Arun Aloysius Barnes vs. Assistant Commissioner Of Commercial Taxes

Held

The Court allowed the petition in part. It held that the petitioner had made out grounds for restoration of proceedings. The reasoning was based on two primary factors: the petitioner's bonafide assertion that his consultant, whose email was registered on the GST portal, failed to inform him of the notices and the impugned order, and the petitioner's contention, supported by FIRCs and other documents, that the turnover brought to tax was from zero-rated supplies, which would preclude a demand. The Court reasoned that if the petitioner could indeed prove that the taxed turnover was from zero-rated supplies, then no demand should arise. Consequently, the Adjudication Order dated 30.04.2024, its summary, and the recovery notice were quashed. The proceedings were restored to the stage of the Show Cause Notice dated 27.11.2023, with an opportunity for the petitioner to file a further response. The Authority was directed to examine all circumstances and pass a detailed order. The petitioner was directed to file his response on 12.11.2026.

Facts

The petitioner, Arun Aloysius Barnes, an individual providing consultancy services, filed a writ petition challenging an order passed by the Assistant Commissioner of Commercial Taxes under Section 73 of the CGST Act, 2017, and the corresponding KGST Act, 2017. The impugned order, dated 04.05.2024, demanded Rs. 28,03,642/- comprising tax, interest, and penalty for the tax period 2018-19. A consequential notice for attachment/recovery from the petitioner's bank account, dated 29.05.2025, was also challenged. The petitioner contended that his consultant, whose email ID was registered on the GST portal, failed to inform him about the notices and the impugned order. The petitioner also claimed that his turnover from zero-rated supplies was wrongly brought to tax.

Key Issues

1. Whether the petitioner has made out grounds for restoration of proceedings with an opportunity to respond to the Show Cause Notice dated 27.11.2023, considering the alleged non-communication by his consultant and the claim that the turnover brought to tax was from zero-rated supplies? (Mixed question of law and fact, turning on Section 73 of the CGST Act, 2017 and principles of natural justice). Petitioner's arguments: The petitioner argued that his consultant, registered on the GST portal, failed to inform him about the notices and the impugned order, leading to a lack of opportunity to respond. He further contended that his turnover from zero-rated supplies was wrongly taxed, and he relied on Foreign Inward Remittances Certificates (FIRCs) and other documents to support this claim. The petitioner asserted that the amount demanded has been fully recovered. Revenue's arguments: The judgment does not record any specific arguments made by the respondent revenue authority.