2024 (7) TMI 168 - HC - GST

Imposition of tax, interest and penalty - seeking an extension of time on the ground that notices were received in respect of five financial years and that the petitioner is in the process of gathering the required data to submit a detailed reply - HELD THAT - The documents on record clearly indicate that the petitioner was provided several opportunities to contest the claim for tax, interest and penalty. Upon receipt of the intimation and show cause notice, the petitioner could and should have placed on record documents indicating movement of goods between the group entities. Such documents could have been in the form of e-way bills, lorry receipts, weighment slips and the like. The petitioner cannot be absolved of responsibility for the current state of affairs. It should, however, be noticed that substantial amounts were imposed as penalty without taking into account documents that the petitioner claims is in his possession. When these facts and circumstances are considered cumulatively, a case is made out to provide the petitioner another opportunity, albeit by putting the petitioner on terms. The order impugned herein is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand under the impugned order as a condition for remand in the aggregate, after giving credit of amounts remitted earlier - petition disposed off.

Summary

Issues:
Challenge to order imposing tax, interest, and penalty based on surprise inspection and show cause notice.

Analysis:
The writ petition challenges the order imposing tax, interest, and penalty following a surprise inspection at the petitioner's business premises and branches, along with a subsequent show cause notice. The petitioner, engaged in trading metal scraps, sought an extension to gather data for a detailed reply due to notices received for five financial years. The petitioner contended that being part of a group, transactions with other entities did not imply bill trading. The respondent alleged fake invoices by certain suppliers and concluded the petitioner's involvement in bill trading without providing adequate opportunity to present genuine transaction evidence.

Analysis:
The petitioner's counsel argued that the petitioner was not given a fair chance to submit relevant documents to prove the authenticity of transactions. The Government Advocate, representing the respondent, maintained that the petitioner had multiple opportunities to provide necessary documents and establish the genuineness of transactions. Citing a Kerala High Court judgment, the respondent's advocate emphasized that failure to utilize opportunities provided by the respondent precludes complaints about natural justice principles' breach.

Analysis:
The petitioner expressed readiness to remit 10% of the disputed tax demand as a condition for remand. The court observed that despite several opportunities, the petitioner failed to present documents like e-way bills, lorry receipts, and weighment slips to contest the tax claim effectively. Acknowledging the penalty imposed without considering the petitioner's claimed possession of relevant documents, the court decided to set aside the impugned order subject to the condition of remitting 10% of the disputed tax demand within three weeks.

Analysis:
The court directed the petitioner to submit a detailed reply to the show cause notice within the specified period, enclosing all relevant documents. Upon receiving the reply and the 10% disputed tax demand remittance, the respondent was instructed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. The writ petition was disposed of with no costs, and related motions were closed accordingly.