2024 (7) TMI 374 - HC - GST

Tax Appeals Upheld: Comprehensive Review Ordered with Directive to Reassess GST Liability Based on Incomplete Initial Evaluation

Sarkar Diesel & Anr. Versus The Deputy Commissioner, State Tax, Krishnagar Charge & Ors.

WB HC allowed appeals challenging tax orders, remanding the matter to Assessing Officer for re-adjudication. The court found the appellant authority did ... Levy of penalty u/s 74 of the West Bengal Goods and Services Tax, 2017 - whether the appellant authority namely Joint Commissioner of State Tax, Berhampore Circle had considered all the issues which have been raised by the appellant in their appeal petition? - filing of declaration by the Indian Oil Corporation Limited that they have availed GTA services from the appellant filed - HELD THAT:- Considering the fact that this declaration has been issued by the Indian Oil Corporation Ltd., the appellant would be entitled to take advantage of the same for as the declaration clearly mentions that the GST liability on Reverse Charge Mechanism (RCM) has been discharged by the Indian Oil Corporation Limited on the services availed from the appellant/writ petitioner. Therefore, the matter should go back to the original authority for re-adjudication of the matter considering the subsequent developments. It is pointed out that by the learned Advocate for the appellant/writ petitioner that while issuing show-cause notice, the Assessing Officer had relied upon a decision of the Advance Ruling Authority, Goa wherein it appears that the Advance Ruling Authority at Goa held that the activity of issuance of pollution under the control certificate for the vehicle issued by the applicant therein is not covered under SAC 9991 and is covered under residue entry and hence should be taxed at 18%. The order passed by the Appellate Authority and the Original Authority/Assessing Officer are set aside and the matter stands remanded to the Assessing Officer - Petition allowed by way of remand. Issues:Three appeals challenging orders denying interim relief; Consideration of all raised issues by the appellant authority; Applicability of a declaration by Indian Oil Corporation Limited; Reliance on an Advance Ruling Authority decision; Remand of the matter to the Assessing Officer.Analysis:1. The appeals were filed challenging orders denying interim relief. The court consolidated the appeals and considered them together. The primary issue was whether the appellant authority, the Joint Commissioner of State Tax, had adequately addressed all issues raised by the appellant. The appellate authority was found to have only interfered with the penalty imposition under Section 74 of the West Bengal Goods and Services Tax, 2017, without considering other grounds raised by the appellant.2. The court noted that a crucial declaration by Indian Oil Corporation Limited, stating the discharge of GST liability on Reverse Charge Mechanism for services availed from the appellant, was not considered during the appeal process. Consequently, the court decided that the matter should be remanded to the original authority for re-adjudication, taking into account this new information from the declaration.3. The appellant highlighted reliance on an Advance Ruling Authority decision from Goa regarding taxation on certain activities. The court clarified that such a ruling from another state does not automatically apply to the appellant in West Bengal. The ruling only binds the department in Goa and the applicant who sought the ruling. Therefore, the original authority was instructed not to rely on the Goa ruling during re-adjudication.4. As a result of the above considerations, the court allowed the appeal and the writ petition. The orders from the Appellate Authority and the Original Authority were set aside, and the matter was remanded to the Assessing Officer for fresh adjudication. The appellant was directed to submit a comprehensive reply with supporting documents within four weeks for a fair re-adjudication process.5. The court emphasized that the Assessing Officer should use the power under Section 73 of the Act, as corrected by the Appellate Authority, instead of Section 74. The decision also led to the allowance and disposal of any connected applications.