The Honourable Supreme Court of India has delivered many Goods and Services Tax (GST) regime-defining decisions in the year 2023.
This Round-up analytically summarizes the major Apex Court Goods and Services Tax (GST) Judgments of 2023 reported at taxscan.in.
The Supreme Court of India has held that a valid consideration is necessary for a service to be taxable as per section 65(44) of Finance Act, 1994 and dismissed the GST departments’ appeal.
The coram comprising Justice Hrishikesh Roy and Justice Manoj Misra observed that since the assessee had not received any consideration while providing a corporate guarantee to its group companies and would not be a taxable service.
The Input Tax Credit Claim was rejected by the Tribunal and the Karnataka High Court (HC) and finally, the Supreme Court of India, which was presided over by Judge M.R. Shah.
The bench observed that mere production of invoices or even payment to the seller by cheque cannot be said to be sufficient and may not be said to discharging the burden to claim Input Tax Credit, to be discharged under Section 70 of the KVAT.
The order issued by the High Court and the ITAT approving the ITC was declared unsustainable by the Supreme Court (SC), and as such, it is thus quashed and set aside.
A two-judge bench of the Supreme Court on Tuesday granted leave to a Special Leave Petition challenging a judgment delivered by the Orissa High Court on the issue of levy of GST on rental/ lease payments.
Disposing the writ petition, the High Court had held that if the assessee is required to pay GST on the rental income arising out of the investment on which he has paid GST, it is required to have the input credit on the GST, which is required to pay under Section 17(5)(d) of the Central Goods and Services Tax Act.
The Supreme Court has recently held that the appellant has no liability to pre-deposit half the revenue loss, in the absence of a completed assessment to crystallize the tax liability to be released on bail.
The Bench of the Supreme Court Justices Krishna Murari and Ahsanuddin Amanullah also observed that “The same view has been reaffirmed by this court in another similar case, Criminal Appeal No. 523/2023, Anatbhai Ashokbhai Shah Vs. State of Gujarat & Ors.”
It was thus remarked that, “Facts of the present case being identical to the facts of the aforesaid two Criminal appeals, we see no reason to deviate from the view taken in the aforesaid two cases” and held that “Following the reasons given in the said judgment and orders, we are of the considered opinion that appellant is entitled to be granted anticipatory bail without imposing any condition as suggested by Learned Additional Solicitor General.”
The Supreme Court of India upheld the requirement of ‘pre-import condition’ incorporated in the Foreign Trade Policy of 2015-2020 (FTP) and Handbook of Procedures 2015-2020 (HBP) by Notification No. 33 / 2015-20 and Notification No. 79 / 2015-Customs, to claim exemption of Integrated Goods and Services Tax (IGST) and GST compensation cess on inputs imported into India for manufacture of export goods, on the basis of advance authorization (AA).
The Court commented that the introduction of the ‘pre-import condition’ may have resulted in hardship to the exporters, since they could no longer continue with their former business practices of importing inputs, after applying for Advance Authorization, to fulfill their overseas export contractual obligations.
A Division Bench comprising Justice J.B. Pardiwala and Justice Prashant Kumar Mishra of the Supreme Court ruled granted one more opportunity to the respondent-assessee to appear before the concerned authorities for the interrogation.
The bench observed that though the inquiry was pending for 5 years due to non-appearance for the summons issued under Section 70 of the Central Goods and Services Tax Act (CGST), 2017, the supreme court was inclined to grant such relief.
The High Court in its common order had stated that “Petitioners shall appear on or before 11/01/2019 before the concerned Police Station.” However, the Supreme Court disposed of the case in favour of the respondent on the condition that he shall appear before the authorities. Otherwise, the authorities may continue with the issue in accordance with law.
The Supreme Court of India upheld the decision of the Kerala High Court in Shabu George vs State Tax Officer wherein it was held that the Revenue Department cannot seize cash that does not form part of ‘stock in trade’ in a Goods and Service Tax (GST) case.
The Two-Judge Bench comprising Justices BV Nagarathna and Ujjal Bhuyan observed that “We are not inclined to interfere with the judgment and order impugned in this petition. The special leave petition is, accordingly, dismissed.”
The Supreme Court heard the Case of M/s. Safari Retreats Private Limited & Ors. before the bench of Justice Abhay S. Oka and Justice Sanjay Karol. The apex court will determine the Goods and Services Tax (GST) implications of the immovable property in the next hearing.
M/s Safari Retreats is involved in Real estate activities with own or leased property. It includes buying, selling, renting and operating of self-owned or leased real estate such as apartment buildings and dwellings, non-residential buildings, developing and subdividing real estate into lots etc. Also included are development and sale of land and cemetery lots, operating of apartment hotels and residential mobile home sites.
According to the office report from the Supreme Court, the case was scheduled for August 17th, 2023, in order to seek permission for submitting brief written submissions along with a compilation of case law.
