2023 (12) TMI 1136 - HC - GST

Validity of recovery notice - Denial of benefit of exemption - - refund claim - petitioner has discharged tax under wrong head - importing Bulk Simulator Training Services to the Helicopter pilots from Indian Air Force, Indian Army, Indian Navy and other defence establishments including some of the departments of the State Government - Absebnce of GSTIN and PAN - HELD THAT - The second and the third respondents impugned orders are perused. These authorities have elaborately referred to the provisions of IGST Act as also the CGST/KGST Act and they have also referred to the details of the recipient establishments. There is obvious reference in the impugned orders to the details furnished by the petitioner after being served with the notice in GST DRC-02, but the proceedings are concluded in the premise that the petitioner has raised Invoices without mentioning the necessary details. This Court must opine that this consideration in the peculiarities of the case will not suffice, and if it is undisputed that the recipient establishments are based in Delhi, Jharkhand and Uttar Pradesh and the petitioner s supply imparting of training is exempt, significance of the same should also have been considered. This Court is of the considered opinion that, especially in the peculiarities of this case, the third respondent, to sustain the proposed demand, had to examine whether failure to furnish the details of the GSTIN, notwithstanding the other circumstances, could justify denial of exemption. The proceedings are restored to the third respondent to reconsider the merits of the petitioner s response in the light of this Court s observation - the recovery notice dated 17.10.2023 is also quashed - Petition allowed in part.

Summary

Issues:
The issues involved in the judgment are the validity of the tax liability imposed on the petitioner, the denial of exemption under Notification No. 12/2017, and the necessity of furnishing GSTIN for determining the place of supply.

Validity of Tax Liability:
The petitioner challenged the orders-in-original and in-appeal regarding additional tax liability imposed after an audit report. The petitioner contended that services provided to government entities were exempted, but authorities alleged incorrect tax payment. The petitioner argued that the absence of GSTIN should not affect tax liability.

Exemption Denial under Notification No. 12/2017:
The authorities initiated proceedings alleging incorrect tax discharge under IGST instead of SGST and CGST. They argued that without GSTIN, the place of supply would be in Karnataka. The petitioner maintained that registration, whether PAN or TAN, should suffice, and services were exempt if sponsored by government entities.

Necessity of Furnishing GSTIN:
The petitioner emphasized that details like TAN and place of supply could be determined from records, questioning the denial of exemption due to missing GSTIN. The Court noted that failure to provide GSTIN should not automatically disqualify services from exemption, especially if sponsored by government bodies. The Court directed a reevaluation by the third respondent based on these considerations.

Judgment:
The High Court allowed the petition in part, quashing the order-in-appeal and directing a reassessment by the third respondent in light of the Court's observations. The recovery notice was also quashed as a consequential measure.