M/S Ani Technologies Privat Limited vs. State Of Telangana And 4 Others

By filing this petition under Article 226 of tl:,e Constitutionoflndia,petitionerhaschallengedlegalityand validity of the order dated O4'O2'2O22 issued by the 3'd respondent levying total tax (CGST + SGST) of Rs.2,2l,38,236.4OfortheauditperiodApril'2O19toMarch' 2O2O aswell as the consequential notice dated 08'06'2022'

Petitioner before us is a private limited company registered under the provisions of the Companies Act' 1956' having its registered office at Bengaluru in the State of Karnataka though it has its business presence in various r I I States including the State of Telangana. petitioner under the trade name 'Ola, is engaged in the business of providing internet platform/mobile application services where the dliver partners provide passenger transportation services to t- the customers. It is clarified that petition er per se is not engaged in providing passenger transportation service. It is only providing an electronic platform to the driver partners and to the customers.

Petitioner is registered with the Goods and Services Tax (GST) authorities in the State of Telalgana.

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.2,21.,3a,236.00 for the period under consideration.

A notice for short payment of tax dated \ O2.O3.2O2O was issued to the petitioner by the 3.d respondent. As per the said notice, the supplier of service and place of supply were found to be located in the State of Telangana. Therefore, a view was taken by the 3.d respondent that State Goods and Services Tax (SGST) and Centra-l 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 for short payment of tax was issued.

In response thereto, petitioner submitted a detailed reply on 19.O3.2O2O pointing out that petitioner had rightly paid IGST for the audit period and was not required to pay CGST and SGST.

By the impugned order dated O4.O2.2O22,. explanation furnished by the petitioner was not accepted whereafter 3.d 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, 2019 to March, 2O2O, a total /amount of Rs.2,2 1,38 ,236.4O covering both CGST and SGST \ were required to be paid. Since the dealer (petitioner) by not 3 i paylng CGST and SGST has committed an offence thereunder, penalty proceedings have been initiated. This is followed by notice dated 08.06.2022 issued by the 3'a respondent to the petitioner for payment of the above tax. g. Learned counsel for the petitioner has referred to Section 7 of the Integrated Goods and Services Tax Act, 2Ol7 (briefly referred to hereinafter as the 'IGST Act') and submits that as per Sub-Section (3) thereof, supply of services where the location of the supplier and the place of supply are in two different States; or in two different Union Territories; or in one State and one Union 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 Section 12 of the IGST Act' As per Section 8(2) of the IGST Act, subject to the provisions of Section 12 of the IGST Act, supply of services where the location of the supplier and the place of supply of services are in the same State or same , Union Territory, it shall be treated as inter-state supply' Section 12 of ttre IGST Act deals with place of supply of 4 I services where location of supplier and recipient is in India' Sub-section (9) is relevant' It says that the place of supply of passenger transportation service to a registered person shall be the location of such person and if it is to a person other than a registered person, it shall be the place where the passenger embarks on the conveyance for a continuous journey. Thus, what Sub-Section (9) of Section 12 of the IGSTActprovidesisthattheplaceofsupplyofpassenger transportation service to a registered person would be the location of such person, but if the person is other than a registered person, it shall be the place where the passenger embarks on the conveyance for a continuous journey' '

Learned counsel for the respondents submits that petitioner should pay the demand and claim refund of IGST' AlternativelY he can file aPPeal'

Submtssions made have been considered' 12. lt is prima facie evident that if the passenger is not registered under GST and avails transportation service' 5 r )

Keeping the above legal provision in mind, v7s maI advert to the impugned order dated.04.02.2022. Though the 3'd respondent has referred to provisions of Section l2(9) of the IGST Act, he has however erroneously recorded that in case of unregistered recipient, the place of supply shall be the location of such recipient, which prima facie appears to be in contravention of Section 12(9) of the IGST Act. Thereaffsl, Jra respondent levied the tax as noted above arrd issued notice for payment.

We are afraid the corrtentions raised by the petitioner, more particularly the requirement to pay IGST under Section l2(9) of IGST Act and correspondingly the non_ liability to pay CGST and SGST insofar the trarsportation \ services rende \ :red 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 withou! _ due application of mind to the legal provision. I W.P.No.25526 of 2O22

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(9) of the IGST Act would go to the root of the contention raised by the petitioner.

Accordingly, we set aside the order dated O4.O2.2O22 and remand the matter back to the 3'd respondent for 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 before the 3'd 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 within a period of four (04) weeks from the date of liling of additional submissions by the petitioner. Needless to say since we have set aside the impugned order dated 04.O2.2022, the consequential notice dated 08.06.2022 would also stand quashed. 7 -7 W.P.No.25526 of 2O22 17 . This disposes of the Writ petition. However, there shall be no order as to costs.

As a sequel, miscellaneous applications pending, if any, in this Writ petition, shall stand closed. -'' D/.K.AMMAJI ASSIST EGISTRARS ,II S N OFFICER 8 To, PS