Irfan Akhtar vs. The Union Of INDIA

Held

The Court disposed of the writ petition with a direction to the petitioner to approach the Assessing Authority. The petitioner is to submit all relevant documents, including proof of tax paid, details of tax liability, and the terms of the agreement executed during the VAT period. The Court acknowledged that the GST Act came into effect during the intervening period, leading to a difference in tax rates between the VAT regime and the subsequent GST regime. The Assessing Authority is directed to resolve this discrepancy after providing the petitioner with a due opportunity to represent their case and submit the required documents, including the amount of tax already paid. The Court did not decide on the validity of the notices or the quantum of tax liability but remanded the matter for adjudication by the Assessing Authority.

Facts

The petitioner, Irfan Akhtar, a registered contractor with the Government of Bihar, Building Construction Department, entered into an agreement on June 13, 2016, for road construction under the Prime Minister Gramin Sadak Yojna. Upon submitting bills for work done, 1% GST and 1% CGST were deducted. Subsequently, the Commercial Tax Department issued notices, including a demand notice dated January 9, 2021, from the Joint Commissioner of State Tax, Bagaha Circle. These notices asserted that the petitioner should have deducted 1.5% VAT on the bills submitted. The petitioner did not submit any representation or show cause against these notices. Consequently, a demand notice for the remaining tax amount was issued, leading the petitioner to file the present writ petition challenging the demand notice and related notices.

Key Issues

1. Whether the demand notice dated 09.01.2021, and other notices dated 25.01.2020 and 16.12.2020, issued by the Joint Commissioner of State Tax and Assistant Commissioner of State Tax, respectively, under the BGST/CGST Act, 2017, imposing penalty on the petitioner are liable to be quashed, considering the agreement dated 02.06.2016 and work done prior to the implementation of the GST Act, and payments made by the Government of Bihar in light of GST implementation? (Mixed question of law and fact, concerning Sections 51, 73, 74 of the BGST/CGST Act, 2017 read with Rule 142(1)). Petitioner's contention: The petitioner argued that the authorities wrongly imposed penalty under the BGST/CGST Act at the place of VAT, given the agreement and work executed during the VAT regime, and subsequent GST implementation. The petitioner sought a direction for payment of any taxes due under VAT/service taxes prior to the GST Act and for proper time to file a show cause and receive a hearing. Revenue's contention: The judgment does not record any specific arguments presented by the revenue or state respondents.