2023 (2) TMI 1351 - HC - GST

Challenge to Assessment Orders - respondent has passed the Assessment Orders by total non application of mind to the reply - violation of principles of natural justice - HELD THAT - After recording the undertaking given by the respondent, this Court directs the respondent not to take coercive steps against the petitioner until final orders of this Court. Since the Central authority may be a necessary party for the effective adjudication of this writ petition, this Court suo moto impleads the Ministry of Finance (Department of Revenue), Union of India, New Delhi as party second respondent in this writ petition. Registry is directed to carry out necessary amendment in the main writ petition and post the same for counter and disposal on 24.03.2023.

Summary

Issues:
Challenge to Assessment Orders under GST Act for Assessment Years 2021-22 and 2022-23 based on non-application of mind by respondent, Interpretation of Notification No.11/2017 regarding GST rates for works contracts, Allegation of respondent not considering petitioner's reply, Request for stay on recovery pending final decision, Addition of Ministry of Finance as a party in the writ petition.

Analysis:

The petitioner challenged the Assessment Orders dated 06.12.2022 under the GST Act for the Assessment Years 2021-22 and 2022-23, alleging that the respondent passed the orders without considering the petitioner's reply to the Show Cause Notice. The petitioner, a Railway Contractor, argued that they are not liable to pay revised GST rates as they supply exclusively to railways under Sl.No.v of Notification No.11/2017. The petitioner contended that the respondent failed to apply their mind to the reply, leading to a summary rejection without proper consideration.

The petitioner's counsel highlighted the distinction between Sl.No.iii and Sl.No.v of Notification No.11/2017, emphasizing that Sl.No.v applies to works contracts exclusively for railways, which is the category under which the petitioner operates. The petitioner's position was that the amendment to Sl.No.iii should not affect them as they fall under Sl.No.v. The counsel pointed out the discrepancy between the petitioner's submission and the respondent's Assessment Orders, indicating a lack of proper evaluation by the respondent.

In response, the Additional Advocate General for the respondent disputed the petitioner's claims but assured the court that no coercive action would be taken for recovery until a final decision is reached. The court, after noting the respondent's undertaking, directed a stay on coercive measures pending final orders. Additionally, recognizing the necessity of the Ministry of Finance's involvement in the case, the court added them as the second respondent in the writ petition for effective adjudication. The court ordered the registry to make the necessary amendments and scheduled the matter for further proceedings on 24.03.2023.