2023 (10) TMI 1288 - HC - GST

Taxable Supply or not - determination of differential amount of GST - validity of summons and enquiry proceedings - petitioner-company has expressed its intention to contest the proceedings claiming that the issue involving interpretation of law. - Petitioner sought to issue SCN u/s 73 before raising any demand. - providing complete turnkey solutions from concept to commissioning and maintenance of the electrification works and other civil works to its customers. - HELD THAT - From the tenor of the reply filed on behalf of the respondents, it appears that still the inquiry is going on and final adjudication as per Section 73 of the CGST Act has not been done till date. This writ petition is disposed off while directing the respondents not to insist the petitioner-company to pay the amount of Rs.5,51,49,553/-, as indicated in the impugned notices, till final adjudication is taken place under Section 73 of the CGST Act.

Summary

Issues:
The issues involved in the judgment are related to the demand for payment of GST by the petitioner-company, the legality of the notices issued by the respondents, and the requirement of adjudication under Section 73 of the CGST Act.

Details of Judgment:

Demand for GST Payment:
The petitioner-company, engaged in providing turnkey solutions, received notices from the respondents regarding short payment of GST on taxable supply to AVVNL. The petitioner contested the demand, claiming it was a matter of interpretation and objected to the computation of the amount. Despite the objections, the respondents forced the petitioner to deposit Rs.40,00,000 under Section 73(5) of the CGST Act. The petitioner argued that without proper adjudication, the respondents cannot compel payment of the demanded amount.

Legality of Notices:
The petitioner contended that the respondents were acting illegally by demanding payment without adjudication under Section 73 of the CGST Act. The petitioner maintained that it had paid GST at 12% and objected to the demand for over Rs.5 crore without proper adjudication. The respondents claimed that the notices were issued in accordance with the law and that the investigation was ongoing.

Adjudication Requirement:
The respondents admitted that the final adjudication under Section 73 of the CGST Act had not been completed. The court directed the respondents not to enforce payment of Rs.5,51,49,553 until the final adjudication takes place. The amount deposited by the petitioner through forms GST DRC-03 was to remain subject to the final adjudication under the CGST Act.

Conclusion:
The High Court disposed of the writ petition, instructing the respondents not to insist on payment until final adjudication under Section 73 of the CGST Act is completed. The stay petition was also disposed of, and no costs were awarded in the matter.