The Week in Tax Law,
Decoded for Practice

An appeal was rejected as time-barred on the footing that the delay was 31 days — beyond the one-month condonable window under Section 107(4) of the CGST Act. The taxpayer had, in fact, filed an electronic reply showing the real delay was only 29 days, well within limits, but the appellate authority's order made no mention of it. The Court recomputed the limitation period strictly under Section 3(35) and Section 9 of the General Clauses Act, 1897 (a "month" runs to the corresponding calendar date, not a flat 30 days), confirmed the true delay was 29 days, and held that ignoring a reply that was already on record is an error apparent on the face of the record.

Credit worth eight invoices was reversed purely because the recipient could not produce lorry receipts, weighment slips and e-way bills. The supplier, however, was registered throughout the relevant period, the invoices carried vehicle numbers, and the supplier had filed returns and paid tax on the very same supplies. The Court found the department had confirmed the demand mechanically, without weighing this cumulative evidence, and remanded the matter for a fresh, holistic examination rather than upholding a blanket denial.

Section 122(1A) of the CGST Act fixes personal penalty on "any person" who retains the benefit of, and directs, specified GST offences — even though that person may not be a "taxable person" in their own right. The Court held this reaches partners of a firm, reasoning that a firm cannot commit fraud without a human hand behind it, and that the provision does not create a new offence — it only names who is liable for offences that already existed — so it can attach to conduct before its 1 January 2021 insertion. This view stands in direct conflict with the Bombay High Court's position that only "taxable persons" can be penalised under this section, a conflict now before the Supreme Court.

Where anticipatory bail was refused but the sessions court still directed the department to give seven days' notice before any arrest, the department argued this amounted to a backdoor blanket protection barred by Supreme Court precedent. The High Court disagreed: the direction was tied to one specific investigation, coexisted with an obligation on the noticees to keep joining the probe, and gave no immunity if they stopped cooperating — so it was a natural-justice safeguard, not a shield against future offences.

The department began coercive recovery even though the taxpayer's statutory window to appeal before the GST Appellate Tribunal ran until 30 June 2026. The Court held that recovery before the limitation period lapses defeats the very purpose of the appellate remedy, and stayed recovery on the taxpayer's undertaking to file its appeal — with the standard 10% pre-deposit — within four weeks.

A penalty exceeding ₹4 crore was imposed under Section 122 without any prior show-cause notice or hearing. The Court quashed it outright as a plain breach of Section 75(4) of the CGST Act and the audi alteram partem principle, while leaving the department free to start proceedings afresh, correctly this time.

A demand of over ₹23 lakh was confirmed after the taxpayer failed to respond to a notice that had only ever been uploaded under the portal's easy-to-miss "Additional Notices" tab — before the portal was redesigned to merge that tab with the main "Notices" view. The Court set the order aside, holding that a technically-available upload is not the same as effective communication, and directed a fresh opportunity to reply and be heard.

Refund claims for unutilised input tax credit — export and inverted-duty cases alike — were rejected as time-barred by applying a February 2019 amendment that shortened the "relevant date" definition, even though the underlying supplies pre-dated the amendment. The Court held the unamended rule (relevant date = end of the financial year) governs claims arising before the amendment, since a procedural tightening cannot retrospectively erase an already-vested right to claim refund.