?? GST Update on Right to Cross Examination ??

?? GST Update on Right to Cross Examination ??

A recent case has brought to light an important aspect of the GST process. The denial of opportunity for cross-examination of the supplier and transporter, whose statements were relied upon by the authority, has been challenged. ???

The adjudication order confirming the levy of tax, along with interest and penalty, and the blocking of the credit ledger were the main points of contention. ????

The court held that the appellant was not given an effective opportunity to rebut the allegations against the supplier and transporter. ?????

The adjudicating authority has been directed to furnish copies of the statements obtained from the supplier and transporter to the appellant. The appellant is entitled to submit further explanation along with necessary documents. If the appellant requests for cross-examination of those persons, it should be permitted. ????

The appellant is bound to prove the movement of goods of purchase/sales with proper evidence. There is a negative balance in the credit ledger, so the blocking of such ledger will not prejudice the appellant. However, if funds flow into the ledger, the blocking shall be restricted to the demand amount only. ??????

The writ petition has been allowed by remand. This is a significant development in the GST landscape. Stay tuned for more updates! ????

Title: Roshan Sharma vs The Assistant Commissioner of Revenue, State Tax, West Bengal

Court: Calcutta High Court

Citation: M.A.T. 854 of 2024 With

IA No. CAN 1 of 2024

Dated: 06-May-2024

This ruling has several important implications for GST practitioners and businesses:

1Right to Cross-Examination: The ruling emphasizes the right of an appellant to cross-examine the supplier and transporter whose statements were relied upon by the authority. This is a significant development as it ensures the principles of natural justice are upheld in GST proceedings.

2Transparency in Proceedings: The adjudicating authority is required to furnish copies of the statements obtained from the supplier and transporter to the appellant. This increases transparency in the proceedings and allows the appellant to effectively rebut the allegations.

3Burden of Proof: The ruling reiterates that the appellant is bound to prove the movement of goods of purchase/sales with proper evidence. This places a significant responsibility on businesses to maintain proper documentation of their transactions.

4Blocking of Credit Ledger: The ruling provides clarity on the blocking of the credit ledger. It states that the blocking of the ledger will not prejudice the appellant if there is a negative balance. However, if funds flow into the ledger, the blocking shall be restricted to the demand amount only. This provides some relief to businesses as it limits the extent to which their credit ledger can be blocked.

Overall, this ruling strengthens the rights of appellants in GST proceedings and provides important guidelines for businesses to ensure compliance with GST laws. It’s a significant development in the GST landscape. ?????????

Hope you will find this useful.

Thanks and Regards,

Abhishek Raja Ram