2023 (2) TMI 880 - HC - GST

Tax Dispute Resolution: Petitioner Must Deposit 50% of Disputed Amount to Challenge GST Assessment Order Effectively

HC partially upheld the petitioner's challenge to the Assessment Order under GST Act. The Court directed the petitioner to deposit 50% of the disputed tax ... Validity of assessment order - total non application of mind to the Notification No.41/2017 - Integrated Tax (Rate), dated 23.10.2017 issued by the Ministry of Finance, Department of Revenue, Government of India - non-speaking order - violation of principles of natural justice. HELD THAT:- The contentions of the petitioner as raised in this writ petition have not been considered in the impugned Assessment Order. However, the impugned Assessment Order is dated 30.12.2021. The petitioner has also not filed any statutory appeal as against the said order. He has chosen to file this writ petition only now i.e., after a lapse of more than thirteen months. Therefore, even if principles of natural justice have been violated by the respondent and the impugned Assessment Order is a non speaking order with regard to the petitioner's contention, the petitioner must be put on terms for quashing the impugned Assessment Order on account of the inordinate delay in approaching this Court. This Court is of the considered view that 50% of the amount demanded under the impugned Assessment Order which includes penalty has to be deposited by the petitioner, within a period of four weeks from the date of receipt of a copy of this order and on deposit of the said amount, within the stipulated time, the impugned Assessment Order can be quashed and remanded back to the respondent for fresh consideration on merits and in accordance with law, within a time frame to be fixed by this Court. The petitioner is directed to deposit 50% of the amount demanded under the impugned Assessment Order, dated 30.12.2021 with the respondent, within a period of four weeks from the date of receipt of a copy of this order. On deposit of the aforesaid amount by the petitioner, within the stipulated time, the impugned Assessment Order, dated 30.12.2021 stands quashed and is remanded back to the respondent for fresh consideration on merits and in accordance with law - Petition disposed off. Issues:Challenge to Assessment Order under Tamil Nadu Goods and Services Tax Act, 2017 based on incorrect GST rate application for exports.Analysis:The petitioner challenged the Assessment Order dated 30.12.2021, contending that the respondent erroneously applied an 18% GST rate instead of the correct rate of 0.1% for exports as per Notification No.41/2017 - Integrated Tax (Rate). The petitioner argued that the respondent failed to consider the notification, resulting in an incorrect tax liability determination.The petitioner's counsel highlighted that the goods in question fell under the category specified in the Notification, warranting the application of the lower GST rate of 0.1%. Even if the Notification was deemed inapplicable, the petitioner asserted that the GST rate should not exceed 5%. The petitioner emphasized the non-application of mind by the respondent in assessing the correct GST rate, leading to the inflated tax liability.The Court acknowledged the petitioner's contentions but noted the delay in approaching the Court, having not filed a statutory appeal against the Assessment Order for over thirteen months. Despite recognizing potential violations of natural justice and the non-speaking nature of the Assessment Order regarding the petitioner's arguments, the Court deemed the delay significant.In light of the circumstances, the Court directed the petitioner to deposit 50% of the amount demanded under the Assessment Order within four weeks. Upon deposit, the Assessment Order would be quashed and remanded to the respondent for reconsideration in line with the law and principles of natural justice. Failure to comply with the deposit requirement within the specified time would result in the confirmation of the Assessment Order by the respondent.The Court's decision aimed to balance the petitioner's concerns with the need for timely legal recourse, emphasizing the importance of adhering to procedural requirements while addressing substantive issues. The judgment sought to provide a fair opportunity for the petitioner to rectify the assessment discrepancies while upholding the principles of natural justice and procedural fairness.