2023 (2) TMI 1281 - HC - GST

Non-consideration of reassessment - Escalation Charges would be exigible under the VAT Act or not - HELD THAT - When it remains undisputed that the seventh respondent could not have decided on reassessment without considering the petitioner s case that the amount received as Escalation Charges would not be exigible under the VAT Act, this Court is of the considered opinion that the petition must succeed to this limited extent with the impugned order dated 31.03.2022 being quashed and the proceedings restored to the seventh respondent for reconsideration with liberty to the petitioner to file detailed objections but without raising question of limitation as the impugned order is within time. This Court must observe that all questions are left open for consideration by the seventh respondent. The petition for the different relief/s other than the relief as against the challenge to the reassessment order is dismissed - petition is allowed in part.

Summary

Issues involved:
Challenge to order under GST Act and VAT Act, participation in reassessment proceedings, non-examination of Escalation Charges, lack of opportunity, interference by the Court, restoration of proceedings, limitation ground, quashing of order, detailed objections, subsequent recovery proceedings, reframing reassessment, appearance before respondent, precipitation delay.

Analysis:
The petitioner challenged an order dated 31.03.2022 under the GST Act and VAT Act, seeking a declaration that the GST Act provisions do not apply to the case. The petitioner participated in the reassessment proceedings, but their representatives believed Escalation Charges would not be taxable under the VAT Act. The petitioner did not contest receiving notice under Section 39(1) of the VAT Act but argued that Escalation Charges were not considered in the reassessment. The Court noted that the reassessment was incomplete without considering the non-taxability of Escalation Charges, leading to the quashing of the order dated 31.03.2022.

The Court allowed the petition in part, dismissing other reliefs sought by the petitioner. The order dated 31.03.2022 was quashed, and subsequent recovery proceedings were also annulled. The proceedings were restored to the seventh respondent for reframing the reassessment, with the petitioner given an opportunity to provide a detailed response. The petitioner was directed to appear before the respondent without further notice on a specified date. As the original reassessment order was quashed, no further actions could be taken until the reassessment was redone.

In conclusion, the Court intervened due to the crucial aspect of Escalation Charges not being considered in the reassessment, leading to the quashing of the order. The petitioner was granted the opportunity to present detailed objections in the restored proceedings, with limitations on raising certain grounds. The judgment aimed to ensure a fair reassessment process by addressing the petitioner's concerns and providing them with a chance to participate fully in the proceedings.