CT (Rate)?

No — Madras High Court has clarified that such services are taxable.
In Bharathidasan University v. Joint Commissioner of GST (ST-Intelligence), the Court held that affiliation and inspection services are regulatory and eligibility verification activities, not services relating to admission or conduct of examination. Therefore, they do not qualify as exempt educational services.

Key Takeaways:
▪️Exemption applies only to admission and examination-related services
▪️Affiliation & inspection services provided to colleges are taxable
▪️Regulatory functions performed by Universities are outside the exemption scope
▪️Important ruling for educational institutions and GST compliance

Can a GST show-cause notice issued in late November be considered time-barred when Section 73 requires issuance “at least three months prior” to the expiry of limitation?

No — the Gauhati High Court has clarified the position.
In M/s. Surya Business Private Limited v. State of Assam & Ors., the Hon’ble Gauhati High Court held that limitation under Section 73 must be computed using the calendar-month rule and the corresponding-date principle under the General Clauses Act. Accordingly, the late-November show-cause notice was held to be within limitation.

Key Highlights:
Limitation prescribed in months must be calculated using calendar months, not by counting days
The corresponding-date rule plays a crucial role in GST limitation computation
The relevant statutory due date (such as annual return due date) is important for determining limitation
This ruling provides clarity for GST show-cause notices issued under Sections 73 & 74

Can payment of tax and penalty during GST interception proceedings stop a taxpayer from challenging the demand later?

No — the Punjab & Haryana High Court has clarified.
In M/s. Deutsche Cars Pvt. Ltd. v. State of Haryana, the Court held that payment of tax and penalty under protest during detention proceedings does not extinguish the taxpayer’s right to challenge the demand under Section 129(5) of the CGST Act.

Key Takeaways:
• Payment under protest ≠ acceptance of liability
• Right to challenge demand remains intact
• Authorities must consider objections and pass a reasoned order
• Ignoring objections violates principles of natural justice