2024 (7) TMI 739 - HC - GST

Landmark GST Tax Dispute Resolved: Petitioner Liable for Outstanding Taxes, Penalty Reassessment Ordered Within Six Months

HC ruled on GST tax dispute, finding petitioner liable for outstanding tax and interest. Court directed respondents to reassess penalty within six months, ... Jurisdiction to pass impugned order - It is submitted that the impugned proceedings of the respondent is clearly without jurisdiction in as much as the petitioner is under the administrative control of the State GST Authorities whereas the impugned order has been passed by the Central GST Authority - HELD THAT:- The operative portion of the impugned order itself indicates that the petitioner has paid a sum of Rs. 74,32,540/- as against the tax demand of Rs. 78,74,766/- leaving the balance of Rs. 4,42,226/-. This amount has to be paid by the petitioner without prejudice to the rights of the petitioner pursuant to the remand order. It is noticed that the petitioner is also required to pay a sum of Rs. 11,08,324/-. The petitioner was directed to pay a sum of Rs. 3,00,000/- at the time of admission in this Court on 01.11.2022. It is not clear whether the petitioner has complied with the same. The delay in payment of tax attracts interest and therefore, the petitioner has to pay the interest. This amount is, therefore, also directed to be paid by the petitioner without prejudice to the rights of the petitioner if the amounts have already not been paid by the petitioner. Imposition of penalty under Section 122 of the GST Act, 2017 - HELD THAT:- The respondents are directed to pass a fresh orders on merits and in accordance with law within six months from today. In case the recommendations of the 53rd GST council meeting is implemented, the penalty may be dropped. Petition disposed off. Issues:Challenge to Order-in-Original dated 20.09.2022 by petitioner; Jurisdictional conflict between State and Central GST Authorities; Double liability on petitioner; Imposition of penalty unjustified; Compliance with tax payment; Payment of interest; Recommendations by GST Council; Disposal of Writ Petition.Analysis:The petitioner challenged the Order-in-Original dated 20.09.2022, claiming that the respondent's proceedings lacked jurisdiction as the petitioner falls under the State GST Authorities, not the Central GST Authority. The petitioner argued against being held liable twice by different authorities and contended that the penalty imposed was unjustified. The petitioner emphasized having paid the tax liability belatedly and the interest due, questioning the need for penalty. The respondent defended the decision citing an appeal against a similar case and highlighting that both State and Central Authorities operate under CGST and SGST Acts.The court noted that the petitioner had paid a portion of the tax demand, leaving a balance to be settled. Additionally, the petitioner was directed to pay a specific sum at the time of admission, with interest accruing for any delay in payment. The court considered the imposition of penalty under Section 122 of the GST Act, mentioning the GST Council's recommendations for concessions on interest, pending notification issuance by the Governments. The judgment directed the petitioner to pay the outstanding tax amount and interest, adjusted for previous payments, within a specified time frame.Regarding the penalty, the court ordered the respondents to reevaluate and issue fresh orders within six months, aligning with the law and potential implementation of GST Council recommendations. The judgment specified a timeline for the petitioner to settle the differential tax and interest. The disposal of the Writ Petition included no costs and instructed the closure of connected miscellaneous petitions, providing a comprehensive resolution to the legal dispute.