M/S Satyanarayana Sri Gopal Malani vs. Union Of INDIA
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The petitioner, M/s Satyanarayana Sri Gopal Malani, filed a writ petition challenging an order dated 16.03.2023 passed by the Assistant Commissioner (Respondent No. 2) confirming a GST demand of Rs. 1,09,88,840.00. This demand was raised under Section 73(9) read with Section 122(2)(a) of the CGST Act for short payment of GST under the Reverse Charge Mechanism (RCM) on raw cotton purchases from agriculturists during the period 2017-18 to 2019-20. The petitioner contended that they had already paid the GST and that their reply to the show cause notice was not considered by the authorities. They sought an adjustment of the already paid GST against the RCM demand.
Held
The High Court held that while the petitioner raised concerns about the consideration of their reply and the alleged payment of GST, the impugned order was not an absolute denial of natural justice. The court viewed the issue of inadequate consideration as a valid ground for appeal before the appellate authority. Consequently, the court granted liberty to the petitioner to approach the Joint Commissioner (Appeals) under Rule 109A of the Central Goods and Services Tax Rules, 2017, to challenge the order dated 16.03.2023. The court directed that if the appeal is filed within 30 days from the date of the order, it shall be considered in accordance with law after giving the petitioner an opportunity of hearing. The court explicitly stated that it was not expressing any opinion on the merits of the case. The writ petition was dismissed subject to these directions.
Key Issues
1. Whether the Assistant Commissioner was justified in confirming the GST demand of Rs. 1,09,88,840.00 under Section 73(9) read with Section 122(2)(a) of the CGST Act, 2017, for short payment of GST under RCM on raw cotton purchases from agriculturists for the period 2017-18 to 2019-20, despite the petitioner claiming to have already paid the GST and their reply not being considered? Petitioner's arguments: The petitioner argued that the demand was unjustified as they had already paid the GST. They further contended that their entire output tax liability for outward sales was paid in cash without any adjustment from the RCM demand, meaning there was no loss of revenue to the government. They also asserted that their reply to the show cause notice was not considered by the third respondent (Deputy Commissioner). Respondents' arguments: The judgment does not explicitly record arguments made by the respondents. However, the court's observation implies that the respondents proceeded with the demand and penalty.
Sections Cited
Section 73(9), Section 122(2)(a), Rule 109A
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: ORDER
IION'BLI,] TT{T] CTIIET- JTJS'I'ICE (]JJAI, BHLIYAN ANI) HON'BLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No.15909 of 2023 ORDFIR : (Per Hon'bLe tLrc Chief Justir:e U11at Bhuyanl Lleard Mr. C.Satish Babu, learned counsel for the pctitioner; Mr. C. Praveen Kumar, leamed Deputy Solicitor General of lndia iirr rcsponclent No.l: and lVls. B. Sapna Reddr,, learned counsel lbr rcspondcnt Nos.2 and 3 I By filing this petition under Article 226 of the Consriturion of India, petitionel has assailed thc legality and validity ol' the order in original dated 16.03.2023 passed by the 2"d responden[ cor.rtinning the tax demand of Rs.1,09,88,840.00 under Secrion /3(9) of the Central Goods and Scrvices Tax Act, 2017 (briefly "the C(iS I' Act" hereinafter) read w'ith Section 122(2)(a) of the said Act fbr short payment of Goods and Services Tax (GS'I) under reverse charge mechanism on raw cotton pul'chases made from the agriculturists during the period fiom 2017-18 to 2019-20 besides ):vy oi'intcrest and imposition of penalty. (r t
2 cJ & ITR' .l tt'. P. \o.l 5909 of 202-1 3. [-earue d coullse I lbr the petitiollcl sublnits that lespondent I No.3 was no. iustillcd in eorrirrnling the above demand inastnttch as petitioner rad alrc-ad}' pard the GS f
Pctitiotrer had paicl thc cntire otrtput tax liability for outward sales in cash without an)' ad.iustment from any reverse charge demand. Hcnce, therc was no loss of revenue to the Government' Reply by th: petiLioner llled to thc show cause notice was not considered bl the 3"' respondent.
Horvci,er, \\ic are ol'the vicw that against the order in original, an appeal [igs to the Joint Commissioner (Appeals)' Central Taxt:s, unde r RLrlc I ()9A of the Central Goods and Services Tax Rules, 2017. 6. On gc,ing through the impugned order in oliginal, we are of the view that it is nor a casr. of absolute denial of natural justice. If it is a casc of inadequate consideration, then the same can be a good grounC of appeal belore the appellate authority' Without expressing any opinion on uerit and keeping all contentions open' we grant lib:rty to the petitior.rer to approach the appellate authority
to assail the regarity and 'aridiry or. the order in originar datcd 16.03.2023. If the appeal is filed within a period of 30 days from today, the same shall be considered by the appellate authority in accordance with lar.r, alter giving due opportunity of hearing to the TIC'J & \.fR, J ll'.P. t\n_ ti909 oJ 2023 disrnissed petltioner No cosLs
SubJect ro rhe above, thc writ petition IS To, 1. 2.
CHR GJP
Pending miscellaneous applications, if any, shall stancl c loscd. ,r, ASS,'iRi-IREEHHiH //// Gf, SECTION=OFFICER One CC to SRl. G. SATISH BABU Advocate IOpUCI One CC to Sri Gadi Praveenl(umar,,Deputy So_lrgitoi General of lndia [OpUC] One CC to t\i'ls. B. SAPNA REDDY, Advocaie IOPUCI Two CD Copies $-_
HIGH COURT DATED:2310612023 ORDER W.P.No.15909 of 2023 o O * lHE S 14 14: 1 e JtlL 2029 z,) .\! : dt - \':r- -t DISMISSING THE WRIT PETITION WITHOUT COSTS /: o5 *t
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.