Maintainability of appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - distinction between a departmental 'letter' and a 'decision' or 'order' - requirement that a decision or order contain findings and reasoning based on evaluation of facts and law - finality of proceedings concluded on deposit of duesMaintainability of appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - distinction between a departmental 'letter' and a 'decision' or 'order' - requirement that a decision or order contain findings and reasoning based on evaluation of facts and law - Appeal against the Letter C. No. IV(6)29/Suresh & Co./AE/SKR/19/1130 dated 14-8-2020 is not maintainable under Section 107(1) of the CGST Act because the communication is a letter and not a decision or order. - HELD THAT: - The Appellate Authority examined whether the communication impugned by the appellant qualifies as a 'decision' or 'order' under the appeal provision. Section 107(1) permits appeal only against a decision or order passed by an adjudicating authority. The impugned letter merely recorded that the appellant had, by his statements and correspondence, agreed to deposit dues and that the case was concluded and goods released; it did not contain findings, discussion of law, or an evaluation of facts and law constituting a determination of rights or obligations. The Authority relied on standard definitions of 'decision'/'order'-which require a judgment or conclusion reached after evaluation of facts and law with reasons-and found the letter devoid of such adjudicatory content. Consequently, the communication does not fall within the scope of an appealable decision or order under Section 107(1), and the appeal is therefore not maintainable. The Authority declined to examine the substantive grounds of appeal for this reason and rejected the appeal. [Paras 6, 7, 8, 9, 10]The appeal is not maintainable and is rejected.Final Conclusion: The Appellate Authority dismissed the appeal for lack of maintainability because the impugned communication was a non-adjudicatory letter and not a decision or order within the meaning of Section 107(1) of the CGST Act, 2017; the substantive grounds were not adjudicated.

Cancellation of registration - deemed suspension of registration pending cancellation - duty to record and consider applicant's reply before rejecting cancellation application - effective date of cancellation to be the date of filing of application - liability to pay tax and other dues unaffected for period prior to cancellationDeemed suspension of registration pending cancellation - duty to record and consider applicant's reply before rejecting cancellation application - Validity of rejection of the appellant's cancellation applications where the appellant had filed an application for cancellation on 17-12-2018 and the registration was deemed suspended - HELD THAT: - The appellant's application for cancellation dated 17-12-2018 (ARN AA081218014364E) is on record and, under the provisions reproduced (first proviso of Section 29 read with Rule 21A), the registration stood deemed suspended from the date of submission pending completion of cancellation proceedings. The adjudicating authority issued a show cause notice and subsequently rejected the cancellation application on the ground of 'response not received' and later on the ground of non-filing/non-payment, but the officer's records and comments did not properly take the appellant's contention and reply into account. Having regard to the appellant's submission, the portal status checks, and the absence of adequate recording of the appellant's reply by the proper officer, the rejection orders were held to be improper. The tribunal observed that the deemed suspension prevented the appellant from issuing invoices or filing returns during the pendency, which was material to the assessment of the correctness of the rejection. [Paras 9, 10]The rejection orders were not proper or correct because the appellant's contention and reply were not properly recorded and considered while the registration was deemed suspended.Effective date of cancellation to be the date of filing of application - liability to pay tax and other dues unaffected for period prior to cancellation - Whether the effective date of cancellation should be fixed as 17-12-2018 and the proper officer directed to consider the cancellation from that date - HELD THAT: - The record establishes that the appellant filed the cancellation application on 17-12-2018 and monitored its status on the GST portal. Given the deemed suspension from the date of application and the long pendency of the proceedings, together with Section 29(3) which preserves liability for tax and other dues for periods prior to the date of cancellation, the appellate authority concluded that the proper officer ought to treat the effective date of cancellation as 17-12-2018. Consequently the appellate authority directed the proper officer to consider the cancellation from the date the appellant first applied, i.e. 17-12-2018. [Paras 11]Proper officer is directed to consider the appellant's application for cancellation with effect from 17-12-2018.Final Conclusion: The appeal is allowed: the rejection orders are quashed as improper for failing to record/consider the appellant's reply while registration was deemed suspended, and the proper officer is directed to consider the cancellation with effect from 17-12-2018, subject to liabilities for tax and other dues for periods prior to that date.

Non-speaking order - principle of natural justice - opportunity of being heard - remand for fresh adjudication - refund of input tax credit on export of services under LUT - Form GST RFD-06/RFD-08 - compliance with Rule 92(3) of CGST Rules, 2017Non-speaking order - Form GST RFD-06/RFD-08 - opportunity of being heard - principle of natural justice - compliance with Rule 92(3) of CGST Rules, 2017 - remand for fresh adjudication - Validity of the Order-in-Original (RFD-06) rejecting the refund claim and whether the appellant was afforded a proper opportunity of being heard - HELD THAT: - The appellate authority found that although the portal status indicated issuance of the show cause notice (RFD-08) and rejection, the appellant was unable to view or download the RFD-08 and RFD-06 from the GST portal and therefore did not receive or reply to the show cause notice nor attend the scheduled personal hearing. Copies were supplied only on the appellant's request by the Commissioner by email on 28-1-2021. The RFD-06 itself shows ambiguity and is non-speaking: it does not specify the amount rejected in the operative portion, omits reference to the statutory provisions under which rejection was made, and contains ambiguous wording in the remarks. In these circumstances the adjudicating authority failed to comply with the requirement of affording a proper opportunity to be heard as mandated by Rule 92(3) of the CGST Rules, 2017 and the decision recorded in RFD-06 lacks reasons and clarity necessary for appellate consideration. Consequently the appellate forum cannot examine the merits without a reasoned order and fresh compliance with natural justice. [Paras 10, 11, 12]RFD-06 is a non-speaking order passed without proper opportunity of being heard; matter is remanded to the adjudicating authority to provide the appellant a proper opportunity, to permit submission of relevant documents, and to decide the refund afresh with a clear, reasoned and speaking order in accordance with law.Final Conclusion: The appeal is disposed by remitting the matter to the adjudicating authority for fresh adjudication: the authority must afford the appellant a proper opportunity of hearing, allow submission of relevant documents, and pass a speaking, reasoned order deciding the refund claim for April, 2020 to June, 2020 in accordance with Rule 92(3) of the CGST Rules, 2017.

