Legal Challenge Succeeds: GST Assessment Orders Overturned Due to Procedural Flaws in Director's Remuneration Evaluation

The HC allowed the writ petition challenging GST assessment orders for 2017-18, finding procedural irregularities in evaluating director's remuneration, miscellaneous expenses, and exempted turnover. The court quashed the original orders and directed the Assessing Officer to reconsider the case, provide a personal hearing, and issue fresh assessment orders within two months after document submission.

---

---

Issues involved: Challenge to assessment orders for assessment years 2017-18 regarding director's remuneration, miscellaneous expenses, and exempted turnover.

Director's remuneration: The petitioner challenges the assessment order stating that it did not consider the replies provided. The petitioner argues that the remuneration paid to the managing director is exempt from GST under relevant provisions. The court finds that the petitioner did clarify the payment of remuneration to the managing director, but failed to submit material documents such as employment contract or TDS details.

Miscellaneous expenses: The assessment order imposed liabilities on expenses without proper examination of suppliers' registration status or applicability of exemption notifications. The petitioner relied on notifications exempting registered persons from GST under certain conditions. The court concludes that the imposition of tax, penalty, and interest on expenses was done without proper application of mind.

Exempted turnover: The petitioner claimed exemption under a specific notification related to training in art and culture. However, the Assessing Officer concluded that the petitioner was engaged in the sale of paintings and art works, indicating a lack of consideration for the material provided. The court finds that the assessment order did not properly consider the petitioner's submissions on exempted turnover.

Judgment: The court allows the writ petition, quashing the impugned orders and remanding the matter for reconsideration by the Assessing Officer. The petitioner is directed to submit all relevant documents within two weeks. The Assessing Officer is instructed to provide a reasonable opportunity for the petitioner, including a personal hearing, and issue fresh assessment orders within two months from receiving the documents. No costs are awarded in this matter.

---