2024 (2) TMI 1005 - HC - GST

Insurance Company Wins Challenge Against Defective Tax Assessment, Secures Reassessment with Full Hearing Rights Under GST Regulations

Tvl. Future General India Insurance Company Limited, Represented by its Authorised Signatory, Mr. Devi Dayal Garg Versus The Assistant Commissioner (ST) (FAC), The Assistant Commissioner (ST), Chennai

HC found the assessment order against a private insurance company defective. Errors included incorrect GST rate application (36% vs 18%) and improper ... Validity of assessment order - difference of turnover between P & L account and balance sheet, on the one hand, and GSTR-9, on the other - jurisdictional error with regard to the determination of transitional credit - HELD THAT:- It is found that the assessing officer has accepted the explanation of the petitioner with regard to certain defects. Difference of turnover between P & L account and balance sheet, on the one hand, and GSTR-9, on the other - HELD THAT:- As contended by learned counsel for the petitioner, the assessing officer has recorded findings without applying his mind to the fact that the turnover for an entity operating in multiple States in India, as reflected in the financial statements, and the turnover attributable to its operations in Tamil Nadu would vary. From the findings, it also appears that tax liability was imposed merely because the Chartered Accountant's certificate did not provide State-wise turnover. This finding does not stand to reason because only the bifurcation of total and Tamil Nadu turnover is germane. It also appears that GST has been imposed at 36% instead of the applicable rate of 18%. Even with regard to GST at 18%, from the return placed on record by the petitioner, it appears that the tax liability in respect of the turnover of Rs. 80,89,05,068/- was duly discharged. The total tax imposed under this head is about Rs. 14.56 crores and the patent errors justify interference with the assessment order even without examining the order in respect of other defects for which liability was imposed. Therefore, the impugned assessment order cannot be sustained. The impugned assessment order is quashed and the matter is remanded for reconsideration - assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order in accordance with law - Petition allowed by way of remand. Issues involved: Assessment order dated 30.12.2023 challenged by a private general insurance company for various defects including turnover difference, transitional credit determination, and imposition of incorrect GST rates.Summary:The petitioner, a private general insurance company, challenged an assessment order dated 30.12.2023, citing various defects. The petitioner explained that the difference in turnover between financial statements and GSTR-9 arose due to operations at a Pan India level versus Tamil Nadu turnover, supported by a Chartered Accountant's certificate. The petitioner also highlighted errors in transitional credit determination. The Additional Government Pleader argued that these were factual issues requiring statutory remedy.Upon examination, the court found that the assessing officer accepted some explanations but erred in imposing tax liability without considering the variation in turnover for an entity operating in multiple states. The court noted that GST was incorrectly imposed at 36% instead of 18%, despite the petitioner having discharged tax liability for the turnover in question. The court concluded that the assessment order was flawed, particularly in defects related to turnover, and quashed the order for reconsideration.Consequently, the impugned assessment order was quashed in relation to specific defects and remanded for reconsideration. The assessing officer was directed to provide the petitioner with a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months. The petitioner was allowed to raise all contentions before the assessing officer. The writ petition was disposed of with no order as to costs, and connected miscellaneous petitions were closed.