Transitional arrangements for input tax credit under Section 140(1) of the CGST Act, 2017 - Concept of eligible duties and scope of Explanation 1/Explanation 2 to Section 140 - Explanation 3 to Section 140 - exclusion of cesses from transition - Furnishing of Form GST TRAN-1 and Rule 117 of the CGST Rules, 2017 - Distinction between cess and tax/duty; cesses not subsumed under GST - Input tax credit as concession not a vested right - CBIC Circular No.87/06/2019-GST - administrative clarification on transition of cessesTransitional arrangements for input tax credit under Section 140(1) of the CGST Act, 2017 - Explanation 3 to Section 140 - exclusion of cesses from transition - Furnishing of Form GST TRAN-1 and Rule 117 of the CGST Rules, 2017 - Distinction between cess and tax/duty; cesses not subsumed under GST - Input tax credit as concession not a vested right - CBIC Circular No.87/06/2019-GST - administrative clarification on transition of cesses - Carry forward of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess through TRAN-1 into the GST regime is not permissible. - HELD THAT: - The adjudicating authority examined Section 140(1) read with its Explanations and Rule 117 TRAN-1 and concluded that transition of unutilised cesses cannot be allowed. Explanation 3 to Section 140 expressly excludes any cess not specified in Explanations 1 or 2 from being treated as eligible for transition. The three cesses claimed were not specified in Explanation 1 or 2 and therefore fall within the exclusion. The authority held that these cesses were not subsumed within the GST levy and had become dead claims (for Education Cess and SHE Cess after their discontinuance) prior to the appointed day; consequently they could not be carried forward as ITC against GST liabilities. The order also applied the principle that input tax credit is a statutory concession which the legislature may curtail by conditions; entitlement to carry forward credit is therefore subject to the specific terms of Section 140 and its explanations. The authority further relied on the statutory scheme, Rule 117 (TRAN-1 requirements), and the legislative/administrative intent reflected in Explanation 3 and the CBIC Circular which recognises that cesses not specified in the Explanations are not to be transitioned. For these reasons the claim to carry forward the impugned cesses was rejected and the demand, interest and penalty in the impugned order were sustained. [Paras 7, 8]Appeal dismissed; impugned Order-in-Original confirmed and carry forward of the specified cesses through TRAN-1 held not permissible.Final Conclusion: The appeal is rejected; the Commissioner's Order-in-Original confirming recovery of the carried forward cesses (Education Cess, SHE Cess and Krishi Kalyan Cess), payment of interest and imposition of penalty is upheld.

Reversal of input tax credit under Section 17(2) - Rule 42 determination of input tax credit attributable to exempt supplies - Rule 89 formula for refund of unutilised input tax credit on zero rated supplies - Adjusted Total Turnover excluding exempt supplies other than zero rated - Net ITCRule 89 formula for refund of unutilised input tax credit on zero rated supplies - Adjusted Total Turnover excluding exempt supplies other than zero rated - Net ITC - Rule 42 determination of input tax credit attributable to exempt supplies - Reversal of input tax credit under Section 17(2) - Whether the refund disallowance relating to August 2018 (on account of alleged non reversal of proportionate ITC for exempt supplies and consequent adjustment of refund) was justified and what recalculation, if any, was required under Rule 89 read with Rule 42 and Section 17(2). - HELD THAT: - The adjudicating authority rejected part of the refund on the ground that proportionate ITC attributable to exempt supplies (value shown as sale of MEIS scrips) had not been reversed under Section 17(2). Rule 89(4) prescribes the refund formula using Net ITC and Adjusted Total Turnover, and Clause (E) of Rule 89(4) excludes value of exempt supplies other than zero rated supplies from Adjusted Total Turnover. Rule 42(1) prescribes the method to determine and reverse ITC attributable to exempt supplies. The appellant produced computations showing ITC exclusively attributable to the exempt MEIS licence (Rs.14,362) and common ITC (Rs.1,951), totalling Rs.16,313, and deposited this amount and interest in the electronic ledger and filed DRC 03. Applying Rule 42, the Commissioner (Appeals) found Net ITC ought to be reduced from Rs.3,431,251 to Rs.3,414,938 (i.e., minus Rs.16,313) and recalculated the refund under Rule 89(4), resulting in a revised refund lower than the originally sanctioned amount. The recalculation yielded a difference of Rs.15,993 which the appellant had already deposited with interest. On this basis the appeal was allowed to the extent that the value of exempt supplies other than zero rated supplies was excluded in computing Adjusted Total Turnover and the refund adjusted in accordance with the Rule 89 formula after accounting for reversal under Rule 42/Section 17(2). The appellant's prior withdrawal/admission regarding the separate ITC amount (not reflected in GSTR 2A) was noted but did not affect the decision on the August 2018 refund recalculation. [Paras 7, 8, 9]Appeal allowed in part: the value of exempt supplies other than zero rated supplies was excluded from Adjusted Total Turnover and Net ITC was reduced by the ITC attributable to exempt supplies (as determined under Rule 42), refund recalculated under Rule 89(4) accordingly; excess amount already deposited by the appellant was recognized.Final Conclusion: The Commissioner (Appeals) allowed the appeal in part by holding that exempt supplies (other than zero rated) must be excluded from Adjusted Total Turnover and that ITC attributable to exempt supplies be reversed under Rule 42/Section 17(2), leading to recalculation of the August 2018 refund under Rule 89(4); the resulting minor excess sanctioned amount was found to have been deposited by the appellant and the appeal disposed accordingly.

