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TMI Blog2022 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ner even furnished the details of inward supplies of services received under Sub Section (2) of Section 38 of Jharkhand Goods and Services Tax Act, 2017 (in short 'JGST Act, 2017') showing taxable value of inward supply of Rs. 16.00 crores and claims to have paid Input tax to the tune of Rs. 2.88 crores. According to the petitioner, since no work was being undertaken in the month of December 2017, nor any sale or purchase was done, nor any payment was received, nor any supply of goods or services was done, petitioner did not file its return for the period due to ignorance of law within the time limit prescribed under Section 39 of JGST Act, 2017. According to the petitioner, it received Summary of Order under DRC-07 on 01.10.2018 uploaded in its portal, which indicated that an assessment order was passed on 28.09.2018 under section 62 of JGST Act, 2017 for the period July 2017 to March 2018 raising a total demand of Rs. 3,30,76,800/-, wherein ITC to the tune of Rs. 2.88 crores was denied and an equal amount has been levied as tax and further interest and penalty was charged vide Annexure-3. 3. Petitioner has made a categorical statement that though DRC-07, a Summary of the Order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 25.01.2020 (Annexure-9) passed by the Joint Commissioner of State Tax (Appeal), Ranchi Division, Ranchi. b. for quashing of the assessment order dated 02.08.2018 passed under section 62 of JGST Act, 2017 by the Deputy Commissioner of State Tax South Circle, Ranchi (Respondent No. 2) (Annexure-6) and DRC-07, a Summary of the Order dated 01.10.2018 (Annexure-3). c. Petitioner has also prayed that it may be allowed to avail and utilize its ITC amounting to Rs. 2.88 crores which has been blocked and adjusted against the disputed amount. Based on these facts, learned counsel for the petitioner has made the following submissions: i. No notice under section 46 of JGST Act, 2017 was served before passing of the assessment order under Section 62 of the JGST Act, 2017, though it is mandatory condition. It is submitted that Section 62 provides that only after service of notice under Section 46 of the Act, proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all relevant material which is available or which he has gathered. According to the petitioner, assessment order can be passed within a period of five ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be levied upon a person who is liable to pay tax but fails to pay it or any part thereof within the time prescribed. Without arriving at specific finding as to any tax due for the said period, interest has been charged upon it. v. Learned counsel for the petitioner has also submitted that penalty under section 73(9) amounting to Rs. 3,88,800/- ought not to have been levied since there was no liability for payment of any tax, nor any question of tax paid or short paid for the period in question arises, neither has the petitioner wrongly availed or utilized any ITC. ITC of the petitioner was merely lying in its electronic credit ledger which has been blocked by the Respondent. vi. It is contended that as per Section 16(4) of the Act, a registered person is entitled to take ITC till 20th October of following financial year. However, due to the action of the Respondent Department, ITC has been blocked even before expiry of the said period. Petitioner is unable to utilize ITC for discharge of its tax liability for subsequent periods. Learned counsel for the petitioner has summarized her submissions and prayed that the impugned assessment order dated 02.08.2018 (Annexure-6) as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with rule 68 of the JGST Rules has been held to be a mandatory requirement before the proper officer proceeds to assess the tax liability of the said person under section 62 of the JGST Act to the best of his judgment. 8. A reply to the rejoinder affidavit has also been filed wherein averment made in the counter affidavit have been reiterated. On being specifically asked, learned counsel for the Respondent has not been able to show from the records or dispute the contention of the petitioner that no notice under section 46 of the Act of 2017 was issued prior to passing of the assessment order under section 62 of the Act by the proper officer. 9. We have considered the submissions of learned counsel for the parties and taken note of the materials on record relied upon by the rival parties. The relevant provisions of JGST Act, 2017 as are necessary to appreciate the issue at hand, are being quoted hereunder: CHAPTER-V Input Tax Credit "16. Eligibility and conditions for taking input tax credit. - (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, 1961, [43 of 1961], the input tax credit on the said tax component shall not be allowed. (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier." CHAPTER-IX Returns 46. Notice to return defaulters. - Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed. 47. Levy of late fee. - (1) Any registered person who fails to furnish the details of outward or inward supplies required under section 37 or section 38 or returns required under section 39 or section 45 by the due date shall pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum amount of five thousand rupees. (2) Any registered p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates. (2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order under subsection (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fee under section 47 shall continue. JGST RULES, 2017 CHAPTER-VIII Returns 68. Notice to non-filers of returns.- A notice in FORM GSTR-3A shall be issued, electronically, to a registered person who fails to furnish return under Section 39 or Section 44 or Section 45 or Section 52. 10. A perusal of the aforesaid provisions in the scheme of the Act indicates that the Legislature has provided a mechanism for issuance of prior notice to return defaulter under section 46 of the Act if a registered person fails to furnish return under section 39 or section 44 or 45. The notice is to be furnished in the prescribed format i.e. GSTR-3A. Section 62 makes it all the more clear that if a registered person fails to furnish the return under section 39 or sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circle, Ranchi (Annexure-6) and establish that the order is in a format without even referring to the introduction of the facts of the case submitted by the Assessee, if any, and there is no discussion or findings and conclusion as to how and why determination of the tax liability together with interest and penalty has been made. But, since the impugned assessment order fails to comply the mandatory requirement of notice under section 46 of the Act, we do not deem it necessary to make comments thereupon. Material facts leading up to issuance of DRC-07 have been referred to in the earlier part of the order. Respondent had not brought on record any document to show that the assessment order (Annexure-6) was served upon the petitioner before issuance of DRC-07 on 1.10.2018 or that a notice under Section 46 was served upon the petitioner before passing the assessment order under Section 62 of the Act. Petitioner has therefore rightly contended that it did not get an opportunity to file its return within thirty days of passing of the assessment order. Had that been the case, the assessment order could have been deemed to have been withdrawn. Learned counsel for the petitioner has also t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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