GST Insight

Deposit Made Under Protest Should be Considered as Pre-Deposit

Case Law Highlight: Getronics Solutions India Pvt. Ltd. vs Commissioner of Central Tax

Can an appeal be rejected for non-payment of pre-deposit when substantial amounts were already paid under protest during adjudication?

The High Court answered decisively:

✔ Amount deposited under protest must be adjusted towards the mandatory pre-deposit

✔ Appeals cannot be rejected on hyper-technical grounds

Relying on Supreme Court precedent, the Court ensured that form does not defeat substance.

A taxpayer-friendly ruling strengthening access to appellate remedies.

Interest & Penalty in Chit Funds: Not Every Recovery Is Taxable

Case Law Highlight: M/s Ushabala Chits Pvt. Ltd. vs Commissioner of State Tax

Is interest or penalty recovered from defaulting chit subscribers liable to GST?

The High Court held that such recoveries do not constitute consideration for supply.
They arise due to delay in payment, not from a service transaction.

Further, interest and penalty are covered under Entry 27 of Notification 12/2017, which grants exemption.

Outcome:
✔ AAR order set aside
✔ Interest and penalty held non-taxable under GST

A welcome clarification bringing certainty to the chit fund industry.

Case Law Insight:

Stanlee (India) Enterprises Pvt. Ltd. vs Commissioner of CGST, Delhi North (Delhi High Court)

Can a GST refund be denied based on mere allegations — without issuing a Show Cause Notice?

The High Court answered with a clear No.

In this case, IGST refunds for exports were rejected citing alleged excess ITC of an earlier year — even though:

✔ No SCN was issued

✔ No adjudication proceedings were pending

✔ Audit reports confirmed the same

The Court held that refunds cannot be blocked on unadjudicated allegations and directed immediate release with interest.

A strong affirmation that due process is the backbone of GST administration.

Topic: Can Section 74 apply when payment suppression is later proven?
Case Law Insight: M/s Sriba Nirman Company vs Commissioner (Appeals), Guntur

A works contractor delayed filing returns and claimed it was due to non-receipt of payment.
Later evidence showed payments were actually received.

The High Court held:
✔ Withholding facts = wilful suppression
✔ Section 74 applies fully in such circumstances
✔ Penalty and interest naturally follow

A strong reminder that accuracy and transparency are essential in GST compliance — and suppression of facts will be treated seriously.

Topic: Can time spent pursuing Section 161 rectification be excluded for appeal limitation?
Case Law Insight: Arvind Fashion Ltd. vs State of Haryana

The taxpayer first sought correction of an error under Section 161 — a legitimate remedy.
When rectification was rejected, they appealed.
But the appeal was dismissed as “time-barred.”

The High Court intervened and clarified:
✔ Taxpayers acting bona fide cannot be penalised
✔ Time spent pursuing rectification must be excluded
✔ Appeals should not be rejected on technicalities

This ruling strengthens taxpayer rights and ensures procedural fairness in GST adjudication.