Input tax credit entitlement conditional on filing returns - interest under Section 50 for delayed payment of tax - time of supply - tax liability arises on issuance of invoice - penalty under Section 122(2)(b) for wilful misstatement or suppression to evade tax - recovery of tax under Section 74 read with Section 76 and appropriation of deposited amountsInput tax credit entitlement conditional on filing returns - electronic credit ledger - Entitlement of the appellant to set-off/input tax credit for the period August-2018 to March-2019 - HELD THAT: - The Commissioner (Appeals) affirmed the adjudicating authority's conclusion that the appellant was not entitled to avail input tax credit for the period in question because the statutory condition precedent of furnishing returns under Section 39 had not been satisfied. The decision applies the statutory rule that input tax credit is credited to the electronic credit ledger only upon self-assessment in the prescribed return and, therefore, invoices or ledger entries alone do not create an entitlement to set off until the returns are filed; consequently the adjudicating authority correctly did not consider ITC for adjustment against the demand for the period.Claimed ITC for August-2018 to March-2019 cannot be allowed in absence of filing returns; demand may be confirmed without considering such ITC.Interest under Section 50 for delayed payment of tax - time of supply - tax liability arises on issuance of invoice - Liability to pay interest for delayed deposit of tax (including interest for July-2017 to November-2017) and the relevance of non-receipt of payment from customers - HELD THAT: - The authority held that interest under Section 50 is payable from the date the tax was due and that issuance of tax invoices fixes the time of supply (and thereby the tax liability) under Sections 12 and 13; the appellant's plea that non-receipt of payment from customers excused deposit of tax was rejected because invoices were issued and tax was thus due. The Commissioner (Appeals) sustained the order to recover interest on the unpaid tax assessed for Dec-2017 to Mar-2019 and also the specific interest for July-2017 to November-2017 that remained unpaid.Interest under Section 50 is payable on the assessed unpaid tax and the appellant's non-receipt of payment from customers does not relieve it of interest liability once invoices were issued.Recovery of tax under Section 74 read with Section 76 and appropriation of deposited amounts - Confirmation of tax demand for Dec-2017 to Mar-2019 and appropriation of amounts already deposited - HELD THAT: - On examination of records and statements, the Commissioner (Appeals) upheld the adjudicating authority's finding that the appellant had failed to discharge full GST liability for Dec-2017 to Mar-2019 and that the provisions for recovery under Section 74 read with Section 76 were invokable. The amounts already deposited by the appellant were held liable to be appropriated against the confirmed demand as ordered.Demand for tax for Dec-2017 to Mar-2019 is confirmed and deposited sums are to be appropriated against that demand.Penalty under Section 122(2)(b) for wilful misstatement or suppression to evade tax - Applicability of penalty under Section 122(2)(b) for alleged wilful suppression/intent to evade tax - HELD THAT: - The Commissioner (Appeals) agreed with the adjudicating authority that the appellant's continuous failure to file returns and to discharge tax liability, issuance of invoices showing tax, and delayed compliance after initiation of investigation demonstrated contraventions indicative of suppression with intent to evade tax. On that basis the imposition of penalty under Section 122(2)(b) was held to be attracted in the facts of the case.Penalty under Section 122(2)(b) is attracted and the adjudicating authority's imposition of penalty is sustained subject to statutory provisos regarding reduction upon payment within the specified period.Final Conclusion: The Commissioner (Appeals) found no infirmity in the adjudicating authority's order: the tax demand for Dec-2017 to Mar-2019 and interest (including for July-2017 to November-2017) were confirmed, amounts deposited were ordered to be appropriated against the demand, claimed ITC for periods where returns were not filed was disallowed, and penalty under Section 122(2)(b) was upheld; the appeal is rejected and disposed of.

Confiscation of goods under Section 130 of the CGST Act - fine in lieu of confiscation under Section 130(2) of the CGST Act - maintenance of books and stock records under Section 35 read with Rule 56 of the CGST Rules - penalty for failure to maintain books / for dealing with goods liable to confiscation under Section 122(1)(xvi) and (xviii) of the CGST Act - valuation of seized goods for purposes of confiscation and fine - seizure under Section 67 and Rule 139 of the CGST RulesMaintenance of books and stock records under Section 35 read with Rule 56 of the CGST Rules - seizure under Section 67 and Rule 139 of the CGST Rules - confiscation of goods under Section 130 of the CGST Act - Whether the books of accounts/stock register were maintained at the search premises and whether the goods found during search were unaccounted and therefore liable to confiscation. - HELD THAT: - The adjudicator found that the books of accounts pertaining to the assessee were not available at the searched premises but were located at another unit; Section 35 and Rule 56 require maintenance of records at the principal place of business. The absence of records at the searched premises furnished the search team with a reason to believe that goods lying there were unaccounted. The respondent's own submissions were internally inconsistent (at times conceding excess/unaccounted stock and at other times attributing differences to handling loss). The adjudicating authority had released part of the seized goods, but on review the seized goods were held to be unaccounted and thus liable to confiscation under Section 130(1)(ii) and (iv). Because part of the goods had already been released, the reviewing authority imposed a fine in lieu of confiscation under Section 130(2).Seized goods valued at Rs. 4,32,333/- are liable to confiscation under Section 130(1)(ii) and (iv); in view of prior release of part of the goods, a fine in lieu of confiscation is imposed under Section 130(2).Valuation of seized goods for purposes of confiscation and fine - admissions by proprietor and evidentiary weight of purchase invoices - Whether the value of the seized goods as determined by the adjudicating authority was correct. - HELD THAT: - The proprietor had, by letters and statements, accepted and communicated a valuation of the seized goods (Rs. 4,32,333/-). Although the respondent disputed specific item valuation (mica sheets) and produced some purchase invoices suggesting lower rates, the reviewing authority observed that those invoices were few and dated well prior to the search and could not by themselves supplant the proprietor's admissions. The reviewing authority therefore concluded that the adjudicating authority erred in re-determining the total value downward when the proprietor had earlier accepted the higher valuation.The value of seized goods is treated as Rs. 4,32,333/- for purposes of confiscation and fine; the adjudicating authority's lower valuation is set aside.Penalty for failure to maintain books / for dealing with goods liable to confiscation under Section 122(1)(xvi) and (xviii) of the CGST Act - penalty under Section 122(3) for persons dealing with goods known to be liable to confiscation - Whether penalty under Section 122(1)(xvi) and (xviii) is imposable on the assessee (and relatedly whether penalty under Section 122(3) is imposable on the proprietor). - HELD THAT: - Having concluded that records required under Section 35 were not maintained at the searched premises and that goods were unaccounted and liable to confiscation, the reviewing authority held that the statutory prerequisites for penalties under Section 122(1)(xvi) (failure to maintain books) and (xviii) (supplying/transporting/storing goods which the person has reason to believe are liable to confiscation) were satisfied. The authority accordingly imposed penalty on the assessee. The reviewing authority noted submissions by the respondent contesting applicability of Section 122(3) to the proprietor but proceeded to impose penalties on the firm; any amounts already deposited by the assessee were to be appropriated against the imposed sums.Penalty under Section 122(1)(xvi) and (xviii) is imposable on M/s Agarwal Sales; penalty is imposed and amounts already deposited may be appropriated.Final Conclusion: The review allows the departmental appeal in part: the seized goods valued at Rs. 4,32,333/- are held liable to confiscation under Section 130(1)(ii) and (iv) and, because part of the goods had been released earlier, a fine in lieu of confiscation is imposed under Section 130(2); the adjudicating authority's lower valuation is set aside; and penalties under Section 122(1)(xvi) and (xviii) are imposed on the assessee, with any previously deposited amounts to be appropriated.

