Issue of Forms GST DRC-01 and GST DRC01A 'optional' for Proper Officer issuing order u/s 73 of TNGST Act, 2017

The Madras HC in Vishakha Exports v. Assistant Commissioner1 , while dismissing the writ petition of the Petitioner, held that serving of Forms GST DRC01 and GST DRC-01A before passing an order under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 ("TNGST Act") is 'optional' and not 'compulsory' for the 'Proper Officer'.

The Bench observed that pursuant to the amendment to Rule 142(1A) of Tamil Nadu Goods and Services Rules, 2017 ("TNGST Rules") on and from 15th October, 2020, the expression "proper officer shall' has been amended to "proper officer may", thus making the issue of Form GST DRC-01 (Summary of SCN) and Form GST DRC-01A (Intimation of tax ascertained as payable) 'optional' at the instance of the Proper Officer.

Supply of 'Vouchers' does not amount to goods or services under GST Law

The Karnataka HC in Premier Sales Promotion Pvt. Ltd. vs. UOI & Ors.2, while quashing the ruling of AAR and AAAR, held that the supply of vouchers do not fall under the category of goods or services and is therefore exempted from the levy of tax.

The Court observed that the definition of 'vouchers' under Section 2(118) of the CGST Act, 2017 indicates that vouchers are mere instruments accepted as consideration for supply of goods and services and as such, they have no intrinsic value of their own, therefore,

they would fall under the definition of 'money' given under Section 2(75) of the CGST Act, 2017 and would be exempted from the levy of tax.

No authority with officers to seize cash during search operations u/s 67(2) of GST Act

The Delhi HC in Arvind Goyal v. Union of India & Ors.2, held that the action of seizing currency by the officers under Section 67(2) of the GST Act, 2017 is illegal and without any authority of law.

The Bench observed that the power of seizure under Section 67(2) of the GST Act, 2017 is limited to goods liable for confiscation or any documents, books, or things which are relevant to any proceedings under the said Act. Further, the Court observed that cash does not fall within the category of goods and it is also difficult to accept that cash could be termed as a 'thing' useful or relevant for proceedings under the GST Act.

Interest allowed on refund of bank guarantee encashed/withheld illegally by GST authorities

The Karnataka HC in LM Wind Power Blades (India) Pvt. Ltd. vs. UOI & Ors.4, granted interest on the refund of the bank guarantees illegally encashed by the GST authorities by applying the principles of restitution and by way of compensation on account of loss caused by illegal and wrongful deprivation.

Earlier, the Bombay HC directed the respondents to refund the amount covered under the bank guarantees within a period of four weeks along with interest5. The Assistant Commissioner of Central Tax granted the refund but rejected the interest stating that the terms of Section 56 of the CGST Act, 2017, which contemplates payment of interest on delayed refund (if refund is made under Section 54(5) of the CSGT Act, 2017), would apply only when the refund is not made within 60 days from the date of the order.

The Court observed that the petitioner became entitled to the refund of the amount covered under bank guarantees by the judgment of the Bombay HC and not by virtue of an order passed under Section 54 of the CGST Act, 2017, therefore, Sections 54 and 56 of the CGST Act, 2017 would not be applicable for considering the claim for interest.


1 TS-715-HC(MAD)-2022

2 TS-23-HC(KAR)-2023

3 TS-11-HC(DEL)-2023

4 TS-726-HC(KAR)-2022

5 TS-802-HC-2020(BOM

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