2019 (10) TMI 1010 - HC - GST

Maintainability of delay condonation application - assessee had filed first appeal that came to be dismissed as beyond time - HELD THAT - The order dated 10.06.2018 suffers from an inherent defect, inasmuch as it appears to have been passed without first verifying whether any satisfaction had been reached by the proper officer as to the admissibility of the petitioner to the benefit of the compounding scheme pursuant to his application which admittedly had been filed within time alongwith necessary deposit of compounding fee. The order dated 10.06.2018 is accordingly set aside and the matter is remitted to the assessing authority to pass a fresh order of assessment in accordance with law.

Summary

Issues:
Assessment under U.P. GST Act, 2018 for the month of January, 2018 based on regular assessment instead of compounding method.

Analysis:
The petitioner challenged an order dated June 10, 2018, where the Assistant Commissioner Commercial Tax assessed the petitioner to tax for January 2018 under Section 64 of the U.P. GST Act, 2018. The petitioner had filed an appeal, which was dismissed as beyond time. The petitioner argued that since they had filed an application for compounding within the stipulated time and complied with the terms, the tax liability should have been assessed under the compounding method, not regular assessment.

Upon the petitioner's plea, a supplementary counter affidavit was filed by the State, stating that the petitioner had indeed applied for compounding and paid the fee for the period from October 2017 to March 2018. However, the order dated June 10, 2018, did not reflect any discussion on this matter. The Court noted that if the petitioner had fulfilled the conditions of the compounding scheme, it was unreasonable for them to be taxed through regular assessment.

The Court highlighted that it was the 'proper officer' under the Act who should have examined the admissibility of the compounding application, not necessarily the assessing officer. The Court found an inherent defect in the June 10, 2018 order as it seemed to have been passed without verifying if the proper officer had determined the petitioner's eligibility for the compounding scheme based on the timely filed application and fee deposit. Consequently, the Court set aside the order and remitted the matter to the assessing authority for a fresh assessment in compliance with the law. The assessing officer was directed to verify the status of the compounding application before proceeding with the assessment.

The Court allowed the writ petition, emphasizing the importance of proper verification of the compounding application before making any assessment order. The assessing authority was instructed to complete the reassessment expeditiously, preferably within six months from the date of receiving a certified copy of the Court's order.