Summary order. Appeals filed by the appellant against rejection of refund claims are allowed to be withdrawn on appellant's request and both appeals are dismissed as withdrawn.

Confiscation under Section 130 of the CGST Act - Seizure under Section 67 and Rule 139 of the CGST Rules - Maintenance of accounts and stock records under Section 35 and Rule 56 - Penalty for failure to maintain books and for storing goods liable to confiscation under Section 122(1)(xvi) and (xviii) - Penalty on persons aiding or abetting and dealing with goods liable to confiscation under Section 122(3) - Fine in lieu of confiscation under Section 130(2) - Valuation based on evidence of undervaluation / 'kachha system' as a basis for reasonable beliefSeizure under Section 67 and Rule 139 of the CGST Rules - Confiscation under Section 130 of the CGST Act - Maintenance of accounts and stock records under Section 35 and Rule 56 - Valuation based on evidence of undervaluation / 'kachha system' as a basis for reasonable belief - Whether the goods found in excess at the time of search were liable to confiscation and whether seizure was justified. - HELD THAT: - The review authority found that physical stock verification at the premises showed excess against recorded stock and that statements of the supervisor, accountant and authorised signatory indicated absence of proper stock registers and a practice of recording transactions on 'kachha' notes. The authority concluded that the assessee contravened Section 35 read with Rule 56 by not maintaining proper stock/production records and that these omissions, together with contemporaneous statements and the practice of undervaluation (receipt of cash beyond invoice value), gave the investigating officers a reasonable belief that the goods were kept unaccounted for clandestine removal. On valuation, the investigating team multiplied invoice sale price by 2.5 relying on admissions about the 40:60 invoiced-to-cash pattern; the review authority upheld that methodology as justified by the factual matrix. Although the adjudicating authority had released the goods after relying on the assessee's later-updated books, the review authority found that the OIO had not examined records fully and had given excessive weight to post-search submissions; consequently it held the goods liable to confiscation but, because the goods had already been released, imposed a fine in lieu of confiscation under Section 130(2).Seized goods are liable to confiscation under Section 130; fine in lieu of confiscation imposed under Section 130(2).Penalty for failure to maintain books under Section 122(1)(xvi) - Penalty for storing/supplying goods liable to confiscation under Section 122(1)(xviii) - Maintenance of accounts and stock records under Section 35 and Rule 56 - Whether penalty is imposable upon the firm under Section 122(1)(xvi) and (xviii) of the CGST Act. - HELD THAT: - The review authority, after examining the search proceedings, statements recorded at site and the practice of maintaining 'kachha' records, concluded that the assessee had failed to maintain proper books and stock records as required by Section 35 and Rule 56. That contravention, together with the finding that goods were kept unaccounted with intent to evade tax, attracted penalties under Section 122(1)(xvi) (failure to keep/maintain books) and Section 122(1)(xviii) (supplying/storing goods which the person has reasons to believe are liable to confiscation). The authority therefore imposed the penalties on the firm, treating the earlier release of goods as not precluding monetary liability.Penalty under Section 122(1)(xvi) and (xviii) is attracted and imposed on the firm.Penalty on persons aiding or abetting under Section 122(3) - Liability of partner for firm's contraventions - Whether penalty is imposable upon the partner under Section 122(3) of the CGST Act. - HELD THAT: - The review authority found from the record and statements that the partner was the key person managing the firm's affairs and that the contraventions (deficient record-keeping and goods kept unaccounted) could not have occurred without his involvement or connivance. While the adjudicating authority had declined to impose penalty on the partner noting non-recording of his statement, the review authority held that the partner's role, contemporaneous admissions and other evidence sufficed to attract liability under Section 122(3) for dealing with goods which he knew or had reason to believe were liable to confiscation, and therefore imposed a penalty on the partner.Penalty under Section 122(3) imposed on the partner.Final Conclusion: The review authority set aside the adjudicating authority's release-only conclusion and found the seized goods liable to confiscation; imposed a fine in lieu of confiscation and imposed penalties on the firm under Section 122(1)(xvi) and (xviii) and on the partner under Section 122(3). The departmental appeal is allowed to the extent of these consequential fines and penalties.

