Case Law Details
Sarkar Diesel & Anr. Vs. The Deputy Commissioner State Tax (Calcutta High Court)
The case involves appeals by Sarkar Diesel & Anr. against orders by the learned Single Judge in three writ petitions, where interim relief was denied. The appeals and writ petitions were heard together by the Calcutta High Court.
Key Issue: The primary issue is whether the Joint Commissioner of State Tax, Berhampore Circle, addressed all issues raised by the appellants in their appeal.
Arguments and Findings: The Appellate Authority previously overturned the Deputy Commissioner of State Tax’s order, ruling that the penalty should have been imposed under Section 73, not Section 74, of the West Bengal Goods and Services Tax (GST) Act, 2017. This was because there were no allegations of fraud or willful misstatement. However, the Appellate Authority did not consider other substantial grounds raised by the appellants.
After the appeal, the appellants received a declaration from Indian Oil Corporation Limited (IOCL) stating that they had availed Goods Transport Agency (GTA) services from the appellants during 2017-2020 and had discharged the GST liability under the Reverse Charge Mechanism (RCM). This new evidence was not available during the initial proceedings and could significantly impact the case outcome.
The court noted that the Assessing Officer initially relied on an Advance Ruling from Goa, which stated that the issuance of pollution control certificates should be taxed at 18%. However, the court clarified that an Advance Ruling is only binding on the applicant and the jurisdiction that issued it, not on third-party taxpayers or other jurisdictions. Therefore, the ruling from Goa should not influence the re-adjudication of the case in West Bengal.
Court’s Decision: The court set aside the orders of both the Appellate Authority and the Original Assessing Officer, remanding the matter back to the Assessing Officer for fresh consideration, taking into account the new evidence provided by IOCL. The appellants were instructed to submit a fresh representation with all relevant documents within four weeks. The Assessing Officer was directed to afford a personal hearing to the appellants and re-adjudicate the matter without being influenced by previous findings or the Goa Advance Ruling.
The court emphasized that the Assessing Officer must exercise power under Section 73, not Section 74, as corrected by the Appellate Authority. This ruling underscores that Advance Rulings are jurisdiction-specific and only binding on the applicants who seek them. They cannot automatically apply to taxpayers in other states or cases.
Conclusion: The Calcutta High Court’s ruling ensures a fair reassessment, emphasizing the importance of considering new evidence and jurisdictional boundaries of Advance Rulings. The case was remanded for re-adjudication, with clear directives to consider the new declaration from IOCL and to follow proper legal provisions under the GST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. All these three appeals have been filed by the appellant challenging three orders passed in three writ petitions where the learned Single Judge declined to grant any interim order. With the consent of the learned Advocate for either side, the writ petition as well as the appeals are taken up for hearing by this common judgment and order.
2. Heard learned counsel for the respective parties elaborately.
3. The short issue which falls for consideration is whether the appellant authority namely Joint Commissioner of State Tax, Berhampore Circle had considered all the issues which have been raised by the appellant in their appeal petition. On a perusal of the order passed by the appellate authority dated 29.05.2023, we find that the only exercise done by the appellate authority is to interfere with the order passed by the Deputy Commissioner of State Tax, Krishnanagar on the ground that penalty could not have been imposed under Section 74 of the West Bengal Goods and Services Tax, 2017 (for short, the said Act) and the penalty should have been imposed under Section 73 of the Act. Since there was no allegation of any fraud, willful mis-statement or suppression. However, the Appellate Authority has not adverted to any of the other grounds which have been canvassed by the appellant/Registered Tax Payer. The appellant after disposal of the appeal, has been furnished with a declaration by the Indian Oil Corporation Limited that they have availed GTA services from the appellant for varying periods i.e. from the year 2017-18, 2018-19 and 2019-20 and this declaration was furnished to the appellant/writ petitioner only on 4.8.2023. Therefore, the appellant could not have produced these documents before the authorities or even the appellate authority. Considering the fact that this declaration has been issued by the Indian Oil Corporation Ltd., the appellant would be entitled to take advantage of the same for as the declaration clearly mentions that the GST liability on Reverse Charge Mechanism (RCM) has been discharged by the Indian Oil Corporation Limited on the services availed from the appellant/writ petitioner. Therefore, we are of the view that the matter should go back to the original authority for re-adjudication of the matter considering the subsequent developments.
4. It is pointed out that by the learned Advocate for the appellant/writ petitioner that while issuing show-cause notice, the Assessing Officer had relied upon a decision of the Advance Ruling Authority, Goa wherein it appears that the Advance Ruling Authority at Goa held that the activity of issuance of pollution under the control certificate for the vehicle issued by the applicant therein is not covered under SAC 9991 and is covered under residue entry and hence should be taxed at 18%. Firstly, the Advance Ruling rendered in Goa cannot be made automatically applicable to the appellant/ Assessee who is registered tax payer in the State of West Bengal. Secondly, the Advance Ruling may bind the Department at Goa but cannot bind a third party tax payer, and bind only the applicant who went before the Advance Ruling Authority for a decision. Therefore, the Original Authority while re-adjudicating the matter should not place any reliance on the Advance Ruling rendered by the Authority at Goa.
5. In the result, the appeal and the writ petition are allowed and the order passed by the Appellate Authority and the Original Authority/Assessing Officer are set aside and the matter stands remanded to the Assessing Officer.
6. The Appellant is directed to submit a fresh reply/representation enclosing all documents in support of their claims and submit the same to the Assessing Officer within a period of four weeks from the date of receipt of the server copy of this order. On receipt of the same the Assessing Officer shall afford an opportunity of personal hearing to the authorized appellant/Assesse and re-adjudicate the matter uninfluenced by any finding rendered by it in its earlier order nor by placing any reliance on the decision of the Advance Ruling Authority at Goa and pass a reasoned order on merits and in accordance with law.
7. Needless to say that the authority should exercise power under Section 73 of the Act and not under Section 74 of the Act as the Appellate Authority has already correct the same.
8. Consequently, connected application, if any, also stands allowed and disposed of.
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