Tax Assessment Challenge Succeeds: Order Overturned, Fresh Evaluation Mandated with Disputed Demands Suspended Until April 2024

HC allowed the petitioner's challenge to tax assessment orders. The court found the assessing authority's refusal to rectify the order inconsistent with prior judicial precedent and CBIC Circular. The case was remitted for fresh assessment, with disputed tax demands kept in abeyance and a new order directed to be passed by 15.04.2024, ensuring compliance with legal principles and circular guidelines.

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Issues involved:
Challenge to orders dated 31.10.2023 and 30.01.2024 regarding refusal to rectify assessment order under Rule 142 (5) of the C.G.S.T. Rules, 2017.

Details of the judgment:
1. The petitioner challenged the orders dated 31.10.2023 and 30.01.2024, contending that the assessing authority refused to rectify the assessment order and denied the petitioner to avail Input Tax Credit (ITC) of Rs. 1,82,16,688/- with penalty, contrary to a previous judgment. The refusal to entertain correction application to delete penalty and interest, not in line with Circular No. 26/2017 issued by the CBIC, was also contested.

2. The Court acknowledged that the assessment order may not be sustainable based on the law declared by the Court and the CBIC Circular should have been given effect to, subject to pre-conditions. The assessing authority's failure to consider the High Court's order and the CBIC Circular rendered its decision unsustainable.

3. The Court emphasized that the law declared by the Court is retrospective and should have been applied to the assessment period in question. The assessing authority's ignorance of the CBIC Circular when passing the order did not justify the refusal to apply it upon receiving a correction application. Any order contrary to the law or directive would be erroneous.

4. Considering the fair statement by the revenue's counsel, the Court set aside the order dated 30.01.2024 and remitted the matter to the assessing authority for a fresh reasoned order, taking into account the Court's observations. The assessing authority was directed to pass a new order by 15.04.2024, keeping in mind the previous decision granting time for compliance by 31.03.2024.

5. Pending the fresh order, the disputed tax and penalty demands were to remain in abeyance. The writ petition was disposed of with the aforementioned directions.

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