Western India Regional Council of
The Institute of Chartered Accountants of India

Law Update Details

January 2019 CA. Kishor R. Gheewala

(A) VAT Audit

The Joint Commissioner (Legal) has, vide his letter dated 7/12/2018, opined & clarified to the Gujarat Sales Tax Bar Association, in respect of liability for VAT Audit for the period 1/4/2017 to 30/6/2017 as under,

1. If Total Turnover is more than Rs.1 Crore & Taxable Turnover is Exceeding Rs. 20 Lacs, or

2. If the Taxable Turnover is more than Rs.25 Lacs or,

3. If the amount of Tax Credit carried forward as on 30/06/2017 is more than Rs.5 Lacs

This clarification has created lots of ripples in the Trade & Industry.

(B) Guj. High Court Judgements

Mangalam Alloys Ltd vs. Commissioner of Central Excise, Ahmedabad –III, R/Tax Appeal Nos. 1088 and 1089 of 2018, dated 5th September, 2018 (Gujarat High Court)

The burden of Proof to establish Genuineness of Transaction is on the dealer. If the Department proves the evidences of Transport of Goods to be Fake/ Incorrect & the dealer is not able to substantiate & prove the transaction, the dealer is not entitled to ITC.

Shivsagar Seva Sangh Ltd vs. State of Gujarat, Sp. Civil Application No. 13126/2018, dated 10/10/2018 (Gujarat High Court)

When the Tribunal gives decision in favour of dealer, refund of amount paid by way of Pre-Deposit, before the Tribunal, cannot be denied by the Department on the excuse of the Department having preferred an appeal to the High Court, especially when the High Court has not granted any Stay.

RSPL Ltd. vs. Union of India, Special Civil Application No.22056 of 2017, dated 16th October, 2018 (Gujarat High Court).

Sec.140(5), which provides for Transitional Credit of Taxes paid under earlier laws, in respect of Goods & Services in transit, is not unconstitutional & unreasonable, because of non inclusion therein of taxes paid on Capital Goods.


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