2022 (5) TMI 1188 - HC - VAT and Sales Tax

Validity of assessment order - failure to file return - Revenue issued notice twice, despite that, no reply had been given by the petitioner - HELD THAT - Every month return has to be filed, knowing well with that position, the petitioner dealer has not come forward to file the return and pay the tax. Therefore, notice was issued twice, despite that, no reply has been given and thereafter, assessment order has been passed, the tax component as well as the interest and penalty having been quantified was imposed against the petitioner, which the petitioner had paid only in January 2020 except the penalty. Penalty - HELD THAT - Section 73 of the Act since has been invoked for imposing penalty that is a wrong invocation and if at all the petitioner case is to be considered and it should be considered only under Section 61 of the Act and in that, Section 61(2) enables the Revenue to make only the tax as well as the collection of interest and not for penalty. Therefore, the penalty imposed against the petitioner is not inconsonance with the said provisions of the Act. After the assessment order is made, within thirty days if the petitioner comes forward to file the return, then the order of assessment can be withdrawn. However, the late fee and the interest imposed on the dealer shall be paid by him. Here in the case in hand, even that chance was not utilised by the petitioner, as admittedly, he has not filed the return and paid the tax within thirty days from the date of receipt of the assessment order. Therefore, Section 62(2), as claimed by the petitioner counsel, would not come to the rescue of the petitioner dealer - Insofar as the invocation of Section 73 is concerned, no doubt it is a correct provision which has been invoked by the respondent Revenue as so many components are provided under 73 like determination of tax not paid, short paid, erroneously refunded or no tax credit are utilised etc. The determination of tax which has not been paid as one of the factor which can be gone into by the Revenue under the provisions of Section 73, hence such an invocation cannot be found fault with. Therefore, that ground also urged by the learned counsel appearing for the petitioner is untenable, hence, it is liable to be rejected. Therefore, for all these reasons, this Court is not inclined to entertain this writ petition as the impugned orders are tenable - Petition dismissed.

Summary

Issues:
1. Challenge to assessment order and bank attachment notice.
2. Failure to file returns and pay taxes under GST regime.
3. Imposition of penalty under Section 73 of the GST Act.
4. Invocation of Section 61 for penalty consideration.
5. Application of Section 62(2) in the case.
6. Validity of invoking Section 73 for tax determination.

Analysis:
1. The petitioner sought a Writ of Certiorarified Mandamus to challenge the assessment order and bank attachment notice. The Revenue issued notices due to the petitioner's failure to file returns and pay taxes between August 2018 and March 2019. The assessment order directed the petitioner to pay tax, interest, and penalty. The petitioner contended that taxes were paid belatedly, and the penalty under Section 73 of the GST Act was unjustifiable.

2. The Government Advocate argued that the petitioner failed to file returns despite repeated notices, leading to the assessment order. The petitioner paid taxes in January 2020 but was still liable for interest and penalty. The Advocate suggested that the petitioner could appeal the assessment order if aggrieved, and failure to do so precluded the writ petition.

3. The Court considered both arguments and noted the requirement for monthly return filings under GST. The petitioner's delay in filing returns led to the assessment order imposing tax, interest, and penalty. The petitioner's plea regarding the wrong invocation of Section 73 for penalty imposition was dismissed. The Court emphasized the importance of timely compliance with assessment orders to avoid penalties.

4. The Court highlighted Section 62(2) provisions, stating that filing a valid return within thirty days of the assessment order could withdraw the order but not the liability for interest and late fees. The petitioner's failure to utilize this provision further weakened their case. Additionally, the invocation of Section 73 by the Revenue for tax determination was deemed appropriate and not subject to fault.

5. Ultimately, the Court dismissed the writ petition, stating that the impugned orders were valid. The petitioner was advised to appeal the order independently if desired. The Court's decision did not influence the Appellate Authority's future judgment on the appeal. The writ petition was closed without costs, allowing the petitioner to pursue an appeal against the assessment order separately.