Golden Cargo Movers vs. State Of Chhattisgarh

Facts

The petitioner, Golden Cargo Movers, filed a writ petition challenging an order dated April 24, 2024, passed by the Assistant Commissioner, State Tax Circle 5, Raipur (Respondent No. 2). This order raised a demand of Rs. 5,00,11,112/- against the petitioner for the period April 1, 2018, to March 31, 2019. Previously, a show-cause notice dated December 19, 2023, under Section 73 of the GST Act, had proposed a tax and interest demand of Rs. 1,32,92,796/-. The petitioner argued that the final demand order exceeded the amount stated in the show-cause notice, violating Section 75(7) of the Act. Consequential orders attaching the petitioner's bank accounts and immovable property were also challenged.

Held

The Court held that the final assessment order dated April 24, 2024, demanding Rs. 5,00,11,112/- was in clear violation of Section 75(7) of the Goods and Services Tax Act, 2017. This provision explicitly states that the amount of tax, interest, and penalty demanded in the order shall not exceed the amount specified in the notice, and no demand can be confirmed on grounds other than those specified in the notice. The Court noted that the show-cause notice had proposed a demand of Rs. 1,32,92,796/-, while the final order imposed a significantly higher demand. Consequently, the impugned assessment order and the consequential attachment orders for bank accounts and immovable property were set aside and quashed. The Court allowed the petition, granting liberty to the respondents to proceed afresh in accordance with the law after providing the petitioner with due opportunity of hearing.

Key Issues

1. Whether the final assessment order demanding Rs. 5,00,11,112/- is in excess of the amount specified in the show-cause notice dated December 19, 2023, thereby violating Section 75(7) of the Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that the final demand raised in the order dated April 24, 2024, was significantly higher than the amount mentioned in the show-cause notice (DRC-01), which is impermissible under Section 75(7) of the Act. They sought to set aside the impugned assessment order and the subsequent attachment orders. Revenue's Contention: The State/Respondents argued that the petitioner initially filed their Annual GST Return under Heading 9965 (Goods transport services) claiming exemption. However, scrutiny revealed that the services provided fell under Heading 9967 (Supporting services in transport), which attracted GST at 18%. As the petitioner failed to substantiate their exemption claim, the final assessment order reflected the leviable GST, and the attachment orders were issued due to non-compliance with the final order.