Vinman Constructions Limited Vs State of Jharkhand (Jharkhand High Court)
Jharkhand High Court has set aside an assessment order and the subsequent appellate order concerning M/s Vinman Constructions Limited, highlighting significant procedural lapses by the tax authorities, including the apparent failure to issue a mandatory notice before conducting a best judgment assessment.
The case revolved around the Goods and Services Tax liability of Vinman Constructions for the period spanning December 2017 to March 2018. According to the company, which registered under the GST Act in December 2017, no construction work was undertaken during this specific period. However, the company had secured a project loan from Dewan Housing Finance Corporation Limited (DHFL) in December 2017 for business purposes. DHFL levied a loan processing fee of Rs. 16.00 crores, charging GST at 18%, amounting to Rs. 2.88 crores. Vinman Constructions claimed to have paid this input tax and furnished details of this inward supply of services.
Despite having paid the GST on the loan processing fee and having no outward supplies or sales during the period due to the absence of work, the company failed to file its GSTR-3B returns within the prescribed time, attributing this to ignorance of the law.
The company stated it was surprised to receive a Summary of Order in Form DRC-07 on October 1, 2018, uploaded on its online portal. This summary indicated that an assessment order dated September 28, 2018, had been passed under Section 62 of the Jharkhand Goods and Services Tax Act, 2017 (JGST Act) for the period of July 2017 to March 2018. The order raised a total demand of Rs. 3,30,76,800/-, denying the Input Tax Credit (ITC) of Rs. 2.88 crores claimed by the petitioner and levying an equal amount as tax, along with interest and penalty.