Confiscation of goods under Section 130 for unaccounted stock - Fine in lieu of confiscation under Section 130(2) - Penalty for failure to maintain accounts and for storing goods liable to confiscation under Section 122 - Imposition of penalty on person aiding or abetting under Section 122(3) - Maintenance of accounts obligation under Section 35 and Rule 56 - Admissibility of statements recorded under Section 70 as substantive evidenceConfiscation of goods under Section 130 for unaccounted stock - Admissibility of statements recorded under Section 70 as substantive evidence - Maintenance of accounts obligation under Section 35 and Rule 56 - Seized finished goods found in excess of book records were liable to confiscation; in view of earlier release of goods, fine in lieu of confiscation was imposed. - HELD THAT: - The adjudicating authority's finding that the excess goods were not deliberately kept unaccounted was reversed. The appellate authority accepted the visiting officers' physical verification which showed excess stock against entries in stock registers, and placed weight on contemporaneous statements of the accountant, manager and partner recorded under Section 70. Those statements disclosed non maintenance and back calculation of production/stock and admission of clandestine practices (the so called 'kachha system'), which the authority treated as substantive evidence. The adjudicating authority had not independently examined the books and the genuineness of records relied upon by the assessee and had given undue credence to later post search submissions; these defects led the appellate authority to hold that the statutory ingredients of Section 130(1)(ii) and (iv) were satisfied. Because the goods had already been released by the adjudicating order, confiscation could not be effected and, accordingly, a fine in lieu of confiscation was imposed under Section 130(2).Seizure found justified; confiscation ordered but, goods having been released, a fine in lieu of confiscation was imposed.Penalty for failure to maintain accounts and for storing goods liable to confiscation under Section 122 - Maintenance of accounts obligation under Section 35 and Rule 56 - Penalty under Section 122(1)(xvi) and (xviii) was imposable on the assessee firm for failure to maintain proper accounts and for having goods liable to confiscation. - HELD THAT: - The appellate authority concluded that the assessee had not maintained proper stock records as required by Section 35 and Rule 56; production entries were not up to date and stock was not reflected in books contemporaneously. In light of the physical excess stock and admissions in statements recorded at the time of search, the authority found that the conditions for penalties for failure to keep/maintain books (clause (xvi)) and for supplying/transporting/storing goods liable to confiscation (clause (xviii)) were fulfilled. The adjudicating authority's reliance on the assessee's post search completion of books without sufficient verification of genuineness was rejected, and penalty was imposed on the firm.Penalty under Section 122(1)(xvi) and (xviii) upheld and imposed on the assessee firm.Imposition of penalty on person aiding or abetting under Section 122(3) - Admissibility of statements recorded under Section 70 as substantive evidence - Penalty under Section 122(3) was imposable on the partner who was found to be a key person involved in the affairs of the firm. - HELD THAT: - The authority examined Section 122(3), which penalises persons who aid, abet or otherwise deal with goods they know or have reason to believe are liable to confiscation. The partner was found to be a key person handling the firm's affairs; his statement recorded during search admitted lapses and endorsed other employees' statements. On this basis the appellate authority held the partner could not be excluded from liability and imposed the prescribed penalty under Section 122(3).Penalty under Section 122(3) imposed on the partner of the firm.Final Conclusion: The appellate authority allowed the departmental review appeal in part: it held the seized goods to be liable to confiscation under Section 130 (but imposed a fine in lieu since the goods had already been released), and upheld imposition of penalties on the assessee under Section 122(1)(xvi) and (xviii) and on the partner under Section 122(3).

Adjustment of tax liability under Section 34(2) of the CGST Act, 2017 - Refund of excess tax under Section 54 of the CGST Act, 2017 - Duplicate/double payment of GST - Declaration of credit note in return within prescribed time - Relevance of Rule 86(4A) - recredit to electronic credit ledger - Circular No.137/07/2020-GST - adjustment versus refundDuplicate/double payment of GST - Adjustment of tax liability under Section 34(2) of the CGST Act, 2017 - Declaration of credit note in return within prescribed time - Whether the appellant had in fact paid GST twice and whether adjustment under Section 34(2) precludes classification of the amounts as excess payment refundable under Section 54. - HELD THAT: - The Commissioner (Appeals) found that multiple invoices, debit note and credit notes were issued for the same supply and that the situation falls within Section 34(1). The appellant had reported credit notes in GSTR-1 filed after 30.09.2018 but failed to adjust the tax liability in the returns for the months in which the credit notes were issued, as mandated by Section 34(2). In view of Section 34(2) and the Board's clarification (Circular No.137/07/2020-GST) on adjustment versus refund, the proper course where credit notes can be adjusted is to adjust tax liability in the specified return and time-frame; failing that, the case cannot be treated as simple excess payment eligible for refund under Section 54. The adjudicator accordingly concluded that the appellant did not demonstrate an entitlement to refund because the statutory adjustment mechanism under Section 34(2) had not been availed within the prescribed period and manner. [Paras 7, 9, 10]The payments are governed by Section 34(2) adjustment mechanism and, since the appellant failed to adjust the credit notes in the returns as required, the amounts cannot be allowed as refund claimed as excess payment.Refund of excess tax under Section 54 of the CGST Act, 2017 - Relevance of Rule 86(4A) - recredit to electronic credit ledger - Circular No.137/07/2020-GST - adjustment versus refund - Whether the appellant is entitled to refund of the claimed amounts under Section 54 of the CGST Act, 2017. - HELD THAT: - The Commissioner (Appeals) held that the present facts involved issuance of multiple credit notes and a debit note for the same supply, bringing the matter within Section 34 rather than a pure case of erroneous/excess payment for which refund under Section 54 would apply. The submission invoking Rule 86(4A) (recredit to electronic credit ledger) was found not to be relevant because the dispute concerned adjustment by credit notes under Section 34. The appellate authority therefore concluded that the refund claims under Section 54 are not maintainable on the facts because the statutory adjustment under Section 34(2) was the operative remedy and was not complied with by the appellant. [Paras 11, 12]Claim for refund under Section 54 is not sustainable as the facts require adjustment under Section 34 and the appellant did not follow the statutory adjustment procedure.Final Conclusion: The appeals are dismissed. The Commissioner (Appeals) upheld the Orders in Original rejecting the refund claims for June 2018, August 2018 and September 2018 on the ground that the facts fall within the adjustment regime of Section 34(2) of the CGST Act, 2017 and the appellant failed to effect the requisite adjustment in the prescribed returns; the refund under Section 54 is therefore not allowable.

Revocation of cancellation of registration under Rule 23 of the CGST Rules, 2017 - Requirement to furnish returns and pay amounts due as condition precedent to filing revocation application - Cancellation of registration for continuous non-filing of returns - Waiver of late fee under Notification No.52/2020-Central Tax dated 24.06.2020Revocation of cancellation of registration under Rule 23 of the CGST Rules, 2017 - Requirement to furnish returns and pay amounts due as condition precedent to filing revocation application - Whether the appellant complied with the conditions of Rule 23 for revocation of cancellation of registration and was entitled to revocation. - HELD THAT: - The adjudicating authority cancelled the appellant's GST registration for non-filing of returns for a continuous period of six months and rejected the revocation application on the ground that no reply to the show cause notice was furnished. Rule 23 mandates that where registration is cancelled for failure to furnish returns, an application for revocation cannot be filed unless such returns are furnished and any amount due in terms of such returns is paid. The appellant filed pending returns on 30.09.2020 but records show returns were not filed up to June-2020 and late fees for periods beyond January-2020 remained unpaid. The adjudicator's finding that the proviso to Rule 23 was not satisfied is affirmed on the basis that the statutory preconditions for filing and acceptance of a revocation application were not met. [Paras 6, 10]Revocation application was not in compliance with Rule 23 and entitlement to revocation is rejected.Waiver of late fee under Notification No.52/2020-Central Tax dated 24.06.2020 - Scope of waiver limited to returns for July, 2017 to January, 2020 - Whether the appellant could rely on the waiver of late fee under Notification No.52/2020 to cure non-compliance for the period up to June-2020 and thereby procure revocation. - HELD THAT: - The Board's circular and Notification No.52/2020 were considered. The notification provides waiver of late fee where the total central tax payable in the return is nil, and the waiver applies only for returns for the period July, 2017 to January, 2020 if furnished between 1 July 2020 and 30 September 2020. The appellant's non-filing extended to June-2020; the waiver under the notification does not cover the period February-2020 to June-2020. Thus the appellant could not claim waiver of late fee for the entire disputed period relied upon to show compliance with the proviso to Rule 23, and the contention that the amnesty covered all returns up to cancellation date is rejected. [Paras 9, 10]Notification No.52/2020 does not extend waiver of late fee beyond January-2020 and cannot cure the appellant's non-compliance for the period up to June-2020.Final Conclusion: The appeal is dismissed. The revocation application was held non-compliant with Rule 23 because returns and amounts due for the period up to 10.06.2020 were not furnished/paid, and the late-fee waiver under Notification No.52/2020 was held applicable only up to January-2020 and therefore did not entitle the appellant to revocation.

