M/S Ani Technologies Private Limited vs. State Of Telangana

It is the case of the petitioner that for transportation services rendered by the drivers outside the State of Telangana, it has been charged Integrated Goods and Services Tax (IGST) which it has paid. Insofar this case is concerned, petitioner has paid IGST amounting to Rs.2,38,72,1 12.0O lor the period under consideration. 6 . A notice for short payment of tax dated 2 I 02.03.2020 tvas issued to the petitioner by the 3.a W.P.No.25630 of 2022 respondent. As per the said notice, the supplier of service and place of supply were found to be located in the State ol Telangana. Therefore, a view was taken by the 3.d respondent that State Goods and Services Tax (SGST) and Central Goods and Services Tax (CGST) had to be paid by the petitioner and not IGST. Pointing out that a total amount of Rs.325,29,49,802.00 was to be paid by the petitioner, a notice lor short payment of tax was issued. 7. [n response thereto, petitioner submitted a detailed reply on 19.O3.2O2O pointing out that petitioner had rightly paid IGST lor the audit period arrd was not required to pay CGST and SGST. B. By the impugned order dated 04.O2.2022, explanation furnished by the petitioner was not accepted whereafter 3.t respondent took the view that CGST and SGST were required to be paid by the petitioner on its turnover and for the period from April, 2O 18 to March, 2O 19, a total amount of Rs.2,38,72,112.68 covering both CGST and SCST were required to be paid. Since the dealer (petitioner) b_v not 3 I I W.P.No.2563O of 2022 paying CGST and SGST has committed an offence .ihereunder, penalty proceedings have been initiated. This is lbllowed by notice dated 08.O6.2022 issued by the 3'a respondent to the petitioner for payment of the above tax.

Learned counsel for the petitioner has referred to liection 7 of the Integrated Goods and Services Tax Act, 2Ol7 (rriefly referred to hereinafter as the 1GST Act') and submits t.:at as per Sub-Section (3) thereof, supply of services where the location of the supplier arrd the place of supply are in two different States; or in two different Union Territories; or in o:re State and one Unior-r Territory, it shall be treated as a supply of services in the course of inter state trade or commerce though the same is subject to the provisions of Sr-.ction 12 of the IGST Act. As per Section B(2) of the IGST At:t, subject to the provisions of Section 12 of the IGST Act, stLpply of services where the location ol the supplier and the place of supply of services are in the same State or sarne Utrion Territory, it shall be treated as inter-state supply. 4 pection 12 of the IGST Act deals r.vith place of supply of 1

Learned counsel for the respondents submits that petitioner should pay the demand and claim refund of IGST. Alternativelv he can file appeal. 1 1. Submissions made have been considered. 12. lt is prirna facie evi.dent that if the passenger is 5 not registered under CST and avails transportation service, I W.P.No.2563O of 2O22 by way of legal fiction the place of supply would be the place where the passenger embarks or starts his journey.

Keeping the above legal provision in mind, we may irdvert to the impugned order dated 04.02.2022. Though the i}.d respondent has referred to provisions of Section l2(9) ot the IGST Act, he has however erroneously recorded that in c:ase of unregistered recipient, the place of supply shall be the lrcation of such recipient, which pima facie appeats to be in contravention of Section 12(91 of the IGST Act. Thereafter, 3.a r,espondent levied the tax as noted above and issued notice for payment.

We are afraid the contentions raised by the p,3titioner, more particularly the requirement to pay IGST under Section 12(91 of IGST Act and correspondingly the non- li:rbility to pay CGST and SGST insofar the transportation se'rvices rendered by the drivers were not considered in the right perspective. That apart though the impugned order is a lengthy one, the substantive portion appears to be without dtre application of mind to the legal provision.

That being the position, we would not like to relegate the petitioner to the forum of appellate remedy since the question as to applicability of Section 12(91 of the IGST Act would go to the root of the contention raised by the petitioner.

Accordingly, we set aside the order dated 04.O2.2O22 and remand the matter back to the 3.d respondent lor a fresh decision in accordance with law after giving notice of hearing as well as opportunity of hearing to the petitioner. Since the petitioner is before the Court, let him appear belore the 3.,1 respondent within a period of three (03) weeks from today and file additional submissions, if considered necessary. Third respondent to consider the submissions of the petitioner and thereafter pass fresh orders in accordance with law rvithin a period of four (04) weeks from the date of filing of additional submissions by the petitioner. Needless to say since we have set aside the impugned order dated 04.O2.2O22, the consequential notice daJed 08.06.2022 v,o:uld also stand quashed. 7 t

This disposes of the Writ petition. However, there l;hall be no order as to costs.

As a sequel, miscellaneous applications pending, il-any, in this Writ petition, shall stand closed. I.NAGALAKSHMI DEPUTY ISTRAR //' SEC FFICER \ To 1. 2. 3. 9. 10 S.A PS 4 5 6 7 8 The Secretary, Finance Department Sth Floor, Burgula Rama Krishna Rao Bhavan, NH 44, Hill Fort, Adarsh Nagar, Hyderabad, State of Tetangana at Telangana 500063. The Special Commissioner (ST), Enforcement Wing, Commercial Tax Department, C.T. Complex, Nampally, Hyderabad --500 00 j. The Assistant Commissioner (ST)-1, Enforcement Wing, Commercial Tax Department, C.T. Complex, Nampally, Hyderabad - 50b 001. Tl",e Assistant Commissioner, Hyderabad Rural, STU-2 Hyderabad. The J^oint Commissioner, Appeals - I Commissionerate, Hyderabad_ Trrro CCs to GP FOR FINANCE AND PLANN|NG, High Court for the State of Telangana at Hyderabad. [OUT] Orre CC to SRI.MAMILLA ASHWIN REDDY, Advocate IOPUC] OTIe CC to SRI.K.RAJI REDDY SENCoR SC FoR CoMMERCIAL TAX IoPUCI Two CD Copies One spare copy I I