Dharmendra Singh Vs Deputy Commissioner of Revenue (Calcutta High Court)
The Calcutta High Court has set aside a tax demand and a subsequent appellate order, remanding the matter back to the proper officer for a fresh adjudication. The court’s decision came in a writ petition filed by Dharmendra Singh, who challenged the tax department’s handling of a GST show cause notice and a voluntary payment made by him. The court ruled that the department erred by treating a voluntary payment made under one section of the GST Act as a response to a show cause notice issued under a different, more stringent section.
The petitioner, a registered taxpayer, had availed and utilized Input Tax Credit (ITC) from transactions with another firm. When the other firm’s registration was later cancelled, the tax authorities initiated a proceeding against the petitioner under Section 74 of the GST Act, alleging fraudulent transactions. A show cause notice was issued on March 21, 2022, following an initial intimation of discrepancies on January 5, 2022.
However, even before the formal proceedings could conclude, the petitioner voluntarily made a partial payment of the disputed amount, specifically noting that the payment was being made under Section 73(5) of the Act. This section pertains to voluntary payments made in cases where there is no intent to defraud. The petitioner made these payments on March 24, 2022, and May 27, 2022.
