2021 (2) TMI 593 - HC - GST

Petitioners must produce documents for inquiry by specified date. Compliance required for logical conclusion.

The court directed the petitioners to cooperate with the Inquiry Officer by producing necessary documents for the inquiry. The petitioners were instructed ... Classification of the entry under which the transaction made by the petitioner no.1 with the State of West Bengal - whether fall under serial no.3A of Chapter 99 or under entry 26 of Heading 9988 - HELD THAT:- At this stage, the only order that can be passed is directing the petitioners to cooperate with the Inquiry Officer by producing the documents as required for the purpose of inquiry. The petitioners are directed to produce those documents in terms of the two summons mentioned hereinabove which are under the possession and control of the petitioners on 10th February, 2021 at 10 a.m. The petitioners should clearly indicate which are the documents out of the said list that are not in their possession or control. The production of the documents may be by the Director/Controller of M/s. Akash Foods Products Pvt. Ltd. or through any other responsible officer of the petitioner no.1. The person who will produce the document shall be released after prima facie scrutiny of the documents on the date of production. The writ petition is adjourned till 31st March, 2021, with liberty to the parties to mention in case of any difficulty. Issues:Classification of transaction for GST levy under different entries of the CGST Act.Analysis:The core issue in this petition pertains to the classification of the transaction made by the petitioner with the State of West Bengal under the CGST Act. An interim order was passed directing the respondents not to take coercive steps against the petitioners until a specified date. The respondents were also directed to conduct an investigation under Section 70 of the CGST Act in Kolkata. The interim order regarding coercive steps has expired, and no action has been taken by the CGST authorities in Kolkata. Respondent nos.3, 7, and 10 argue that the inquiry initiated by the Delhi office should be conducted solely by that office.Upon examination of the summons issued under Section 70 of the CGST Act, it was found that individuals were directed to provide evidence and documents regarding the evasion of GST by certain companies, including the petitioner. However, these individuals failed to appear on the specified dates. Two applications were filed - one for vacating the interim order and the other for its extension. The State GST authorities claim that the transaction falls under a specific entry with a maximum levy of 5%, which has been paid by the petitioner. On the other hand, the Central GST authorities argue for an 18% levy under a different entry, alleging evasion of GST.The court directed the petitioners to cooperate with the Inquiry Officer by producing the necessary documents for the inquiry. The petitioners were instructed to produce the documents by a specified date and indicate any documents not in their possession. The Inquiry Officer can issue further summons for additional documents if needed. The petitioners must comply with the production of all required documents. The inquiry procedure was modified to ensure a logical conclusion given the prevailing circumstances. The writ petition was adjourned with liberty to parties to mention any difficulties.One application was dismissed as not pressed, while another was disposed of in view of the order passed in the writ petition. The judgment provided detailed directions for the inquiry process and the production of documents, emphasizing cooperation from the petitioners to bring the inquiry to a logical conclusion.