M/S Netway Solution (A Sole Proprietor Ship Firm) vs. The Union Of INDIA
Original PDF →Facts
The petitioner, M/s Netway Solution, a sole proprietorship, was assessed for the year 2019-20. The assessment order, Annexure-P/4, was based on information from the Central Warehousing Corporation (CWC) indicating a gross payment of Rs. 1,73,53,732/- to the petitioner in March 2020. The petitioner's appeal against this assessment was dismissed, as per Annexure-P/10. The petitioner presented Annexure-P/9, a letter from CWC dated 01.11.2021, admitting that the figure of Rs. 1,73,53,732/- was a mistake and the actual figure was Rs. 17,35,400/-. The petitioner argued they would not have knowledge of CWC's returns and that the TDS deducted (Rs. 17,354/-) aligns with the corrected figure.
Held
The Court acknowledged a human error in the figure provided by the Central Warehousing Corporation (CWC). It noted that CWC had categorically stated that the figure of Rs. 1,73,53,732/- was a mistake and the actual figure was Rs. 17,35,400/-. The Court also considered the petitioner's submission that the TDS deducted (Rs. 17,354/-) was consistent with the corrected amount. Consequently, the Court directed the Assessing Authority to verify the TDS deducted and consider the authenticated copy of Annexure-P/9. The assessment order (Annexure-P/4) and the appellate order (Annexure-P/10) were set aside to facilitate this verification and modification of the assessment. The ratio decidendi is that assessments based on demonstrably erroneous figures, especially when admitted by the source of the information and supported by other evidence like TDS, should be rectified.
Key Issues
1. Whether the assessment order, which relied on a mistaken figure provided by the Central Warehousing Corporation (CWC), is sustainable in law, particularly concerning Section 73 of the CGST Act, 2017 (or equivalent SGST provision)? Petitioner's arguments: The petitioner contended that the assessment was erroneous as it was based on an incorrect figure of Rs. 1,73,53,732/- provided by CWC. They argued that they, as the works contractor, would not be privy to CWC's GST returns. The TDS deducted and paid, Rs. 17,354/-, supports their claim that the actual contract amount was Rs. 17,35,400/-. They relied on Annexure-P/9, a letter from CWC admitting the error. Revenue's arguments: The learned Government Advocate submitted that the GST portal is managed by the GST Council and, at that stage, modifications could not be carried out, implying the initial figure on the portal was binding.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 16-01-2024 2/4 The petitioner is concerned with the excessive assessment made insofar as the works contract carried out as awarded by the Central Warehousing Corporation. The petitioner was assessed for the year 2019-20 by Annexure-P/4 order. The books of accounts were rejected finding that the returns of the Central Warehousing Corporation indicated a gross payment of Rs. 1,73,53,732/- to the petitioner for the month of March, 2020, disclosed in their returns filed before the Tax Department. The assessment was made based on the above figure. An appeal filed was also unsuccessful and the same was dismissed by Annexure-P/10. 2. The petitioner before this Court has relied on Annexure-P/9 dated 01.11.2021 issued by the Central Warehousing Corporation. The Central Warehousing Corporation has specifically admitted that the figures were mistakenly shown as 1,73,53,732/- and the actual figures were 17,35,400/-. It is also seen from Annexure-P/9 that though an attempt was made to amend the figures in the GST Portal, due to acceptance of same by M/s Netway Solution, the amendment could not be carried out.
The learned counsel for the petitioner submits that there is no question of acceptance since the petitioner, who 3/4 is the works contractor would not be aware of the returns filed by the Central Warehousing Corporation. It is also submitted that the TDS deducted and paid over to the State is only Rs. 17,354/-, which aligns with the contention of both the petitioner and the Central Warehousing Corporation that the total contract amount for the month is only 17,35,400/-.
The learned Government Advocate on instructions submits that the portal is managed by the GST Council and though returns could be modified, at this stage there could be no modification carried out.
We cannot but notice that there is a human error involved, especially when the Central Warehousing Corporation has categorically said that there was a mistake insofar as indicating the figure of payment disbursal as 1,73,53,732/- while the actual figure was 17,35,400/-. In fact, the specific contention of the petitioner was also that TDS was deducted only insofar as the amount of Rs.17,35,400/-, which is also available in the portal. Considering that there is a human error occasioned, we are of the opinion that the Assessing Authority can be directed to verify the TDS deducted and also keep on record the original or authenticated copy of Annexure-P/9 and modify the assessment accordingly. Annexure-P/4 and P/10 are 4/4 set aside only to facilitate the exercise as we direct herein above.
The writ petition would stand disposed of with the above observations.
sharun/- (K. Vinod Chandran, CJ) ( Rajiv Roy, J) AFR/NAFR NAFR CAV DATE Uploading Date 18.01.2024 Transmission Date
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.