Rethinasamy Gandhi Vs Thedeputy State Tax Officer- I (Madras High Court)
Madras High Court has set aside an order imposing GST liability on Rethinasamy Gandhi for transportation services rendered to TASMAC (Tamil Nadu State Marketing Corporation), remitting the matter back to the tax authorities for fresh consideration. The court noted that the original order failed to account for the Reverse Charge Mechanism (RCM) provisions under GST law.
The petitioner, Rethinasamy Gandhi, had approached the High Court challenging an impugned order dated December 30, 2023, which imposed tax liability for the period 2017-18. This order followed a notice in DRC-01A (September 11, 2023), a Show Cause Notice (SCN) in DRC-01 (September 25, 2023), and a subsequent reminder. While the petitioner submitted a reply, the court observed it was “superficial” and lacked clear explanation.
The core of the petitioner’s argument was that his services, primarily the transportation of bottles for TASMAC, fell under the Reverse Charge Mechanism. He contended that under Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017 (and an identical State notification), the GST liability lay with the recipient of the service, i.e., TASMAC, and not with him as the service provider.
The High Court, after reviewing the arguments, found a prima facie indication that the tax should indeed have been paid on a Reverse Charge Basis by the recipient, as per Sl. No. 11 of the said Notification. Crucially, the court highlighted that this significant aspect had “not been considered in the impugned order.”