Revocation of cancellation of registration - compliance with the first proviso to Rule 23(1) of the CGST Rules, 2017 - interest liability under Section 50 of the CGST Act, 2017 - prospective operation of amendment notified by Notification No.63/2020-C.T. (w.e.f. 1 September 2020) - requirement to furnish returns and pay tax, interest, penalty and late fee before filing revocation applicationRevocation of cancellation of registration - compliance with the first proviso to Rule 23(1) of the CGST Rules, 2017 - requirement to furnish returns and pay tax, interest, penalty and late fee - Whether the application for revocation of cancellation of registration can be allowed when the appellant had not complied with the first proviso to Rule 23(1) of the CGST Rules, 2017 by furnishing returns and discharging amounts due including interest. - HELD THAT: - The adjudicating authority rejected the revocation application because the appellant did not file a reply to the show cause notice and had not complied with the statutory pre-condition in the first proviso to Rule 23(1) which requires that where registration is cancelled for failure to furnish returns, no application for revocation shall be filed unless such returns are furnished and any amount due as tax in terms of such returns is paid along with any amount payable towards interest, penalty and late fee. The appellant claimed that no cash tax was paid and relied on a press release of 22 December 2018 to deny interest liability, and further offered to pay any interest if raised in future. The Commissioner (Appeals) observed that the proviso to Section 50 (relating to levy of interest) was amended by Notification No.63/2020-C.T., with effect from 1 September 2020, and that the appellant had not satisfied the requirement of filing returns and payment of amounts due including interest as mandated by Rule 23(1) proviso. On that basis the Commissioner (Appeals) concluded that revocation could not be granted and upheld the rejection of the application. [Paras 6, 7, 10, 11]Application for revocation of cancellation of registration rejected; appeal dismissed.Final Conclusion: The Commissioner (Appeals) upheld the rejection of the appellant's application for revocation of cancellation of GST registration on the ground of non-compliance with the first proviso to Rule 23(1) of the CGST Rules, 2017 (failure to furnish returns and discharge amounts due including interest), and dismissed the appeal.

Revocation of cancellation of registration - requirement of furnishing returns and payment of tax, interest, penalty and late fee as condition precedent to revocation - discretion of the proper officer to accept or reject revocation application subject to verification - CBIC clarification on returns requirement for revoked registrationsRevocation of cancellation of registration - requirement of furnishing returns and payment of tax, interest, penalty and late fee as condition precedent to revocation - CBIC clarification on returns requirement for revoked registrations - Whether the appellant, having filed pending returns and paid dues including interest, is entitled to have the cancellation of its GST registration reconsidered for revocation. - HELD THAT: - The adjudicating authority had rejected the application for revocation because the appellant did not reply to the show cause notice within the stipulated time and had outstanding returns. The appellant subsequently filed the pending returns up to the date of cancellation and produced challan/Form DRC-03 evidencing payment of the outstanding dues including interest. Rule 23 (sub-rule (1) proviso) requires that where registration is cancelled for failure to furnish returns, no revocation application shall be filed unless such returns are furnished and amounts due are paid; the CBIC circular clarifies that all returns due till the date of cancellation must be furnished before filing revocation and that returns for the period from cancellation to revocation must be furnished within thirty days of revocation. Having complied with the condition precedent by filing returns and making payments, the appellant satisfies the statutory prerequisites for consideration of revocation. [Paras 6, 7, 9, 10]The appellant's compliance with filing of pending returns and payment of dues disentitles the adjudicating authority to maintain rejection solely on that ground; the registration may be considered for revocation.Discretion of the proper officer to accept or reject revocation application subject to verification - verification of payment particulars and filing of returns - What further action the adjudicating authority must take upon the appellant's compliance and the manner in which the revocation application is to be processed. - HELD THAT: - Although the appellant has complied with filing returns and payment of dues, Rule 23(2) empowers the proper officer to either revoke registration where satisfied (for reasons recorded) or to reject the application after issuing show cause and considering the applicant's reply. The Commissioner (Appeals) directed that the appellant should file the revocation application through the common portal and that the proper officer shall consider the revocation application; such consideration is to be subject to verification of payment particulars, filing of returns and compliance with the CGST Act and Rules. This directs fresh administrative consideration rather than deciding revocation on merits by the appellate authority. [Paras 10]Appellant to file FORM GST REG-21/REG-21 equivalent on portal; proper officer to consider the revocation application afresh and pass orders after verification of payments, returns and statutory compliance.Final Conclusion: Appeal disposed by directing the appellant to file the revocation application through the common portal and by directing the proper officer to consider the application afresh for revocation of cancellation of registration after verifying payment particulars, returns filing and compliance with the CGST Act and Rules; appellate authority has not itself granted revocation but remitted the matter for verification and final decision.

