Navkar Ispat PVT. LTD vs. State Of Gujarat

Held

The Court, having heard both parties, found merit in the petitioner's request for an assessment to be framed. The Court acknowledged the petitioner's contention that the amount was collected without proper procedure and the revenue's concession that an assessment should be framed. The Court directed the respondents to frame the assessment in accordance with the law at the earliest, within a period of three months from the date of receipt of the order. Once the assessment is framed, the petitioner would be at liberty to proceed further as per law. The Court did not explicitly decide on the return of the collected amount at this stage, focusing instead on the procedural step of assessment. The issue of whether the initial collection was without authority of law was implicitly deferred pending the assessment.

Facts

Navkar Ispat Pvt. Ltd. (the petitioner) filed a writ application challenging the action of the respondent department (Respondent No. 2) in collecting Rs. 10,14,036/-. This amount was recovered during a spot visit conducted on April 4, 2019, under the Central Goods and Service Tax Act, 2017. The recovery was based on the premise that certain Input Tax Credit was not allowable and there was a difference in stock. The petitioner contended that the amount was recovered without due authority of law or proper procedure. The petitioner sought directions for the return of the collected amount or, alternatively, for the framing of an assessment or provisional assessment after providing an opportunity to submit their case.

Key Issues

1. Whether the collection of Rs. 10,14,036/- by the respondent department during the spot visit on April 4, 2019, was without authority of law and due procedure, as alleged by the petitioner? 2. Whether the petitioner is entitled to the return of the collected amount of Rs. 10,14,036/-? 3. Whether the respondent department should be directed to frame an assessment or provisional assessment pursuant to the spot visit, after affording a reasonable opportunity to the petitioner? Petitioner's Argument: The petitioner argued that the amount was collected coercively and without following the proper legal procedure. They sought the return of the amount or, alternatively, a direction for the department to frame an assessment or provisional assessment. Revenue's Argument: The learned AGP for the respondents fairly submitted that there should be no difficulty in directing the concerned department to frame the assessment at the earliest.