Tvl.Muralikrishna Infracon Bangalore-Private Limited vs. The Commissioner Of Commercial Taxes

Facts

The petitioner, Tvl.Muralikrishna Infracon Bangalore Private Limited, filed a writ petition challenging an order dated 30.12.2023 passed by the State Tax Officer, Madurai. This order was an assessment made under Section 73 of the TNGST Act. The assessment was initiated due to a mismatch between the input tax credit availed by the petitioner and the details uploaded on the GST portal. The petitioner contended that the transaction was genuine, but the seller failed to upload the relevant invoice. They argued that they should not be held liable for the seller's default and that they faced portal issues during the relevant period. The petitioner also stated that they had already paid 15% of the TNGST liability and 16% of the CGST liability.

Held

The Court held that the impugned order dated 30.12.2023 is set aside, subject to the condition that the petitioner deposits an additional 10% of the disputed tax determined in the impugned order. The Court reasoned that considering the nature of the transaction pleaded, the circumstances under which the petitioner claimed to have not properly participated in the enquiry, and the fact that the transaction occurred in the first year of the TNGST regime, it was inclined to grant the petitioner one opportunity. The Court noted that the petitioner had already paid 15% of the TNGST and 16% of the CGST liability. The matter is remanded back to the file of the second respondent (State Tax Officer) for fresh assessment proceedings. The petitioner is directed to cooperate with the further enquiry and produce necessary documents. The assessment proceedings are to be completed expeditiously. No costs were awarded.

Key Issues

1. Whether the petitioner can be held liable for input tax credit when the seller failed to upload the relevant invoice, thereby causing a mismatch on the GST portal, under Section 73 of the TNGST Act? The petitioner argued that the transaction was genuine, and the default was solely on the part of the seller in not uploading the invoice. They contended that they should not be penalized for the seller's omission and that they faced technical difficulties with the portal. They sought an opportunity to cooperate with the authorities. The respondents, represented by the Additional Government Pleader, submitted that in similar matters, a deposit of 25% of the tax liability is usually directed. They did not present further arguments on the merits of the petitioner's claim regarding the seller's default or portal issues.