Revocation of cancellation of registration under Rule 23 of the CGST Rules, 2017 - requirement to furnish returns and discharge tax, interest, penalty and late fee before filing revocation - effect of CBIC clarification on revocation where cancellation is on account of non-filing of returns - verification of payment particulars and compliance before revocationRevocation of cancellation of registration under Rule 23 of the CGST Rules, 2017 - requirement to furnish returns and discharge tax, interest, penalty and late fee before filing revocation - effect of CBIC clarification on revocation where cancellation is on account of non-filing of returns - Whether the appellant's registration can be considered for revocation after filing pending returns and payment of the outstanding interest liability. - HELD THAT: - The adjudicating authority had rejected the revocation application on the ground that the appellant had not discharged an interest liability and its reply to the show-cause notice was unsatisfactory. The appellant subsequently filed all pending returns up to December 2020 and produced challan/DRC-03 evidencing payment of the interest liability. Rule 23(1) requires that where registration is cancelled for failure to furnish returns, no application for revocation shall be filed unless such returns are furnished and amounts due in terms of such returns are paid. The CBIC circular clarifies that returns and amounts due up to the date of cancellation must be furnished/paid before seeking revocation. Having regard to these requirements and the appellant's production of returns and payment evidence, the Commissioner (Appeals) found that the conditions for filing a revocation application are now satisfied and that the registration may be considered for revocation. [Paras 6, 7, 9, 10]Registration may be considered for revocation since the appellant has filed the pending returns and shown payment of the outstanding interest; appellant directed to file the revocation application in the prescribed form through the common portal.Verification of payment particulars and compliance before revocation - administrative remand for consideration of revocation application - Whether the proper officer should be directed to reconsider the revocation application and on what terms. - HELD THAT: - The Commissioner (Appeals) did not itself pass an order revoking registration but directed that the appellant submit the revocation application in the prescribed form. The proper officer is required to consider the revocation application and is to verify the payment particulars, the filing of returns and overall compliance with the CGST Act and rules before passing any order. This direction is based on Rule 23(2) and the procedural safeguards therein which permit the proper officer to revoke or to reject the application after recording reasons; accordingly the matter is left to the proper officer for fresh consideration subject to verification. [Paras 10]Proper officer to consider the revocation application upon filing, subject to verification of payment particulars, filing of returns and compliance with the CGST Act and Rules.Final Conclusion: Appeal disposed by directing the appellant to file FORM GST REG-21 (revocation application) through the common portal; the proper officer is directed to consider the revocation application afresh and decide it after verifying payment particulars, returns filing and statutory compliance in accordance with Rule 23 and the CBIC clarification.

Denial of natural justice - refund of accumulated input tax credit on export without payment of tax - failure to issue deficiency memo and notice in Form RFD-08 - requirement of personal hearing under Rule 92(3) of CGST Rules and Section 75 of the CGST Act - necessity of a speaking orderDenial of natural justice - failure to issue deficiency memo and notice in Form RFD-08 - requirement of personal hearing under Rule 92(3) of CGST Rules and Section 75 of the CGST Act - necessity of a speaking order - refund of accumulated input tax credit on export without payment of tax - Whether the rejection of the appellant's refund claims was sustainable in view of the absence of issuance of a deficiency memo, Form RFD-08 and opportunity of hearing, and whether the impugned order required to be set aside for non-compliance with the principles of natural justice - HELD THAT: - The adjudicating authority rejected the refund claims on the ground that supporting documents were not submitted despite requests and reminders. The appellate authority found that neither a deficiency memo in the prescribed form nor a show cause notice in Form RFD-08 was issued prior to rejection, and no opportunity of being heard was afforded as mandated by Rule 92(3) of the CGST Rules and the requirement of hearing under Section 75. Rule 92(3) expressly provides that no application for refund shall be rejected without giving the applicant an opportunity of being heard. The record did not disclose issuance of the specified electronically generated deficiency memo or any recorded show cause proceedings that would satisfy the statutory requirement. The absence of a speaking order detailing the reasons and the failure to follow the procedural safeguards effectively amounted to denial of natural justice. In these circumstances the impugned order could not stand and the matter required fresh consideration by the adjudicating authority after providing the statutorily mandated notices and hearing. The appellant was directed to submit relevant documents so that the refund claims may be processed according to law and procedure. [Paras 8, 9, 10, 11, 12]Impugned order set aside; matter remitted to the adjudicating authority to issue the requisite deficiency memo / Form RFD-08, afford opportunity of hearing, pass a fresh speaking order and process the refund claims after the appellant submits the relevant documents.Final Conclusion: The rejection of the refund claims is quashed for failure to comply with the procedural requirements of issuing a deficiency memo / Form RFD-08 and affording an opportunity of hearing; the matter is remanded to the adjudicating authority to permit submission of documents, issue appropriate notices, hold hearing and pass a fresh speaking order in accordance with the CGST Act and Rules.

Detention, seizure and release of goods and conveyances in transit under Section 129 - Penalty under Section 129(1)(a) versus Section 129(1)(b) - Liability of owner and transporter for payment on release of detained goods - Scope of cross objections in an appeal under Section 107Scope of cross objections in an appeal under Section 107 - Cross objections raising new grounds beyond the scope of the departmental appeal are not maintainable in the appeal proceedings. - HELD THAT: - The appeal was filed by the department against the penalty portion of the adjudicating authority's order. The respondent's cross objections advanced a fresh plea concerning the requirement to generate E-way Bills for consignments below a specified value, a matter not raised by the appellant. The Appellate Authority held that a respondent in cross objection may only contest matters within the scope of the grounds raised by the appellant under Section 107(1) and the relevant rules; fresh grounds ought to have been pursued by the respondent by filing a separate appeal within the prescribed time. Accordingly the cross objections raising issues outside the departmental appeal were held to be beyond the purview of the present appeal and were not entertained. [Paras 9]Cross objections that raise fresh grounds not falling within the scope of the departmental appeal are beyond the purview of the appeal and are not to be considered in these proceedings.Detention, seizure and release of goods and conveyances in transit under Section 129 - Penalty under Section 129(1)(a) versus Section 129(1)(b) - Liability of owner and transporter for payment on release of detained goods - Penalty was to be imposed under Section 129(1)(b), not under Section 129(1)(a), because the owner of the goods did not come forward and the transporter paid for release. - HELD THAT: - Section 129 provides distinct consequences depending on whether the owner of the goods comes forward to pay the tax and penalty (clause (a)) or does not (clause (b)). The record established that the actual owners did not come forward and the transporter effected payment for release. The adjudicating authority had applied clause (a) and imposed a penalty equal to 100% of the tax payable, which is proper only when the owner comes forward. Where the owner does not come forward, clause (b) mandates release on payment of the applicable tax and a penalty equal to fifty per cent of the value of the goods reduced by the tax paid. Applying this statutory scheme to the facts, the Appellate Authority found the penalty as imposed to be incorrect and modified the impugned order accordingly, directing appropriation of amounts already deposited. [Paras 10, 12]The penalty imposed by the adjudicating authority is modified to the quantum payable under Section 129(1)(b) as the owner did not come forward; amounts already deposited shall be appropriated accordingly.Final Conclusion: The appeal is allowed in part: the respondent's cross objections that raise fresh grounds outside the scope of the departmental appeal are not entertained, and the impugned order is modified by substituting the penalty under Section 129(1)(b) (applicable where the owner did not come forward) in place of the penalty earlier imposed under Section 129(1)(a); amounts already deposited are to be appropriated in accordance with this modification.

