Tvl.Global Energies vs The Assistant Commissioner (St) (Iu)
2024 Latest Caselaw 14949 Mad

Madras High Court

Tvl.Global Energies vs The Assistant Commissioner (St) (Iu) on 2 August, 2024

Author: C.Saravanan

Bench: C.Saravanan

                                                                   W.P.(MD).Ns.18127 & 18552 of 2024




                          BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                              DATED : 02.08.2024

                                                    CORAM

                                  THE HONOURABLE MR.JUSTICE C.SARAVANAN

                                      W.P.(MD).Nos.18127 & 18552 of 2024
                                                     and
                                      W.M.P(MD)Nos.15469 & 15766 of 2024

                W.P(MD)No.18127 of 2024:

                Tvl.Global Energies,
                Represented by its Partner K.Mohamed Baruk.                     ... Petitioner

                                                     Vs.

                The Assistant Commissioner (ST) (IU),
                Tirunelveli District,
                Tirunelveli.                                                  ... Respondent

                Prayer : Writ Petition filed under Article 226 of the Constitution of India,
                praying this Court to issue a Writ of Certiorarified Mandamus, to call for the
                impugned assessment order on the file of respondent vide GSTIN.
                33AAOFG6058J1Z2/2020-21, dated 24.04.2024 and quash the same as illegal
                and devoid of merits and direct the respondent to re-do the assessment
                proceedings for the year 2020-21.




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https://www.mhc.tn.gov.in/judis
                                                                   W.P.(MD).Ns.18127 & 18552 of 2024




                W.P(MD)No.18552 of 2024:

                Tvl.Global Energies,
                Represented by its Partner K.Mohamed Baruk.                     ... Petitioner

                                                     Vs.

                The Assistant Commissioner (ST) (IU),
                Tirunelveli District,
                Tirunelveli.                                                  ... Respondent

                Prayer : Writ Petition filed under Article 226 of the Constitution of India,
                praying this Court to issue a Writ of Certiorarified Mandamus, to call for the
                impugned assessment order on the file of respondent vide GSTIN.
                33AAOFG6058J1Z2/2021-22, dated 24.04.2024 and quash the same as illegal
                and devoid of merits and direct the respondent to re-do the assessment
                proceedings for the year 2021-22.


                                  For Petitioner     : Mr.Raja Karthikeyan
                                                       (In both cases)

                                  For Respondent     : Mr.R.Suresh Kumar
                                                       Additional Government Pleader
                                                       (In both cases)




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https://www.mhc.tn.gov.in/judis
                                                                        W.P.(MD).Ns.18127 & 18552 of 2024




                                               COMMON ORDER

By this common order, both the writ petitions are being disposed of.

2.In these writ petitions, the petitioner has challenged the respective

assessment orders dated 24.04.2024 passed for the assessment year 2020-21

and 2021-22.

3. Challenge to the impugned orders is primarily based on the judgment

of this Court rendered in M/s.Rasathe Garments Vs. The State Tax Officer

(ST) (Inspn.). On merits, the learned counsel for the petitioner would submit

that the petitioner is an importer of coal and discharges IGST at the time of

import and availed input tax credit, apart from input tax credits on such

purchasers from local dealers. It is submitted that the petitioner has discharged

entire duty liability from and out of the ITC availed by the petitioner.

4. It is submitted that the respondent has relied on Form GSTR-2A,

wherein IGST paid by the petitioner at the time of import was not reflected and

https://www.mhc.tn.gov.in/judis W.P.(MD).Ns.18127 & 18552 of 2024

that the same has been later reflected on account of the information logged by

the Customs Department. That apart, it is submitted that at best, the department

can levy 1% tax where entire tax liability is proposed to be discharged out of

input tax credit in terms of Rule 86 (b) of the respective GST Rules, 2017. It is

submitted that the impugned order denies the same and that major junk of the

demand is contrary to Rule 86(b) of the respective GST Rules, 2017. That

apart, the petitioner has been found fault for not furnishing the document even

though petitioner’s records were inspected by the inspecting team, pursuant to

which notices were issued in DRC 01A, dated 10.01.2023 and DRC 01, dated

28.02.2023 for the respective assessment years.

5. On the other hand, the learned Additional Government Pleader for the

respondents submit that the decision of this Court rendered in M/s.Rasathe

Garments Vs. The State Tax Officer (ST) (Inspn.) will not apply to the facts of

this case. It is submitted that the issue has been clarified by Circular No.

13/2022–TNGST, dated 08.11.2022 bearing reference

No.PP2/GST-15/114/2022, wherein it has been clarified as under:

https://www.mhc.tn.gov.in/judis W.P.(MD).Ns.18127 & 18552 of 2024

4. If the taxpayer fails to pay the tax, interest and penalty as ascertained by the inspecting officer or made partial payment or files objection in Part B of FORM GST DRC-01A within the reasonable time of fifteen days from the date of service of notice in FORM GST DRC-01A, then the inspecting officer has to issue notice along with FORM GST DRC-01 covering all the issues without any omission.

