Tvl. P. Baskar Vs Deputy State Tax Officer (Intelligence) (Madras High Court)
Summary: The Madras High Court addressed a writ petition filed by Tvl. P. Baskar challenging an order that disregarded his claim for GST exemption on income earned from hiring vehicles to a Goods Transport Agency (GTA). The petitioner argued that this income is exempt under Notification No. 12/2017-Central Tax (Rate). He supported his contention by referencing rulings from the Appellate Authority for Advance Ruling (AAAR) Maharashtra and the Authority for Advance Ruling (AAR) Karnataka, both of which had previously held that renting transport vehicles to a GTA is a distinct, exempt service under the said notification and not part of the GTA’s taxable services. The petitioner’s explanation highlighted that he provided vehicles to M/s. Zinc Foods (P) Ltd., a GTA, for the transportation of goods, a service explicitly NIL rated under the relevant notification. The court noted that while the petitioner had filed a detailed reply to the show-cause notice, explaining the nature of the transaction and citing the aforementioned rulings, the impugned order failed to address these objections. Instead, it merely reiterated the initial proposal to levy tax, stating that the petitioner had not submitted relevant documents without specifying what was lacking or why the provided explanations were insufficient. The High Court found this lack of reasoned consideration to be a violation of natural justice and indicative of a non-application of mind by the assessing authority. Consequently, the court set aside the impugned order and directed the respondent to reconsider the matter after the petitioner submits any further objections within two weeks. The authority is mandated to pass a fresh order in accordance with the law, providing the petitioner with a reasonable opportunity for a hearing.