Detention and seizure under Section 129 of the CGST Act, 2017 - penalty under Section 129(1)(a) vis-a -vis Section 129(1)(b) - release of detained goods on payment by owner or by transporter in absence of owner - extension of limitation for filing appeals by Notification No.55/2020-Central Tax dated 27.06.2020Extension of limitation for filing appeals by Notification No.55/2020-Central Tax dated 27.06.2020 - Maintainability of the appeal filed by the department under Section 107(2) of the CGST Act, 2017 in view of the period for filing of appeal. - HELD THAT: - The Original Order was communicated on 30.01.2020 and the departmental appeal was filed on 31.08.2020 which, absent any extension, would be beyond the six-month period prescribed by Section 107(2). The appellant, however, filed the appeal in reliance on Notification No.55/2020-Central Tax dated 27.06.2020 (which amended earlier Notification No.35/2020) extending the period for filing appeals up to 31.12.2020. The Appellate Authority held that the extended limitation under the Notification squarely applied and therefore the departmental appeal was filed within the extended period and is maintainable. [Paras 7]The appeal is maintainable as the filing falls within the extended period granted by the Notification.Detention and seizure under Section 129 of the CGST Act, 2017 - penalty under Section 129(1)(a) vis-a -vis Section 129(1)(b) - release of detained goods on payment by owner or by transporter in absence of owner - Whether the adjudicating authority correctly imposed penalty under Section 129(1)(a) when the owner of the goods did not come forward and the transporter obtained release. - HELD THAT: - Section 129 distinguishes the release regime where the owner of the goods comes forward (clause (a)) and where the owner does not come forward (clause (b)). The record shows the actual owners did not come forward to secure release and the transporter obtained release after paying tax and penalty. Under those facts clause (b) applies, entitling release on payment of applicable tax and a penalty equal to fifty per cent of the value of the goods reduced by the tax paid thereon. The adjudicating authority, however, imposed penalty equal to one hundred per cent of the tax payable under clause (a), which the Appellate Authority found to be incorrect in law and fact. The Appellate Authority therefore modified the penalty portion of the Original Order to reflect the liability under clause (b); the amount already deposited by the respondent was directed to be appropriated accordingly. The respondent's plea for additional leniency on account of COVID-related financial hardship was rejected as not provided for under the Act or rules. [Paras 8, 10]Penalty imposed under Section 129(1)(a) is not proper where the owner did not come forward; penalty is modified to that payable under Section 129(1)(b) and the amount deposited is to be appropriated accordingly.Final Conclusion: The departmental appeal is allowed in part: it is held maintainable by virtue of the notified extension of limitation, and the Original Order is modified by reducing the penalty to that payable under Section 129(1)(b) (release where owner did not come forward); amounts deposited by the respondent shall be appropriated to reflect this modification.

Revocation of cancellation of registration - Non-filing of returns - Requirement to furnish returns and pay tax, interest and late fee before seeking revocation - Compliance with Rule 23 of the CGST Rules, 2017 - Administrative verification before revocationNon-filing of returns - Requirement to furnish returns and pay tax, interest and late fee before seeking revocation - Whether the appellant had complied with the condition for filing returns and payment of dues required to seek revocation of cancellation of registration. - HELD THAT: - The adjudicating authority had rejected the revocation application on the ground that the appellant did not reply to the show cause notice and had not filed returns. The appellant produced copies of challans and filed pending returns, and asserted payment of interest, late fee and other dues and filing of returns up to June 2020. The Commissioner (Appeals) noted Circular No. 99/18/2019-GST which reiterates that where registration is cancelled for failure to furnish returns, returns and amounts due must be furnished/paid before filing for revocation. On the material before him, the Commissioner (Appeals) found that the appellant has complied with the requirements prescribed and recorded that the registration may be considered for revocation by the proper officer. [Paras 6, 7, 9, 10]It was found that the appellant has complied with the requirement to file returns and pay dues necessary to seek revocation, and therefore consideration for revocation is appropriate.Revocation of cancellation of registration - Administrative verification before revocation - Compliance with Rule 23 of the CGST Rules, 2017 - Whether the revocation of the cancelled registration should be finally revoked by the Commissioner (Appeals) or remitted to the proper officer for verification and decision. - HELD THAT: - Rule 23 of the CGST Rules, 2017 prescribes the procedure for revocation and mandates that the proper officer, after being satisfied for reasons to be recorded, may revoke cancellation or may reject the application after issuing notice and considering the applicant's reply. The Commissioner (Appeals) did not himself pass final revocation; instead he directed the appellant to file the revocation application through the common portal and directed the proper officer to consider the application after due verification of payment particulars, filing of returns and compliance with the Act and Rules. Thus the matter of final revocation is left to the proper officer to decide in accordance with Rule 23 and applicable circular guidance. [Paras 10, 11]The appeal is disposed by directing the appellant to file the revocation application and remitting the matter to the proper officer to consider and decide the revocation after verification and compliance with statutory provisions.Final Conclusion: The Commissioner (Appeals) held that the appellant has complied with the requirement of furnishing returns and paying dues necessary to seek revocation and therefore permitted consideration of revocation; the appellant is directed to file the revocation application through the common portal and the proper officer is directed to verify payments, returns and compliance and decide the revocation in accordance with Rule 23 of the CGST Rules, 2017.