GST
TRT-2025-
Orissa High Court
Date:-18-11-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 18 November 2022
Facts –
- The Petitioner, SRI MUNA PANI, a work contractor, was issued a Show Cause Notices on 06.08.2022 for determination of tax liability pertaining to the periods 2017-18 under Section 73 of the GST Act on the basis of discrepancy observed between the figures furnished by the petitioner in the returns furnished in Form GSTR-3B under Rule 61 of the GST Rules and the data made available in the web portal.
- The petitioner, indulged in execution of works contract, beseeches relief(s) against the Notices dated 06.08.2022 for initiation of proceeding under Section 73 of the Central Goods and Services Tax Act, 2017 and the Odisha Goods and Services Tax Act, pertaining to the periods 2017-18 and 2018-19
Issue –
- Whether the petitioner is eligible to get reimbursement of tax effect on introduction of the GST Act with effect from 01.07.2017 from the Executive Engineers has disposed of W.P.(C) No.3452 of 2021 and other cases filed by the petitioner vide order dated 01.02.2021 read with modified order dated 12.11.2021?
Order –
- The Hon’ble High Court states that the petitioner, in writ petition, which is filed on 17.08.2022, without referring to Revised Guidelines dated 10.12.2018, has sought to rely on erstwhile Guidelines dated 07.12.2017 which appears to be an attempt to misguide the Court.
- On perusal of the Revised Guideline dated 10.12.2081 by the court it finds that the same will facilitate determination of tax exclusive basic value of that goods or service by removing the embedded tax incidences. The applicable GST rate is to be added on the revised estimated work value to arrive at the GST-inclusive work value for the balance work. The Revised Guidelines dated 10.12.2018 has rationality in application of rate of tax under the GST Act on the balance work.
- The statutory provision and the legal position as set forth by this Court lead to show that the petitioner-contractor is supplier of service which is subject to levy of GST and for that matter ascertainment of liability and correct quantification of tax liability is subject-matter of adjudication by the authorities bestowed with power under the provisions of the GST Act.
- In the instant case the proper officer has invoked provisions of Section 73 for determination of tax liability of the petitioner and issued the subject Show Cause Notices. Therefore, it cannot be said that such notices are invalid or vague.
- In the context where assessment order being challenged, the High Court quashed the same invoking writ jurisdiction, the Hon’ble Supreme Court in the matter of Commissioner of Income Tax Vrs. Chhabil Dass Agarwal, (2014) 1 SCC 603 = 2013 SCC OnLine SC 717 = (2013) 357 ITR 357 (SC) reiterated the scope and purport of exercise of power under Article 226 of the Constitution of India and re-stated the self-imposed restrictions qua entertainment of writ petition.
- The petitioner may also raise legal issues as well as factual disputes before the Assessing Officer during the course of proceeding. It is possible for the petitioner to seek further time, if according to him the time given by the authority for filing the reply was required to be extended in order to enable it to collect further material. It cannot, therefore, be said that the notices dated 06.08.2022 under Section 73 are vulnerable.
- The Court holds that entertainment of the writ petition at the stage of notice would be premature. Doing so would frustrate the tax administration and interdict adjudication process. The GST Act and rules framed thereunder, provides sufficient safeguard for the petitioner, more so, when against the final orders of adjudication, appeal lies.
- Thus, the proper officer concerned is at liberty to verify the veracity of the claim(s) made in the returns furnished by the petitioner and take appropriate steps in accordance with law after affording reasonable opportunity of hearing to the petitioner.
- For the aforesaid reasons, the Court held that it does not warrant it necessary to invoke extraordinary jurisdiction in exercise of power under Article 226 of the Constitution at the stage of Show Cause Notice.
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