2024 (3) TMI 902 - HC - GST

Procedural Flaws Invalidate GST Assessment for Transportation Services, Order Quashed and Remanded for Fresh Evaluation

HC quashed an assessment order challenging GST taxation for transportation services. The court found procedural irregularities in the assessment, noting ... Validity of Assessment / Demand Order - tax liability with interest and penalty - turnover on Pan-India basis - Services of transportation of goods - Notification No.13/2017 - GST is leviable on the recipient of services on reverse charge basis - non application of mind - HELD THAT:- Although the petitioner had submitted the balance sheet and ITR details, it is evident from the records, assessing officer recorded findings contrary to the documents on record. It is also noticeable that in the penultimate paragraph at page 63, the assessing officer notices that the all India balance sheet discloses other income of Rs. 20,05,359/-. After noticing such other income, in the concluding table, tax liability with interest and penalty is imposed in respect of the turnover which, according to the petitioner, is taxable entirely on RCM basis. Thus, the impugned assessment order is quashed and the matter is remanded for re-consideration. The petitioner is permitted to re-submit all relevant documents to the assessing officer within fifteen days from the date of receipt of a copy of this order. W.P. is disposed of on the above terms. Issues:The judgment involves a challenge to an assessment order dated 28.12.2023 regarding the taxation of services provided by the petitioner in the transportation of goods on a Pan-India basis under Notification No.13/2017 - Central Tax (Rate) dated 28.06.2017, with a focus on GST leviable on the recipient of services on a reverse charge basis.Summary:The petitioner, engaged in providing transportation services of goods on a Pan-India basis, contested the assessment order dated 28.12.2023, asserting that the services provided fall within the scope of Notification No.13/2017 - Central Tax (Rate), making GST leviable on the recipient of services on a reverse charge basis. The petitioner indicated NIL turnover in the GSTR-1 statement, leading to a notice in Form GST ASMT-10 received in July 2023, which could not be responded to due to the ill-health of the Director. A reply was later submitted, emphasizing that the entire turnover is taxable under RCM basis on the recipient of service. However, discrepancies were noted in the assessment order, leading to the challenge.The petitioner's counsel highlighted discrepancies in the assessment order, pointing out that despite submitting documents, the order inaccurately stated that certain documents were not provided. The counsel argued that the impugned order lacked proper consideration of the submitted materials, including the balance sheet and ITR details, leading to an erroneous demand raised in the show cause notice.The Additional Government Pleader for the respondents acknowledged the receipt of uploaded documents but noted that specific documents were not provided, leading to the confirmation of demand due to the absence of turnover details from Tamil Nadu. The petitioner's assertion of supplying services only under RCM was reiterated, emphasizing the list of documents submitted physically and through the GST portal.The assessment order, as per the operative portion, detailed the taxpayer's submissions during a personal hearing, highlighting the lack of relevant documents for the Tamil Nadu branch and discrepancies in the turnover declaration. Despite the submission of balance sheet and ITR details, the assessing officer's findings contradicted the documents on record, leading to an erroneous imposition of tax liability, interest, and penalty. Consequently, the assessment order was deemed unsustainable due to non-application of mind.The judgment quashed the impugned assessment order and remanded the matter for re-consideration, allowing the petitioner to resubmit relevant documents within fifteen days for a fresh assessment order to be issued within two months, emphasizing a reasonable opportunity for the petitioner, including a personal hearing. The case was disposed of without costs, with related motions closed.