M/S R K Transport And Construction LTD Represented Thro Its Sri Ujjal Kumar Chatterjee vs. The State Of Jharkhand Thro Its Secretay Commercial Tax Department

Held

The Court held that the official respondents are obligated to initiate proceedings under Section 76 of the Jharkhand GST Act, 2017, against the 6th respondent. The Court found the official respondents' contention that they cannot act because the 6th respondent is registered with the Central GST authorities to be contrary to Section 76(1) of the Jharkhand GST Act, 2017. This section mandates that any person who collects GST and does not pay it to the government must forthwith pay it. The Court reasoned that under Section 76(2), the proper officer can direct such a person to show cause why the amount should not be paid and why a penalty should not be imposed. This provision applies to 'every person,' including those not registered under the JGST Act, who collects GST and fails to remit it. Therefore, the official respondents have a bounden duty to take action. The Court also rejected the plea of lack of locus standi, noting the petitioner had provided evidence of payment, including GST, to the 6th respondent, which was not remitted. The Court further held that the principle of res judicata was inapplicable as the previous writ petition was not decided on merits. The Court allowed the writ petition, imposing costs on the 6th respondent and directing the official respondents to initiate proceedings under Section 76 of the Jharkhand GST Act, 2017, against the 6th respondent for collecting tax from the petitioner and not crediting it to the Jharkhand State Government for the financial year 2020-2021, and for withholding the tax amount, thereby preventing the petitioner from claiming ITC. This exercise was to be completed within eight weeks.

Facts

The petitioner, M/s R.K. Transport & Constructions Limited, engaged in coal transportation, availed rental services for commercial motor vehicles from the 6th respondent, M.B. Enterprises, between October 2020 and March 2021. The 6th respondent issued invoices totaling Rs. 73,34,569, including SGST and CGST of Rs. 11,18,832.58. The petitioner claims to have paid these invoices, including the taxes, as evidenced by bank statements. However, the petitioner could not avail Input Tax Credit (ITC) of Rs. 11,17,703 because the 6th respondent had not filed its GSTR-01 returns, causing the tax paid by the petitioner to not reflect in its GSTR-2A. Despite legal notices to the 6th respondent and representations to the official respondents (State of Jharkhand and its GST authorities), no action was taken. A previous writ petition filed by the petitioner was disposed of with a direction to approach the official respondents with a fresh representation, which also yielded no results, leading to the filing of the present writ petition.

Key Issues

1. Whether the official respondents (State of Jharkhand and its GST authorities) are obligated to initiate proceedings under Section 76 of the Jharkhand GST Act, 2017, against the 6th respondent for collecting GST from the petitioner and failing to deposit it with the government, despite the 6th respondent being registered with the Central GST authorities? Petitioner's arguments: The petitioner contended that Section 76(1) of the Jharkhand GST Act, 2017, mandates that any person collecting GST and not paying it to the government must forthwith pay it. They argued that the official respondents have a duty to act under Section 76(2) against the 6th respondent for failing to file GSTR-01 and remit the collected tax, irrespective of the 6th respondent's registration with CGST authorities. They also argued that the principle of res judicata does not apply to the previous writ petition as it was not decided on merits. Revenue/State's arguments: The official respondents argued that the 6th respondent falls under the jurisdiction of the Central GST authorities, and therefore, they cannot initiate action against the 6th respondent. They also contended that the petitioner lacked locus standi to file the writ petition.