M/S Aavanti Solar Energy Private Limited vs. The Joint Commissioner Of Central Tax
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The petitioner, M/s. Avanti Solar Energy Private Limited, filed a writ petition before the High Court of Karnataka challenging an Order-In-Original (No. 147/JC/BNW/GST/2023-24) dated 28.03.2024, passed by the Joint Commissioner of Central Tax (Respondent No. 1). The petitioner sought to quash the demands confirmed in paragraphs 28, pages 53-54, relating to issues (b), (c), and (g) of the impugned order. The petitioner argued that the demand for liquidated damages was contrary to Circular No. 178/10/2022/GST dated 03.08.2022, issued by the Government of India. The respondents supported the impugned order and contended that the writ petition had no merit.
Held
The Court held that the impugned order-in-original dated 28.03.2024 was vitiated due to the non-consideration of Circular No. 178/10/2022/GST dated 03.08.2022, issued by the Central Government. This circular provided guidelines regarding the applicability of GST on liquidated damages. The Court found that this circular, which was crucial for determining the validity of the demand, had not been adverted to or considered by the respondent authority while passing the order. Consequently, the Court set aside the impugned order and remitted the matter back to Respondent No. 1 for reconsideration. The Court explicitly stated that it was not expressing any opinion on the merits or demerits of the rival contentions and reserved liberty for the petitioner to file further pleadings and documents. The operative directions included allowing the writ petition, setting aside the impugned order, and remitting the matter for fresh consideration in accordance with law, bearing in mind the circular.
Key Issues
1. Whether the demand for liquidated damages confirmed in the Order-In-Original is vitiated due to the non-consideration of Circular No. 178/10/2022/GST dated 03.08.2022 issued by the Government of India? Petitioner's Contention: The petitioner argued that the demand for liquidated damages was contrary to the aforementioned circular. They contended that the failure of the respondent authority to consider this circular renders the impugned order invalid and liable to be quashed. Respondents' Contention: The respondents supported the impugned order and argued that the writ petition lacked merit and should be dismissed. They did not specifically address the contention regarding the circular in the provided text.
Sections Cited
Circular No. 178/10/2022/GST
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, the petitioner seeks the following reliefs:
“A) Issue a writ of certiorari or such other writ, order or direction as this Hon’ble Court may deem fit to quash the Order-In-Original No. 147/JC/BNW/GST/2023-24 1255/24- F.NO.GEXCOM/ADJN/GST/ADC/554/2022 DIN No. 20240357YX0000722084 dated. 28.03.2024 passed by the Respondent No. 1 in so far as the demands confirmed in para 28 pages 53-54 relating to issue (b), (c) and (g) in Annexure-F.
b) To pass such other order or orders, directions and writs as this Hon’ble High Court may deem fit in the facts and circumstances of the case, and in the interests of justice, including the costs of this writ petition.”.
Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record.
In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned order at Annexure-F dated 28.03.2024 in order to NC: 2024:KHC:36649 point out that the demand towards liquidated damages from the petitioner is contrary to the Circular No.178/10/2022/GST dated 03.08.2022 issued by the Government of India. It is submitted that non-consideration of the said circular by the respondents would vitiate the impugned order and consequently, the impugned order deserves to be quashed.
Per contra, learned counsel for the respondents would support the impugned order and submits that there is no merit in the writ petition and that the same is liable to be dismissed.
Though several contentions have been urged by both sides in support of their respective claims, a perusal of the impugned order or the order-in-original dated 28.03.2024 with the aforesaid circular dated 03.08.2022 issued by the Central Government including laying down guidelines as regards applicability of GST on liquidated damages had not been adverted/considered in the impugned order, which is vitiated on account of non-consideration of the said circular.
Under these circumstances, without expressing any opinion on the merits/demerits of the rival contentions, I NC: 2024:KHC:36649 deem it just and appropriate to set aside the impugned order and remit the matter back to respondent No.1 for reconsideration afresh in accordance with law.
In the result, I pass the following: ORDER i. The Writ Petition is allowed. ii. The impugned order-in-original at Annexure-F dated 28.03.2024 passed by respondent No.1 is set aside. iii. The matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law bearing in mind the Circular dated 03.08.2022 issued by the Government of India. iv. Liberty is reserved in favour of the petitioner to file pleadings, documents etc., before respondent No.1, who shall consider the same in accordance with law. v. All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same. (S.R.KRISHNA KUMAR) JUDGE
BMC: List No.: 1 Sl No.: 30
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.