M/S. Golden Mesh Industries vs. Assistant Commissioner (State Tax)

HIGH COURT FOR THE S' rs,;;;,i,'615, Pj lf }fjif,#i Ar HvDERABAD WEDNESDAY,THE^THIRTY FIRST DAY OF MARCH TWo rHousAND AND rwer.rri dr.re Between: AND M/s Golden [V1esh rndustries rep b^y^ its proprietor, Mr.pradecp Kumar Gupta, Begd office Survey No. 565 56'8 erir,iita-'vlirase. raroignasairvrr"irr, Elikatta Vitlage. [r.4ahbubnagar Distrrc1. f eia"ga"a-i062.1 a PRESENT ...PETITIONER issue a Writ of Certiorari or any other appropriate writ or order or direction quashing the Assessment Order dated 27.12.201 9 vide Reference No. ASSlVT13l112019 for the tax period November, 2018 as illegal, arbitrary and contrary to the provisions of the Central Goods and Services Tax Act, 2017 and the Telangana Goods and Services fax Ac|,2017, 1. Assistant Commissioner (State Tax), Rajender Nagar-ll Circle, Hyderabad. 2. Deputy.State Tax Officer, Rajenderanagar-ll Circle, Saroornagar Dlvision, Hyderabad. 3. St4e of Telangana, rep. by its Principal Secretary to Government, Revenue (CT-ll) Department, Secretariat, Hyderabad. 4. lClCl Bank, rep._by its Branch Manager, 4-3-1r4glA, BpR Towers,Attapur, Rajendranagar-500 048, Ranga Reddy District. 5. hdian Bank, rep. by its Branch Manager, (lvlerged entity of Al lahabad Bank Bank) 3-6-435, Main Road, Himayatnbgar, Hyclerabad., Rep. by its Branch Manager. 6. Union of lndia, rep. by its Secretary to Government, Ministry of Finance, New Delhi. ,..RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to (i) THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND THE HONOURABLE SRI JUSTICE T.VINOD KUMAR WR|T pETtTtON NO: 7789 OF 2021 (ii) set aside the Attachment Notice dated 19.03.2020 of the Proprietor's Bank Account issued to the 4th Respondent Bank by the 1st Respondent which has taken effect from 17.12.2020 for the tax period November 20'18, (iii) set aside the Distraint Order dated 09.03.2021 issued under the Telangana Revenue Recovery Act ll of 1864 in respect of the property situated at Sy. No. 565, 568 Elikatta Village, Farooq Nagar [\/andal, Mahbubnagar for the Tax Period November 20i 8, (iv) set aside the Demand Notice Prior To Attachment dated 20.03.2021 issued under the Telangana Revenue Recovery Act ll of 1864 in respect of the property situated at Sy. No. 565, 568 Elikatta Village, Farooq Nagar lvlandal, Mahbubnagar for the tax period Novem ber 2018 lA NO: 1 OF 2021 Petition under Section 1S1 CpC praying that in the circumstances stated in the affidavit filed in support of the grant stay of collection of dispute Rs.9,99,000/- levied by the impugned Respondent dated 27.12.2019 for the the Writ Petition as otherwise the hardship. lA NO: 2 OF 2021 petition, the High Court may be pleased to d tax, interest, late fee and penalty of best judgment assessment order of the 1st period November 2018 pending disposal of Petitioner will be put to severe loss and Petition under section 151 cpc praying that in the circumstances stated in the affidavit fited in support of the petition, tie High C.rrt ;;;;;'p["*O t" suspend the attachment notice dated 19.03.i020 isJued oy tne-ist n[ffioent pending disposar of the above writ petition as other*ise the petitioner *irl -0" put to severe loss and hardship. lA NO: 3 OF 2021 Petition under Section 151 cpc praying that in the circumstances stated in the affidavitliled in support of the petitio;, t"n. iigf, corit r"v nl"o[r""a a suspend the Distraint order dated os.oz.zoil & Demand Notice prior fo Attachment dated 20.03.2021 issued ,no".mu rutrngana Revenue Recoverv Act rr of 1864 in respect of the property srtuated at sv N"o. sos. soa irirrJu"'virLg" Farooq Nagar Mandar, Mahbubnagar p""Ji"g di;i,"sar of the above writ petition as otherwrse the petitioner will be [ut io ,"u"i" foi. and hardship. Counsel for the petitioner: M/S. SHRADDHA GUpTA counsel for the Respondent Nos. 1 to 3: sRr. SAr KRTSHNA, AGp FoR counsel ror the Respondent No. u, r*,. flXir"Alt,foTEltt Counsel for the Respondent Nos. 4 & 5: The Court made the following: HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO HONOURABLE SRI JUSTICE T.VINOD KUMAR PE AND TITIONNo.7789 of2 021 ORDER: (per Hon,ble Sri Justice M.S. Ramachandra Rao) This Writ petition is filed challenging the Assessment Order dt.27-12-2019 passed by the I,r respondent under the .felangana GST Acl, 2017 in relation to rhe petitioner for the tax period November, 2018. 