Fact of the Case: In the given case, the issue pertains to the cancellation of GST registration due to non-compliance by the assessee. A notice was duly issued to the assessee, directing them to file the pending returns and appear before the concerned officer. However, the assessee failed to comply with the notice and did not file returns for a period exceeding six months. As a result, the proper officer proceeded with the cancellation of the assessee’s GST registration in accordance with the law.

The assessee later challenged the cancellation on the ground that the notice and the subsequent cancellation order were not served to them by post at their registered address. Therefore, they claimed to have had no knowledge of the proceedings initiated against them. However, mere non-service by post does not automatically invalidate the service of notice if the same was duly uploaded on the GST portal or served through other valid modes as prescribed under the law. The responsibility also lies on the assessee to regularly check the portal and respond to communications from the department. Non-filing of returns for an extended period and failure to appear despite the notice being issued clearly indicate willful default, justifying the cancellation of registration.

Held by court : In this case, the assessee challenged the cancellation of registration on the ground that the notice and cancellation order were not physically served upon them by post. However, the court held that such a contention was not sustainable under the law.

As per Section 169(d) of the CGST Act, 2017, service of any decision, notice, order, or communication through making it available on the common portal is a legally valid mode of service. The Act does not mandate physical delivery by post as the only means of service. Uploading the notice on the GST web portal is considered sufficient compliance with the statutory requirement of service.

Therefore, the fact that the notice or order was not served by post does not render the proceedings invalid. The assJessee is expected to regularly check the GST portal for any notices or communications from the department. Since the notices and cancellation order were made available on the common portal in accordance with the prescribed mode under Section 169(d), the court concluded that there was no procedural lapse.

Fact of the Case: In the present case, the petitioner, a government contractor engaged in providing works contract services, was served with a demand under Section 74 of the CGST Act, 2017, which deals with tax dues involving fraud, willful misstatement, or suppression of facts. The demand pertained to the Financial Year 2018–19, during which the petitioner failed to pay the differential amount of GST on certain contract receipts.

The petitioner contended that the delay in GST payment occurred because the corresponding amount, including the tax component, was not received from the Public Works Department (PWD). However, the tax authorities rejected this defense, stating that non-receipt of payment from the contractee (PWD) does not absolve the petitioner of the statutory liability to pay GST. It was observed that the obligation to remit tax to the government arises at the time of supply, irrespective of whether the payment from the client has been received.

The authorities concluded that the petitioner had suppressed material facts and failed to discharge GST liability knowingly, and hence, the case attracted the provisions of Section 74, which imposes a higher penalty for fraud or suppression. Accordingly, the impugned order was passed, treating the matter as one involving intent to evade tax, thereby justifying the invocation of Section 74 rather than the general demand provision under Section 73.

Held by court : In this case, while it was established that there was a short payment of GST by the petitioner in relation to the works contract services provided, the court, upon examining the peculiar facts and circumstances, found no element of fraud, willful misstatement, or suppression of facts on the part of the petitioner. The petitioner had explained that the non-payment of GST was due to non-receipt of corresponding payments from the Public Works Department (PWD), which although not a legally valid ground for non-payment, did not reflect any intention to evade tax.

Fact of the Case: In this case, the assessee faced a tax demand for the periods 2017-18 and 2019-20 to 2021-22, following an inspection at its premises. This inspection led to the issuance of notices and subsequent assessment orders by the tax authorities. The assessee, however, did not file appeals within the prescribed time limit under Section 107 of the CGST Act, which allows an appeal to be filed within 3 months (extendable by 1 additional month) from the date of the order.

The assessee tried to file the appeals after a delay of 68 days beyond the maximum condonable period, which the Appellate Commissioner rejected, stating that the law does not permit condonation beyond the prescribed limit.

The assessee then approached the High Court, arguing that it had strong documents and records to prove that the assessment orders were baseless. More importantly, the assessee claimed that there was a serious violation of the principles of natural justice, as it was not given any opportunity to submit documents or be heard before the orders were passed.In essence, while the delay was beyond the legal limit for appeal filing, the assessee sought relief on the grounds of fairness and lack of opportunity to present its case during the assessment.

Held by court : In this case, after hearing both parties and reviewing the assessment orders, the High Court observed that the assessee had not been given a fair opportunity to present its case, which amounted to a violation of the principles of natural justice.

To ensure justice, the Court decided that the assessee should be given a fresh opportunity to respond to the tax demands. However, to balance the interests of the Revenue, the Court directed that the assessee must deposit an additional 15% of the disputed tax amount, over and above the 10% already deposited at the time of filing the original appeals.

Upon such deposit:

• The impugned assessment orders would be set aside (quashed).
• The assessee would be allowed to submit replies to the original show cause notices, treating the quashed assessment orders as addendums to those notices (i.e., additional grounds or details).
• The tax department (respondent authority) would then be required to pass fresh, reasoned orders after considering the assessee’s reply and following due process.
• This remedy ensured that the assessee was not denied a proper hearing and at the same time protected the interest of the tax authorities through a partial deposit.

Fact of the Case: In this case, the petitioner was an exporter engaged in the supply of goods to overseas customers and had paid Integrated GST (IGST) on such exports. Subsequently, the petitioner filed a refund claim for the unutilized Input Tax Credit (ITC) under the provisions applicable to zero-rated supplies under Section 16 of the IGST Act, 2017.

However, the Revenue rejected the refund claim on the ground that the petitioner had not fulfilled the conditions required for a supply to be treated as zero-rated. This implies that the authorities questioned the export’s eligibility for zero-rating, which is a prerequisite for claiming ITC refunds on exports.

