M/S. Vivegam Travels vs. The Assistant Commissioner (St) (Circle)

Facts

The petitioner, M/s. Vivegam Travels, filed four writ petitions challenging orders passed by the Assistant Commissioner (ST) under Sections 63 and 74 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017. The disputes pertain to the financial years 2018-19 and 2019-20. The petitioner contended that there was an overlap between demands previously confirmed under Section 63 and subsequent demands confirmed under Section 74 for the same periods. The impugned orders were dated 23.05.2022, 29.12.2023, and 06.01.2024. The amounts in dispute were Rs. 45,88,096/- and Rs. 3,62,82,788/- for 2018-19 and 2019-20 respectively under Section 63 notices, and Rs. 1,42,58,318/- and Rs. 1,35,54,604/- for 2018-19 and 2019-20 respectively under Section 74 notices.

Held

The Court held that the challenge to the impugned orders on the ground of overlapping demands between Section 63 and Section 74 assessments for the same financial years could not be countenanced. On this specific ground, the writ petitions were liable to be dismissed. However, the Court noted that the petitioner had not replied to the show cause notices preceding the impugned orders, attributing this to the pendency of other writ petitions. Considering that the matter required detailed consideration, the Court quashed the impugned orders. The cases were remitted back to the respective respondents to pass fresh orders on merits and in accordance with law. This was made subject to the petitioner depositing 25% of the disputed tax for each financial year. Any amount already pre-deposited, specifically Rs. 9,90,513/-, was to be treated as part of this required pre-deposit. The ratio decidendi is that while the ground of overlap might not be a valid reason for dismissal in isolation, procedural fairness and detailed consideration necessitate a fresh opportunity for assessment, provided a partial pre-deposit is made.

Key Issues

1. Whether the impugned orders passed under Section 74 of the TNGST Act, 2017, suffer from an overlap with demands previously confirmed under Section 63 of the same Act for the same financial years (2018-19 and 2019-20), rendering them illegal, arbitrary, and without jurisdiction? Petitioner's arguments: The petitioner argued that the subsequent demands under Section 74 were for the same tax periods and essentially covered the same transactions or income that had already been assessed and confirmed under Section 63. This, they contended, amounted to double taxation and a violation of principles of natural justice and statutory provisions. They sought to quash the impugned orders and for fresh assessment orders after affording a personal hearing. Revenue's arguments: The learned Government Advocate for the respondent revenue referred to the relevant portions of the impugned orders passed under Section 74, detailing the income as per Profit & Loss statements, various collection accounts, and lorry hire charges received. They presented a breakdown of the total income, less already assessed amounts, to arrive at the determined turnover and the tax due under CGST and SGST.