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In an very interesting case, the Andhra Pradesh High Court, (Vasavi Wedding and Event Planners Vs State of Andhra Pradesh/Case No: W.P. No. 10250 of 2022, Dated: 14/07/2022) while considering a petition challenging GST demand based on events posted on social media, held that information available on the social media platform (Facebook)  shows that the event was conducted recognising supply of service.

The petitioner is engaged in the business of Event Management Service supplies. It is said that the Effective Date of Registration (EDR) of the Petitioner is from 01.07.2017 and the registration was cancelled from 01.08.2020 on the application made by the Petitioner. The petitioner had filed GSTR 3B returns from July 2017 to January 2020, disclosing the taxable turnover and taxes paid.

Due to personal reasons, the petitioner could not conduct event management except for small events up to January 2020 for livelihood. Due to COVID-19  from March 2020 up to August 2021, no permission was granted to conduct functions having huge gatherings except for limited members. As such, no business was done. Therefore, the petitioner applied for a cancellation of the GST registration.

Blowing your Trumpet on Social media could cost GST liability

However, in response to an investigation by the Department, the petitioner gave a statement and furnished details of turnovers disclosed in GSTR 3B returns from July 2017 to March 2020. The department on conclusion of investigation,  issued a Show Cause Notice proposing to levy IGST of Rs 18,00,000, CGST of Rs 26,55,000 and SGST of Rs 26,55,000 for conducting major events by the petitioner, based on the posts made in social media including Facebook.

The petitioner appeared before the investigation officers of the department and obtained copies of the Facebook documents available with the department and explained that they have not conducted any events in respect of documents available on Facebook. They contended that the details and documents were uploaded only for advertisement purposes. The petitioner requested the department to make available the information, if any, conducted by them with other documentary evidences. The department did not provide any information except the Facebook documents.

The petitioner submitted that the order passed by the Department without providing an opportunity of hearing is in violation of principles of natural justice. The assessment order passed was purely based on Facebook details and social media postings. In other words, without any event being conducted by the petitioner, the authorities have burdened him with liability.

The department contended that many factual aspects are involved in this which have been shared and information has been gathered from the personal window of the petitioner, which clearly indicates that the petitioner has conducted many events without disclosing the same with the department for the purpose of negating Tax compliance.

The court held that, prima facie, it cannot be said that the petitioner has not conducted any event during the relevant period and is not free from doubt. Also, it is not an issue covered under Article 226 of the constitution which empowers the Hon’ble High Courts to exercise power through issuance of writs – habeas corpus, mandamus, quo warranto, prohibition and certiorari or any appropriate writ and advised to petitioners to *approach the Appellate Authority for redressal.

Well…!!!

Beware and responsible….What is put in the Social Media is irreversible …… and additionally now would invite Tax litigation also !!!!

Jai Hind!

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The Author is the recipient of the prestigious "Presidential Award-2019" for meritorious and specially distinguished record of Service from the Government of India. View Full Profile

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