2024 (7) TMI 669 - HC - GST

Challenge to assessment order - petitioner failed to submit material documents such as the trial balance with regard to Tamil Nadu, certificates from the Chartered Accountant with regard to the turnover in Tamil Nadu and GST returns relating to other States - HELD THAT - The financial statements of the petitioner have also been placed on record. These statements appear prima facie to have been prepared on pan-India basis. The petitioner should have placed on record documents, such as the trial balance for Tamil Nadu, certificates from a Chartered Accountant and GST returns filed in other States, to substantiate the contention that there was no outward supply in Tamil Nadu during the relevant assessment period. The entire tax demand was appropriated pursuant to the impugned order. Therefore, revenue interest stands fully secured. In these circumstances, by taking into account the assertion that the petitioner is in possession of GST returns for other States and that these documents would corroborate that the outward supply related to those States, the interest of justice warrants reconsideration. The matter is remanded for reconsideration - petition disposed off by way of remand.

Summary

Issues:
Challenge to order dated 30.12.2023 regarding tax liability on petitioner for assessment period 2017-18 based on turnover attribution to Tamil Nadu despite 'nil' returns filed.

Analysis:
The petitioner, engaged in business across multiple States, including Tamil Nadu, filed 'nil' returns for the assessment period 2017-18 claiming no business activity in Tamil Nadu. Responding to notices, the petitioner submitted all documents as required. However, the respondent imposed tax liability by attributing the entire pan-India turnover to Tamil Nadu, leading to recovery of the tax demand. The petitioner contended that the turnover reflected in financial statements and Form 26AS pertained to business in other States, supported by GST returns filed in those States.

The Additional Government Pleader argued that the petitioner failed to provide essential documents like the trial balance for Tamil Nadu, certificates from a Chartered Accountant, and GST returns from other States. Consequently, the assessing officer treated the pan-India turnover as Tamil Nadu's turnover. The petitioner, a registered GST taxpayer in multiple States, presented financial statements prepared on a pan-India basis, indicating the need for specific documents to prove the absence of business activity in Tamil Nadu during the relevant period.

Considering that the entire tax demand was already recovered, the Court found the revenue interest secured. However, acknowledging the petitioner's possession of GST returns from other States that could verify the outward supplies, the Court deemed it necessary for justice to remand the matter for reconsideration. The impugned order dated 30.12.2023 was set aside, and the first respondent was directed to issue a fresh order within three months after providing the petitioner with a reasonable opportunity, including a personal hearing. The assessment order being overturned, the bank attachment was lifted. The writ petition was disposed of accordingly, with associated motions closed, and no costs were awarded.