2024 (2) TMI 1462 - HC - GST

Challenge to assessment order and proceedings - errors in assessment order including incorrect tax computation and penalty imposition - HELD THAT - The tax invoice dated 19.09.2018 reveals that the taxable value of supply was Rs. 7,94,294/- and that the gross value was Rs. 9,38,447/-. On comparing this with the impugned assessment order, it is evident that tax liability has been imposed on twice the gross value of Rs. 9,38,447/-. In light of the fact that tax was paid on such invoice, even assuming that there is tax liability in respect of the second e-way bill, the manner of computation of tax in the impugned assessment order is completely unsustainable - it is evident from the table at the penultimate page of the assessment order and the show cause notice that the proposed penalty was Rs. 50,676/-. The abstract of demand on the last page of the assessment order, however, shows that the penalty demand is for a sum of Rs. 1,68,920/-. On account of this discrepancy also, the impugned assessment order cannot be sustained. It is found that the tax demand proposed in the show cause notice is the same as the confirmed demand in the assessment order. Therefore, upon remand, it becomes necessary for the first respondent to initiate fresh proceedings from the show cause notice stage The impugned assessment order is quashed. As a corollary, the matter is remanded. It is open to the first respondent to re-commence proceedings by issuing a fresh show cause notice - Petition disposed off.

Summary

Issues:
1. Assessment order challenged by petitioner regarding tax liability on stainless steel supply.
2. Allegation of errors in assessment order including incorrect tax computation and penalty imposition.
3. Discrepancy in e-way bill generation and consignee details.
4. Legal arguments regarding inadvertent error in e-way bill generation and tax payment.
5. Disagreement on penalty amount proposed in show cause notice versus assessment order.
6. Court's analysis of tax liability computation and penalty imposition.
7. Decision to quash the assessment order and remand the matter for fresh proceedings.

Detailed Analysis:
The petitioner, a trader of stainless steel products, challenged an assessment order related to the supply of SS-Scrap to another corporation. The petitioner argued that e-way bills were generated inadvertently, and tax liability was already discharged. The assessment order contained errors, including incorrect tax computation and penalty imposition. The petitioner contended that the tax was imposed twice the gross value of the invoice, which was unsustainable. Additionally, discrepancies in e-way bill generation and consignee details were highlighted by the petitioner's counsel.

The Government Advocate argued that the petitioner should have canceled the duplicate e-way bill and provided necessary documents to establish inadvertent error. The court noted that tax was paid on the invoice and the tax computation in the assessment order was flawed. The penalty amount proposed in the show cause notice differed from the amount demanded in the assessment order, further questioning the validity of the assessment order.

The court found the assessment order unsustainable due to errors in tax computation and penalty imposition. It directed the quashing of the assessment order and remanded the matter for fresh proceedings. The court emphasized the need for the first respondent to initiate new proceedings from the show cause notice stage. Consequently, the court disposed of the writ petition, with no costs imposed, and closed related motions.