Immediately on issue of FORM GST DRC-01 along with notice, the Inspecting officer has to obtain orders of the Joint Commissioner (Intelligence) concerned for transfer of file to other proper officers working under the control of the Joint Commissioner (Intelligence) based on the revenue effect involved in the show cause notice issued as mentioned below for adjudication:

i. Assistant Commissioner- Where revenue effect exceeds Rs.two crore.

ii. State Tax Officer- In all other cases, where revenue effect is upto Rs.two crore.

Where in any of the financial year, revenue involved in inspection exceeds Rs. two crore as per FORM GST DRC-01, it has to be reckoned for the purpose of transferring the file covering all the financial year for adjudication.

For example: The period of inspection covered the financial years 2017-18, 2018-19, 20l9-20 and 2020-21 and the revenue effect is as follows: (i) Financial year 2017-18 - Rs.1.50 Cr. (ii) Financial year 2018-19 - Rs.2.10 Cr. (i) Financialyear 2019-20 - Rs.1.80 Cr. (i) Financial year 2020-21 - Rs.1.40 Cr.

https://www.mhc.tn.gov.in/judis W.P.(MD).Ns.18127 & 18552 of 2024

6. It is submitted that the respondent is the competent officer to

adjudicate the show cause notice issued in DRC 01 and therefore, the impugned

order does not called for any interference.

7. I have carefully considered the arguments advanced by the learned

counsel for the petitioner and the learned Additional Government Pleader for

the respondent and also perused the impugned order.

8. The challenge to the impugned order on the ground that the respondent

lack jurisdiction based on the decision of M/s.Rasathe Garments Vs. The State

Tax Officer (ST) (Inspn.) is answered against the petitioner. In my view, the

respondent is competent to pass the order in terms of above circular. That apart,

the Act also does not discriminate between the officer from the Intelligence

Wing or the Inspection Wing or the Regular Adjudication Wing. All of them

are proper officers for the purpose of issuance of notice under Section 73 or 74

of the respective GST Act.

https://www.mhc.tn.gov.in/judis W.P.(MD).Ns.18127 & 18552 of 2024

9. At the same time, it is noticed that the petitioner has not given a clear

reply and has suffered an assessment order. It is not open for the petitioner to

state that all the information are available and therefore, the impugned order

passed by the respondent is liable to be interfered with for failure on the part of

the petitioner to get the necessary date / documents. Whenever a show cause

notice is issued, it lays a foundation for future orders to be passed and

therefore, it is incumbent on the part of an assesse to give a proper reply with

proper tabulation, explaining the position with the documents which the

petitioner has not done.

10. Under these circumstances, I can hardly blame the respondent for

passing the impugned order. At the same time, it is noticed that the bulk of the

demand has been made on account of discharge of tax liability on the input tax

credit which was declared in Form GSTR-3B. The discrepancy, if any, between

the input tax credit availed by the petitioner and the input that is reflected in

GSTR-2A, can be explained by the petitioner. At best, if the petitioner has

relevant documents to substantiate the same, the same should be filed. At best,

https://www.mhc.tn.gov.in/judis W.P.(MD).Ns.18127 & 18552 of 2024

the petitioner is liable to pay 1% of the tax in cash. This needs a proper

verification. As far as the other defects are concerned, the petitioner has not

given the proper documents to distant itself from the proposals in the form of

defects in the notice in DRC 01. The petitioner is therefore given one

opportunity to explain the same.

11. To balance the interest of the parties, this Court is inclined to set

aside the impugned order, dated 24.04.2024 and remit the case back to the

respondent to pass a fresh order on merits, subject to petitioner depositing 10%

of the balance amount on the amount other than the defect no.1 relating to

100% adjustment of tax liability from and out of the ITC. In so far as the 1st

defect is concerned, the petitioner shall deposit 1% of the tax liability in terms

of Section 86 (b) of the respective GST Rules, 2017. For the respective

assessment years, the amount shall be deposited by the petitioner within a

period of thirty (30) days from today. The petitioner shall file a detailed reply to

the respective notice in DRC within a period of 30 days from the date of receipt

of copy of this order. The impugned order passed by the respondent, dated

https://www.mhc.tn.gov.in/judis W.P.(MD).Ns.18127 & 18552 of 2024

24.04.2024 stands quashed. The impugned order which stands quashed shall be

treated as Addendum to the Show Cause Notices in DRC 01A dated

10.01.02023 and DRC-01 dated 28.02.2023. The respondent is directed to pass

fresh orders on merits within a period of three (3) months from the date of

receipt of reply to be filed by the petitioner.

12. In view of the above, both the writ petitions stand allowed. No costs.

Consequently, connected Miscellaneous Petitions are closed.

                                                                                       02.08.2024
                NCC               : Yes / No
                Index             : Yes / No
                Internet          : Yes
                gbg

                To

                The Assistant Commissioner (ST) (IU),
                Tirunelveli District,
                Tirunelveli.







https://www.mhc.tn.gov.in/judis
                                            W.P.(MD).Ns.18127 & 18552 of 2024




                                                   C.SARAVANAN, J.

                                                                        gbg




                                  W.P.(MD).Ns.18127 & 18552 of 2024




                                                               02.08.2024







https://www.mhc.tn.gov.in/judis