The core issue revolves around whether the petitioner’s exports genuinely qualify as zero-rated supplies. If they do, the exporter is entitled to claim a refund of unutilized ITC. The rejection by the department indicates that there may have been deficiencies in documentation, procedural compliance, or evidentiary proof of goods leaving India, which are necessary to establish a transaction as a valid export under GST law.

Held by court : In this case, the petitioner had exported goods and paid IGST on such exports, thereby fulfilling the condition of zero-rated supply as defined under Section 16 of the IGST Act, 2017. As per the provisions of the law, exports are treated as zero-rated supplies, and exporters are eligible to claim refund of unutilized Input Tax Credit (ITC) under Section 54 of the CGST Act, 2017.

Since the petitioner did not claim a refund of the IGST paid but instead claimed a refund of accumulated unutilized ITC, the refund claim was fully permissible under the law. The method of calculating such refund is governed by Rule 89 of the CGST Rules, 2017, which lays down a specific formula for determining the refundable amount based on the proportion of zero-rated turnover to total turnover.

Therefore, the rejection of refund by the Revenue was not legally sustainable. Given that the export qualifies as a zero-rated supply and the petitioner followed the correct procedure, the refund of unutilized ITC should have been allowed and calculated strictly in accordance with Rule 89, ensuring compliance with both the CGST Act and the Rules framed thereunder.

Fact of the Case: In this case, the assessee was functioning as a GST consultant, and was implicated in a massive fake ITC fraud uncovered by the Directorate General of GST Intelligence (DGGI). The investigation revealed that 54 fictitious firms were created and operated by a person named Sehgal and his associates, and these entities were used to fraudulently avail and pass on Input Tax Credit (ITC) without actual movement of goods.

It was alleged that the assessee, acting as a consultant, facilitated the creation and operation of these bogus firms by providing technical and procedural support, thereby enabling the fraudulent transactions. Based on this involvement, the DGGI issued a show cause notice and ultimately imposed a penalty under Section 122(1A) of the CGST Act, 2017, which relates to aiding or abetting the commission of tax fraud. The penalty was equivalent to the amount of ITC fraudulently availed, amounting to Rs. 285 crores.

Additionally, the assessee was also subjected to further penalties of Rs. 75,000 each under Section 122(3)(a), (d), and (e) for specific contraventions, such as failing to maintain proper records and furnishing incorrect information, and another Rs. 75,000 under Section 125, which deals with residual penalties for contravention of any provisions where no separate penalty is prescribed.

This case highlights the serious consequences faced not only by the beneficiaries of fake billing but also by intermediaries or consultants who knowingly facilitate such fraudulent activities. It underscores the wide reach of penalty provisions under the CGST Act for those involved, directly or indirectly, in GST evasion.

Held by court : In this case, the assessee, a GST consultant, was found to be actively involved in enabling and facilitating the creation of fake firms used for fraudulent availment of Input Tax Credit (ITC). Evidence indicated that the assessee was fully aware of the nature of the transactions and knowingly assisted Sehgal and his associates in establishing and operating these non-existent entities.

Fact of the Case: In this case, the petitioner, who owned a hotel property, had rented out rooms to the Police Department of the Government of Jammu and Kashmir for accommodating Central Security Forces deployed for maintaining law and order in the region. The rental rate was fixed by the government at Rs. 300 per room per day in the year 2013—prior to the implementation of the Goods and Services Tax (GST) regime in 2017.

Following the introduction of GST and in light of Notification SO 390 of 2022 issued by the Jammu and Kashmir Government, the renting of immovable property (whether residential or commercial) came to be classified as a supply of service, thereby attracting GST. Accordingly, the GST authorities raised a demand on the petitioner for tax payable on the rental income.

The petitioner did not dispute the GST liability on the rent received. However, it was argued that since the rent amount of Rs. 300 per room per day had been fixed long before the GST regime came into effect, the GST amount payable should be over and above this rent and must be reimbursed or borne by the Government. In other words, the petitioner sought that the rental rate should not be treated as inclusive of GST, and the government should pay the GST separately in addition to the agreed rental.

This case primarily deals with whether the fixed rent agreed upon prior to GST should be treated as inclusive or exclusive of tax, and whether government departments availing such services are obligated to pay GST separately when they reimburse or fix payments for services under old contractual arrangements.

Held by court : In this case, following the implementation of the GST regime through the Central Goods and Services Tax (CGST) Act and the Jammu & Kashmir GST Act, the rental income earned by the petitioner and other hoteliers—who had leased out their hotel rooms to the Department of Home, Government of Jammu & Kashmir for accommodating Central Security Forces—became taxable at the rate of 12% under GST.

Although the room rent was fixed by the government based on recommendations of the Rent Assessment Committee, it was held that such rent does not include the GST component. Hence, GST is to be charged over and above the fixed rental amount.

Accordingly, the Department of Home is liable to reimburse the GST amount separately, in addition to the agreed per day rent. The hotelier (petitioner) is required to issue invoices indicating both:

• The base rent as fixed by the government, and

• The applicable GST on that rent

Once collected, the GST amount must be deposited by the petitioner with the GST authorities as part of their statutory obligation for supply of taxable services.

The court clarified that since the use of hotel accommodation for security forces constitutes a taxable supply, the burden of GST should not fall on the hotel owner alone, especially when the rent was determined before GST was introduced. Thus, the Department of Home must pay the prescribed GST in addition to the rent, ensuring compliance with the law and fair treatment to service providers.