Tvl A Saravanan vs. The Deputy State Tax Officer-1

Facts

The petitioner, Tvl. A. Saravanan, filed three writ petitions challenging assessment orders passed by the Deputy State Tax Officer-1, Tuticorin for the periods 2018-19, 2019-20, and 2020-21. The petitioner argued that the assessments were made contrary to GST enactments, resulting in an imposition of 18% GST instead of 5% on certain items, including transportation charges. The total tax liability disputed amounted to Rs. 32,57,972/-. The petitioner contended that they have their own transport, thus no third-party service was availed, making the demand for tax on transportation charges invalid. The petitioner sought an opportunity to defend their case after setting aside the impugned orders. The respondent revenue argued that the writ petitions were time-barred due to laches and that the appellate remedy was also time-barred.

Held

The Court, while acknowledging the respondent's contention regarding the time-barred nature of the petitions, was inclined to provide relief to the petitioner. The Court decided to quash the impugned assessment orders and remit the cases back to the respondent for fresh consideration. The reasoning was to allow the petitioner an opportunity to present their case on merits. The Court directed the petitioner to deposit 30% of the disputed tax liability (Rs. 32,57,972/-) to the credit of the respondent from their Electronic Cash Register within 30 days of receiving the order. The quashed orders were to be treated as addendums to the original show cause notices. The petitioner was to file a reply to the show cause notices within 30 days of receiving the order and making the deposit. The respondent was then to pass fresh orders expeditiously, preferably within two months, after hearing the petitioner. The issue of whether the assessment was contrary to GST enactments and the validity of the demand on transportation charges was not definitively decided but was to be re-examined.

Key Issues

1. Whether the assessment orders passed by the respondent are liable to be quashed for being contrary to the provisions of the respective GST enactments, specifically concerning the imposition of 18% GST on certain items including transportation charges, and whether the petitioner should be granted an opportunity to defend their case? (Mixed question of law and fact, concerning the interpretation and application of GST provisions and principles of natural justice). Petitioner's arguments: The petitioner argued that the assessment was made contrary to GST enactments, leading to an incorrect tax rate (18% instead of 5%) and an unjustified demand, particularly on transportation charges for which the petitioner used its own transport. They sought an opportunity to present their defense. Respondent's arguments: The respondent contended that the writ petitions were hopelessly time-barred due to laches, citing the Supreme Court decision in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited. They also argued that the appellate remedy under Section 107 of the GST Enactments was time-barred, referencing Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others.