2. It is not in dispute that petitioner did not file GSTR_3B retum for the said month of November, 201 g and notice was issued on 29-01-2019 under Section 46 of the Telangana GST Act, 2017 waming the petitioner that if it did not file its return within l5 days, tax liability would be assessed under Section 62 of the Act based on the relevant material availabre with the l't respondent arong with interest and penalty. 3. Petitioner did not comply with the request to file GSTR_3B return, and best judgment under Section 62 of the Act was made through the impugned order by I'r respondent. In the impugned order, the 1't respondent states: ''1. Discussions uttl l;intlings Yotrr Averoge nonthly SGS'[ Tox is Rs.1,50,000/-. Therefore your turnover under SGST. CGST and IGST' ora orriyed to the best of my judgnenl to be 3 times the monthly Average ntd the Tax for the above tctr period l.e. .SG.II Rs.1,50,000/-, CGST Rs.1.50,000/- and IGST Rs. I ,50,000/-. " 4. Leamed counsel for petitioner contends that though the l't respondent is entitled to do best judgment in the absence of filing of GSTR-3B, the method adopted by 1" respondent in multiplying by 3 times the monthly SGST tax of Rs'50,000/- to determine the tax liability is arbitrary and not based on any principle' He also contendedthatl00%penaltyhasbeenleviedwithoutindicatingunder which provision of the Act the same has been levied' 5 Sri Sai Krishna, learned Assistant Govemi.uent Pleader attached to the Olfice of the learned Advocate General appearing lbr respondents is unable to point out what is the principle followed by the 1't respondent in doing best judgment assessmellt in the manner indicated above i.e. multiplying 3 times the monthly average SGST, and adopting it as a basis for assessing the petitioner to tax for the month of November, 2018. He also couLd not indicate under which provision of law 100% penalty is levied on the petitioner 6. In this view of the matter, since the impugned order appears to be prima facie arbitrary and contrary to the provisions of the Telangana GST Act,, 2017,, the impugned order is set aside; the matter is remined back to the l'r respondent for fresh consideration; the 1't respondent shall issue notice to the petitioner indicating the method of assessment under the best judgment assessment provision contained in Section 62 of the said Act; grant a personal hearing to the petitioner; and then pass a reasoned order both with regard to levy of tax but also with regard to interest and penalty afresh within eight (g) weeks from the date of receipt of a copy of this order. In view of setting aside of the impugned order dt.27-12_201g passed by l.r respondent, consequential attachment orders/gamishee orders issued by respondent Nos.1 to 3 are also set aside. 7 The Writ Petition is allowed as above. No costs. 8 Consequently, miscellaneous petitions, pending if any, shall stand closed. ,TRUE COPY' SD/-K.AMMAJI ASSISTANT REGISTRAR iL__- SECTION OFFICER To, 1. Assistant commissioner (State Tax), Rajender Nagar-ll circle' Hyderabad' 2. Deputy State Tax oti""t)"n'IiJnolianag''r-tr Circlel Saroornagar Divislon' a !il!"Ji:3lrar secretary to Government. Revenue (cr-,) Department, state o{ " i"irnoini, Secretariat'Hvderabad ^ iilieYlli.h Mi^rd"i.-r'iidt eanx' +-o-tas/A' BPR rowers'Attapur' - R;i";;;;;;g;i-sb"o 04B Ransa ReddY-District, , 5 Thb Branch lvlanaser, (il;6;'J;;iltv 6t nirarraoao Bank Bank) 3-6-435 tndian Bank, H,tain noaol'El,i'iylt""g'i nvoerabad Rep by its Branch lvlanaqer. 6 The S-ecretarv to Governm-ent' Union "f lllg'Sil?t'y of Finance' New Delhi' i. 3l: 33 3 Sit R:F1!:ef".i'l1li{ii1:iivi":'^"9fi1 stut" or re ansana ;. i;; 66tio ir'" Advocate General' High court tor (our) 10.Two CD CoPies Ptu ;:3:: HIGH COURT DATED:31/03/2021