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2022 (7) TMI 1313 - HC - GSTLevy of CGST and SGST - transportation services rendered by the drivers outside the State of Telangana - OLA - providing an electronic platform to the driver partners and to the customers - case of petitioner is that he had rightly paid IGST for the audit period and was not required to pay CGST and SGST - audit period April, 2019 to March, 2020 - HELD THAT - It is prima facie evident that if the passenger is not registered under GST and avails transportation service, by way of legal fiction the place of supply would be the place where the passenger embarks or starts his journey - Though the 3rd respondent has referred to provisions of Section 12(9) of the IGST Act, he has however erroneously recorded that in case of unregistered recipient, the place of supply shall be the location of such recipient, which prima facie appears to be in contravention of Section 12(9) of the IGST Act. Thereafter, 3 rd respondent levied the tax as noted above and issued notice for payment. More particularly the requirement to pay IGST under Section 12(9) of IGST Act and correspondingly the nonliability to pay CGST and SGST insofar the transportation services rendered by the drivers were not considered in the right perspective. That apart though the impugned order is a lengthy one, the substantive portion appears to be without due application of mind to the legal provision. The matter is remanded back to the 3 rd respondent for a fresh decision in accordance with law after giving notice of hearing as well as opportunity of hearing to the petitioner - petition allowed by way of remand.
Issues:
Challenge to legality and validity of tax order and notice regarding CGST and SGST payment. Analysis: The petitioner, a private limited company providing internet platform services for passenger transportation, challenged an order levying CGST and SGST for a period where IGST was paid for services outside Telangana. The petitioner contended that as per IGST Act, the place of supply for unregistered passengers should be where the journey starts, not the recipient's location. The court found errors in the tax authority's interpretation of Section 12(9) of the IGST Act, leading to the incorrect tax imposition. The court noted that the legal provisions were not considered correctly in the original order, indicating a lack of proper application of the law. The court decided to set aside the order and remand the matter to the tax authority for a fresh decision, emphasizing the importance of correctly applying Section 12(9) of the IGST Act. The petitioner was given the opportunity to present additional submissions, and the tax authority was directed to pass a new order within four weeks. The consequential notice for payment was also quashed along with the original order. The court highlighted that the applicability of Section 12(9) was crucial to the petitioner's case and warranted a fresh review by the tax authority. In conclusion, the writ petition was disposed of without costs, and any related pending applications were closed. The judgment focused on the proper interpretation and application of the IGST Act's provisions regarding the place of supply for passenger transportation services, emphasizing the need for a correct understanding of the law in tax assessments and orders. The court's decision aimed to ensure a fair and lawful resolution of the dispute regarding CGST and SGST payment obligations for the petitioner.
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