Goods and Services Tax (GST)

(a) The Petitioner is engaged in trading of ready-made garments which were being transported from Gurgaon to Rae Bareli (Uttar Pradesh) when they were inspected and it was found that the e-way bill was incomplete as Part-B was not available. Consequently, the vehicle was detained for verification and goods were seized. The Department imposed demand of tax and penalty. The Petitioner paid tax and penalty to get the goods released, and also filed Writ Petition (WP) challenging the orders passed by the Department on the ground that it was due to technical glitch that vehicle number could not be registered in part-B of e-way bill, which issue was itself addressed by the Department vide Circular dated March 18, 2018.

The High Court held that the only allegation levelled against the Petitioner leading to seizure of goods was that Part-B of the e-way bill was not filled up and there was no allegation that the goods were being transported without payment of tax. Relying upon VSL Alloys India Pvt. Ltd. vs. State of U.P.1 the High Court directed the Department to refund the amount paid by the Petitioner

Takeaway: Incompleteness of Part-B of e-way bill due to technical glitch does not amount to tax evasion

[M/s Citykart Retail Private Limited Vs The Commissioner Commercial Tax, Writ (C) No. 22285 of 2019, Order dated September 6, 2022 (High Court, Allahabad)]

(b) The Petitioner is engaged in providing works contract services. In addition to Input Tax Credit (ITC) available in its credit ledger, the Petitioner has credit of TDS @ 2% lying as excess credit in its electronic cash ledger and the same does not get adjusted against output liability. Accordingly, the Petitioner filed applications for refund of excess credit lying in electronic cash ledger. Department inadvertently passed favourable order and thereafter, issued endorsement rejecting refund of excess credit lying in excess cash ledger without providing any provision of law, but simply mentioning that due to some technical glitch on GST portal, the request for refund amount is reflected. Thereafter, the Petitioner filed WP challenging the endorsement issued by the Department.

The High Court held that the endorsement issued by Department does not reflect any provision of law under which it has been made or passed and has no statutory force. Hence, the impugned endorsement is bad in law and set-aside. Accordingly, the WP was allowed by setting aside the impugned order and the matters were remanded to the Department to deal with the same afresh after accepting the applications filed by the Petitioner for refund of excess balance in the electronic cash ledger in accordance with law.

Takeaway: Endorsement issued by the Department rejecting refund after previously issuing refund order has no statutory force under GST law

[M/s RK Infracorp Private Limited Vs The Assistant Commissioner of State Tax, W.P. No. 16262 of 2022, Order dated September 9, 2022 (High Court, Andhra Pradesh)]

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1. 2018-VIL-196-ALH

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