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The Honorable Telangana High Court in Laxmi Fine Chem held that in case assessee has wrongly or fraudulently availed input tax credit, the Revenue department should initiate appropriate recovery proceedings under section 73 or 74 of the CGST Act, 2017, rather than invoking Rule 86(A) of the CGST Rules, 2017.
The Telangana High Court has ruled against a taxpayer against whom the revenue department had invoked General Anti-avoidance Rule (GAAR).
The recent judgment by the Hon’ble Telangana High Court sheds light on the application of General Anti-Avoidance Rules (GAAR). Here are a few key points from the ruling:
Rule 86(A) does not allow insertion of negative balances in Electrnonic Credit Leedger.
No proceedings under sec. 74 if assessee cleared all tax liability along with interest prior to issuance of SCN: HC
The Hon’ble Telangana High Court in Laxmi Fine Chem v. Assistant Commissioner held that in case assessee has wrongly or fraudulently availed ITC, the Revenue department should initiate appropriate recovery proceedings under Section 73 or 74 of the CGST Act rather than invoking Rule 86(A) of the CGST Rules.
Roads and buildings officials in Vikarabad district approached Telangana High Court challenging the orders of GST commissionerate, which had directed Axis Bank and State Bank of India to freeze bank accounts belonging to the district R&B department and to enable the GST wing deduct Rs. 78.12 lakh from the accounts.
The Hon’ble Telangana High Court in the case of Rays Power Infra Pvt. Ltd. held that if the taxpayer clears all the tax liability along with interest at any day, prior to the issuance of show cause notice, they would not liable for any further additional taxes by way of penalty or interest and the proceedings will be considered concluded.