2022 (12) TMI 589 - HC - GST

GST best judgement assessment order set aside due to COVID-19 impact on assessee's compliance

M/s. Raj Kishore Engineering Construction (P) Ltd., Rep. by its Managing Director Mr. S. Rajasekaran Versus The Joint Commissioner (Appeals) II, The Assessment Officer

The Madras HC set aside an ex-parte order regarding GST best judgement assessment where the assessee failed to file returns and pay tax for 10 months due ... Best Judgement assessment - Ex-parte order - Non-functioning of GST Tribunal - Failure to file the GST returns and pay the tax due to COVID for 10 months in time - failure of the assessee to file reply to the show cause notice issued u/s 46 - Appellate Authority, learned counsel submitted that Appellate Authority has taken note of this submissions but has ultimately negatived the appeal primarily on the ground that the returns were filed belatedly i.e., not within the prescribed time. HELD THAT:- this Court deems it appropriate to set aside the impugned order and remit the matter back to Appellate Authority with a further directive to examine the matter on merits based on available records and based on opportunity already given to the writ petitioner - assessee under subsection (8) of Section 107 of C-GST Act. This means that the Appellate Authority need not give opportunity of being heard to the writ petitioner-assessee again as the same has already been given, it is the discretion of the Appellate Authority. All that the Appellate Authority has to do is to articulate the dispositive reasoning qua aforesaid aspect of the matter. It is open to the Appellate Authority to articulate other reasons i.e., dispositive reasoning of other facets of the matter. Issues:1. Admissibility of Input Tax Credit for tax liability under C-GST Act.2. Best Judgment assessment by Assessing Officer.3. Appeal to Appellate Authority under C-GST Act.4. Justification for belated filing of returns due to COVID-19 and registration revocation.5. Adequacy of reasoning in Appellate Authority's decision.6. Court's intervention and remand to Appellate Authority for fresh disposal.Analysis:1. The petitioner, engaged in works contract services, availed Input Tax Credit (ITC) for tax payment under the Central Goods and Services Tax Act, 2017. Due to COVID-19, they couldn't file returns for 10 months, leading to a notice from the Assessing Officer for non-filing. The AO conducted a Best Judgment assessment, which the petitioner appealed against to the Appellate Authority.2. The Appellate Authority upheld the assessment, citing belated filing of returns as the primary reason. The Revenue counsel defended this decision, emphasizing the Authority's discretion to review facts. However, the Court found the lack of detailed reasoning in the Authority's decision unacceptable, especially regarding the reasons for the delay in filing returns.3. The Court noted that the Appellate Authority should have considered the justifications provided by the petitioner for the delayed filings and returned a clear finding on the matter. As a result, the Court decided to intervene and remand the case back to the Appellate Authority for a fresh review based on available records and the opportunity already given to the petitioner.4. The Court directed the Appellate Authority to expedite the review process within three weeks and communicate the decision to the petitioner promptly. The original decision of the Authority was set aside, emphasizing that the Court did not express any opinion on the merits of the case, leaving all questions open for the Authority's consideration in accordance with the law.5. Ultimately, the Writ Petition was disposed of with the mentioned terms, and the Writ Miscellaneous Petition was closed without any costs imposed. The judgment focused on ensuring a fair and reasoned review of the petitioner's case by the Appellate Authority, highlighting the importance of providing adequate justifications for decisions in tax matters.