Case Law Details
Ingram Micro India Pvt Ltd Vs State Tax Officer (Madras High Court)
Introduction: In a significant legal development, Ingram Micro India Pvt Ltd has challenged a GST assessment order for the financial year 2017-2018. The company, a registered entity under GST laws, contested the order dated 21.12.2023, alleging lack of proper evaluation and consideration by the assessing authority.
Detailed Analysis: The petitioner, asserting its status as a registered person under GST laws, claimed Input Tax Credit (ITC) under Section 16 of the CGST Act. The dispute arose from a show cause notice regarding non-payment to suppliers for a period exceeding 180 days. Despite the petitioner’s comprehensive response, supported by documents, including a Chartered Accountant’s certificate, the impugned order was issued based on the total trade payables of the company.
The assessing authority’s contention was that the petitioner failed to provide a proper breakdown of net trade payables specific to the State of Tamil Nadu. The order, quoting a total trade payable of Rs.2704.1 Crores, rejected the petitioner’s claim without considering the Chartered Accountant’s certificate attributing trade payables of Rs.1816.48 million to Tamil Nadu.
The High Court, in its analysis, found that the assessing authority did not apply due diligence and concluded that the entire trade payables across India should be considered due to the absence of Tamil Nadu financial statements. However, under the Companies Act, 2013, companies are not mandated to file state-specific financial statements. The Court observed the inadequacy of the assessing authority’s consideration and quashed the order.
Conclusion: In a favorable decision for Ingram Micro India Pvt Ltd, the High Court quashed the GST assessment order for the fiscal year 2017-2018. The Court directed a reconsideration by the assessing authority, instructing a thorough examination of all relevant documents provided by the petitioner. The ruling emphasizes the importance of proper evaluation and consideration in tax assessments. This development sets a precedent for cases where assessing authorities overlook crucial documents and highlights the need for a fair and reasoned approach in tax disputes.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner challenges an order dated 21.12.2023 in respect of the assessment year 2017-2018.
2. The petitioner stated that it is a registered person under GST laws and that it had claimed Input Tax Credit (ITC) under Section 16 of the CGST Act. In respect thereof, it is stated that a show cause notice was issued with regard to non-payment to the suppliers for a period exceeding 180 days. In spite of the petitioner replying thereto and providing all supporting documents, including the Chartered Accountant’s certificate dated 20.12.2023, learned counsel for the petitioner submits that the impugned order came to be issued on the basis of the total trade payables of the petitioner.
3. Mrs. K. Vasanthamala, learned Government Advocate, accepts notice on behalf of the respondent. She submits that the total trade payables of the company were taken into consideration because the petitioner did not provide a proper break up of net trade payable relating to the State of Tamil Nadu.
4. In the impugned order, it is recorded as under with regard to the alleged trade payables of Rs.2704.1 Crores:
“Findings of the Assessing Authority:
The tax payer has stated that the creditors noticed from PAN India basis. They have not produced Tamil Nadu financial statement. They have simply stated in their contention there is no such payment pending to their supplier. In the absence of such records, contention put-forth by them is not acceptable. The proposal is hereby confirmed.”
From the above extract, it follows that the assessing officer concluded that the entire trade payables of the company across India should be taken as the trade payables because the petitioner did not provide Tamil Nadu financial statements.
5. Under the Companies Act, 2013, every company is required to file financial statements in respect of its entire operations and there is no provision for filing State-specific financial statements. However, the petitioner has submitted a certificate from a Chartered Accountant stating that the trade payables attributable to the State of Tamil Nadu are 1816.48 millions. Learned counsel for the petitioner also submits that the petitioner would provide all the invoices issued by the suppliers with regard to the aggregate sum of Rs.1816.48 millions.
6. The assessing authority has clearly not applied its mind before drawing the conclusions extracted above. Therefore, the impugned order is liable to be and is hereby quashed. Consequently, the matter is remanded for reconsideration by the assessing authority. The assessing authority is directed to take into consideration all relevant documents produced by the petitioner, provide a reasonable opportunity to the petitioner and issue a fresh order within a period of two months from the date of receipt of a copy of this order. The writ petition is allowed on the above terms. There will be no order as to costs. Consequently, connected Miscellaneous Petitions are closed.
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