2024 (9) TMI 600 - HC - GST

Challenge to assessment order passed by the second respondent for the Assessment Year 2017- 2018 - case of the petitioner is that the impugned Assessment Order has been in gross violation of principle of natural justice and also suffers from want of jurisdiction - HELD THAT - This Court is inclined to partly come to the rescue to the petitioner by quashing the impugned Assessment Order and by remitting the case back to the respondents to pass a fresh order with the following conditions i. The petitioner shall deposit 10% of the disputed tax of Rs. 31,56,386/-, within a period of six weeks from the date of receipt of a copy of this order. ii. The petitioner shall file a detail reply to the impugned Assessment Order, which stands quashed, within a period of thirty days from today. The impugned Assessment Order which stands quashed shall be treated as addendum to the Show Cause Notice dated 11.02.2021 issued to the petitioner, which preceded the impugned Assessment Order. Petition disposed off.

Summary

Issues:
Challenge to Assessment Order for GST liability for the year 2017-2018 based on violation of natural justice and jurisdiction.

Analysis:
The petitioner challenged the Assessment Order for the year 2017-2018, alleging a violation of natural justice and jurisdiction. The petitioner contended that a portion of the turnover related to the pre-GST era, and the tax liability for the remaining portion was paid along with interest. The petitioner raised concerns about the Show Cause Notices issued by the second respondent and the subsequent personal hearing dates. The petitioner argued that the impugned Assessment Order wrongly imposed penalties under Section 74 of the GST enactments. The petitioner also highlighted the closure of the business in 2019 and the significant tax liability imposed. The petitioner defended the denial of Input Tax Credit, stating that goods were supplied directly from the storage godown/warehouse, and invoices were raised accordingly.

The respondents, represented by the Additional Government Pleader, accused the petitioner of benefiting from illegitimate Input Tax Credit from bogus traders. They relied on a previous court decision in Tvl.Sahyadri Industries Limited Vs. State of Tamil Nadu. After considering both sides, the Court decided to partially support the petitioner by quashing the Assessment Order and remitting the case back to the respondents with specific conditions. The petitioner was instructed to deposit 10% of the disputed tax amount and file a detailed reply within a specified timeframe. The quashed Assessment Order was to be treated as an addendum to the original Show Cause Notice.

The Court warned that failure to comply with the specified conditions would result in the dismissal of the writ petition, allowing the respondents to take further legal action. The judgment concluded by disposing of the Writ Petition with the outlined directions and observations, emphasizing no costs were to be incurred. The connected Writ Miscellaneous Petition was also closed as part of the judgment.