Mohanraj vs. The Assistant Commissioner Of GST And Central Excise

Facts

The petitioner, Mohanraj, filed a writ petition challenging an order dated 28.02.2022, passed by the Assistant Commissioner of GST & Central Excise, Trichy II Division. The impugned order was based on the premise that the petitioner had wilfully suppressed receipts of gross amounts, leading to short payment of service tax for the period 2015-2016. The revenue determined the suppressed taxable value at Rs.52,08,186/-, liable to tax at 14.5%, amounting to Rs.7,55,187/-, and also levied cess, interest, and penalty. The petitioner contended that they did not render any service, and the liability, if any, lay with the third respondent, Chennai Medical College & Research Centre (SRM). The court noted that resolving this dispute would involve examining disputed questions of fact.

Held

The Court declined to delve into the factual dispute regarding who rendered the service and who is liable for the tax, stating that such an examination is not typically undertaken in a writ jurisdiction under Article 226 of the Constitution. Instead, the Court granted the petitioner a final opportunity to present their case before the respondent authority. This opportunity was conditional upon the petitioner depositing 25% of the disputed tax amount within four weeks. Upon compliance, the respondent authorities were directed to permit the petitioner to submit their representation with supporting documents and then pass orders in accordance with the law. The Court clarified that if the conditions were not met, the impugned order would stand revived. It was also noted that upon payment of 25% of the disputed taxes, the attachment of the petitioner's bank account would be lifted. The Court expressly left undecided the merits of the petitioner's claim regarding the tax liability.

Key Issues

1. Whether the impugned order dated 28.02.2022, passed by the Assistant Commissioner of GST & Central Excise, Trichy II Division, is illegal, null and void, ultra vires, without jurisdiction, and without authority, as alleged by the petitioner? Petitioner's Contention: The petitioner argued that they were not involved in rendering any service, and the service provider was the third respondent, Chennai Medical College & Research Centre (SRM). Therefore, any tax liability should be on the third respondent and not the petitioner. The petitioner sought an opportunity to demonstrate this before the respondent authority. Revenue's Contention: The revenue, through the Assistant Commissioner of GST & Central Excise, passed the impugned order based on a discrepancy between the Income Tax returns and Service Tax returns (ST-3), indicating suppression of taxable value by the petitioner. The revenue agreed to grant an opportunity to the petitioner only upon payment of 25% of the disputed taxes.