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2021 (5) TMI 453 - HC - GSTValidity of assessment order - non-filing of GSTR-3B return - best judgment assessment under Section 62 of Telangana GST Act - HELD THAT - Since the impugned order appears to be prima facie arbitrary and contrary to the provisions of the Telangana GST Act, 2017, the impugned order is set aside - the matter is remitted back to the 1st respondent for fresh consideration; the 1st respondent shall issue notice to the petitioner indicating the method of assessment under the best judgment assessment provision contained in Section 62 of the said Act; grant a personal hearing to the petitioner. Petition allowed by way of remand.
Issues:
Challenge to Assessment Order under Telangana GST Act, 2017 for tax period November, 2018 - Methodology of best judgment assessment by the 1st respondent - Validity of multiplying by 3 times the monthly SGST tax - Levying of 100% penalty without specifying the provision - Setting aside of the impugned order and remitting the matter back to the 1st respondent for fresh consideration. Analysis: 1. The Writ Petition was filed to challenge the Assessment Order dated 27-12-2019 passed by the 1st respondent under the Telangana GST Act, 2017 concerning the petitioner for the tax period of November, 2018. 2. The petitioner failed to file the GSTR-3B return for November, 2018, leading to a notice being issued under Section 46 of the Telangana GST Act, 2017 on 29-01-2019, warning of tax liability assessment under Section 62 if the return was not filed within 15 days, along with interest and penalty. 3. Due to the petitioner's non-compliance, the 1st respondent conducted a best judgment assessment under Section 62 of the Act, determining the turnover and tax liability based on the average monthly SGST tax, which was multiplied by 3 to arrive at the assessed amounts for SGST, CGST, and IGST for the said tax period. 4. The petitioner's counsel argued that while the 1st respondent had the authority to conduct a best judgment assessment in the absence of the GSTR-3B filing, the method of multiplying by 3 times the monthly SGST tax to calculate the tax liability was deemed arbitrary and lacking a principled basis. Moreover, the imposition of a 100% penalty was contested as it was not specified under which provision of the Act it was levied. 5. The Assistant Government Pleader representing the respondents was unable to explain the rationale behind the 1st respondent's methodology in the best judgment assessment or identify the legal basis for imposing a 100% penalty on the petitioner, further raising concerns about the procedural fairness and compliance with the Telangana GST Act, 2017. 6. Consequently, the High Court found the impugned order to be prima facie arbitrary and contrary to the provisions of the Act. As a result, the order was set aside, and the matter was remitted back to the 1st respondent for fresh consideration. The 1st respondent was directed to issue a notice to the petitioner explaining the assessment methodology, provide a personal hearing, and pass a reasoned order on tax, interest, and penalty within eight weeks from the date of receipt of the court's order. 7. In addition to setting aside the impugned order, any consequential attachment or garnishee orders issued by the respondents were also annulled. The Writ Petition was allowed with no costs incurred, and any pending miscellaneous petitions were to be closed accordingly.
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