The Supreme Court while disallowing the Special Leave Petition (SLP), upheld the order of the Patna High Court wherein held that extraordinary jurisdiction under Article 226 of the Constitution of India cannot be invoked where the assessee has alternate remedies available and the assessee delayed in approaching the appellate authority under section 107 of the Bihar Goods and Services Tax (GST) Act, 2017.
The two-judge bench comprising Justice B V Nagarathna and Justice Ujjal Bhuyan dismissed the Special Leave Petition and held that extraordinary jurisdiction under Article 226 of the Constitution of India cannot be invoked where the assessee has alternate remedies available and he was not diligent in availing such alternate remedies within the stipulated time.
The Supreme Court has recently stayed the order of the Single Judge of the High Court of Karnataka that quashed the 21000 Crore Rupee GST Demand served on Gameskraft.
The Division Bench of Chief Justice of India DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, has called for a response from Gameskraft and scheduled a follow-up hearing in three weeks.
In the High Court order, Justice SR Krishna Kumar asserted that Rummy, whether played online or in physical form, predominantly involves skill rather than chance. As a result of the High Court’s decision, online Rummy games and other digital games on Gameskraft’s platforms were not classified as ‘betting’ or ‘gambling,’ making them exempt from taxation.
In a major relief to M/s Birla Corporation Limited, the Supreme Court rejected the precedential value of ruling that GST Department not to have benefit of extended period of limitation.
A Two-Judge Bench comprising Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “We do not agree with the said contention of learned ASG for the simple reason that those observations have been made in the context of what has been stated by the Tribunal in paragraph 13 of the impugned final order wherein details of as many as five audits for the relevant periods have been noted by the Tribunal and, therefore, in the facts and circumstances of the said case, the Tribunal held that the Department could not have the benefit of the extended period of limitation.”
The Supreme Court of India has upheld the abrogation of Article 370, a constitutional provision that granted special autonomy to the region of Jammu and Kashmir.
The Constitutional Bench presided by Chief Justice D.Y. Chandrachud’s decision reaffirmed the constitutional validity of the government’s move to revoke Article 370 in 2019, has far-reaching implications, touching various aspects of governance, including fiscal policies. Apart from Chief Justice, the bench included Justice Justices Sanjay Kishan Kaul, Sanjiv Khanna, B R Gavai and Surya Kant. The Chief Justice has stated that the Article 370 of the Constitution of India is a temporary provision.
The Supreme Court of India quashed the Show Cause notice and held that penalty under Section 76 of the Goods and Service Tax (GST Act) shall not be levied solely on Incorrect Mentioning of the Category of Service in the Show Cause Notice.
The court observed that the classification mentioned in the first show-cause notice was completely erroneous. Therefore, CESTAT was right in holding that the first show cause was illegal. Elementary principles of natural justice require that the adjudication based on show cause notice should be made only based on the classification stated in the show cause notice. Assessee cannot be subjected to a penalty based on a show cause notice containing a completely erroneous category of service. Therefore, the demand made based on the first show cause notice was illegal.
The two-judge bench of Justice Abhay S Oka and Justice Sanjay Karol found no fault with the reasoning adopted by CESTAT.
In a major relief to Flipkart Internet, The Supreme Court has issued a stay to the rejection of appeals by Patna High Court as non-maintainable for payment of Pre-Deposit for Goods and Services Tax (GST) appeal from Electronic Credit Ledger (ECRL) instead of Electronic Cash Ledger (ECL).
The Two-Judge Supreme Court Bench of Justices B V Nagarathna and Ujjal Bhuyan held that, “Pending disposal of this matter, the observations in paragraphs ‘77 and 78’ of the impugned order shall remain stayed”, while issuing notice to the respondent revenue.
It was observed that “Section 107 of the Central Goods and Services Tax/Bihar Goods and Services Tax Act was not maintainable as the pre-deposit (10 percent) as per Section 107 (6)(b) of the Act, was not complied with by the petitioners.”
THE ASSISTANT COMMISSIONER OF STATE TAX vs SUNCRAFT ENERGY PRIVATE LIMITED & ORS. CITATION: 2023 TAXSCAN (SC) 335
A Two-Judge Bench of the Supreme Court has upheld the Calcutta High Court judgment, rejecting the department’s appeal against the Calcutta High Court decision in Suncraft Energy Private Limited Case, which had held that Input Tax Credit (ITC) of the purchasing dealer cannot be denied by the department solely based on the supplying dealer’s non-remittance of tax.
The High Court of Calcutta had held that the Buyers who comply with the conditions contemplated under Section 16(2) of the Central Goods and Services Tax (CGST) Act and State Goods and Services Tax (SGST) Act, 2017 are eligible to avail Input Tax Credit (ITC) and are not liable for the mismatch or discrepancies in the Goods and Services Tax Return (GSTR) 2A and GSTR 3B due to the default of the seller.
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