Case Law Details
Shri. J.Milton Jeba Manickam Vs The Assistant Commissioner of Central GST and Central Excise (Madras High Court)
In a recent judgment, the Madras High Court addressed a crucial issue regarding an alleged erroneous 100% penalty imposed under the CGST Act for a period falling under the VAT regime. The case of Shri. J. Milton Jeba Manickam Vs The Assistant Commissioner of Central GST and Central Excise sheds light on the complexities of tax assessments and statutory appeals.
The petitioner challenged an assessment order passed by the respondent, primarily disputing the demand confirmed for the assessment year 2017-2018 under the CGST Act. Additionally, the petitioner contested the imposition of a 100% penalty for the subsequent assessment years, arguing that it was unsustainable. The crux of the petitioner’s argument rested on the limitation prescribed under Section 73(10) of the CGST Act for the 2017-2018 assessment year.
The respondent countered, asserting that the demand confirmed for 2017-2018 pertained to the period under the TNVAT Act, 2006, and since the petitioner failed to produce records substantiating tax payment under the VAT regime, the demand was upheld. Moreover, the respondent highlighted alleged suppression of facts by the petitioner, justifying the penalty imposition.
The court carefully considered both parties’ arguments and concluded that the challenge to the assessment order did not warrant interference under Article 226 of the Constitution of India. Instead, the petitioner was directed to pursue a statutory appeal under Section 107 of the GST Act before the appellate authority. The court emphasized that the merits of the case, including whether the assessment fell under the VAT regime, should be addressed by the appellate Commissioner.
Consequently, the writ petition was dismissed, granting the petitioner the liberty to file a statutory appeal within 30 days. Despite the expired limitation for filing the appeal, the court condoned the delay, provided the petitioner pre-deposit the required amount under Section 107 of the CGST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner has challenged the impugned assessment order dated 17.01.2024 passed by the respondent for the assessment year 2017-2018 to 2019-2020. The impugned order is challenged primarily on the ground that the demand has been confirmed for the assessment year 2017-2018 contrary to the limitation prescribed under Section 73 (10) of CGST Act, 2017. As far as the assessment years 2018-2019 and 2019-20220 are concerned, the respondent has wrongly imposed 100% penalty under Section 74 r/w Section 122(2)(b) of CGST Act, 2017. It is submitted that the demand that has been confirmed for the assessment year 2017-2018 is un-sustainable. It is further submitted that the imposition of 100% penalty under the aforesaid provision is also un-sustainable.
2. The learned Standing Counsel for the respondent, on instructions, would submit that the petitioner had taken a categorical stand that the demand that has been confirmed for the assessment year 2017-2018 pertains to the period under TNVAT Act, 2006 as in force up to 30.06.2017 and since the petitioner failed to produce any records to substantiate that the petitioner has paid the tax under the VAT regime, earlier demand has been confirmed. It is submitted that either way there is suppression of fact by the petitioner and therefore, the impugned order does not call for any interference.
3. The learned Standing Counsel for the respondent would further submit that even otherwise, the petitioner has an alternate remedy, as there are several disputed questions of fact that arise for consideration, in view of the submissions made by the learned counsel for the petitioner.
4. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Standing Counsel for the respondent.
5. In my view, the challenge to the impugned assessment order does not call for any interference under Article 226 of the Constitution of India. If the petitioner is aggrieved, the petitioner can only file a statutory appeal under Section 107 of the GST Act before the appellate Authority. In case, it is the case of the petitioner that the assessment that has been confirmed for the assessment year 2017-2018 thus fell under the VAT regime, unless the assessment order was completed as is contemplated under the provisions of the TNVAT Act, 2006, the demand cannot be said to be time barred, in which case appropriate demand notice under Section 27 of the TNVAT Act, 2006 can be issued. These are aspects, which will have to be considered by the appellate Commissioner on merits and in accordance with law.
6. Therefore, the Writ Petition is liable to be dismissed. However, liberty is given to the petitioner to file a statutory appeal before the Appellate Authority within a period of 30 days from the date of receipt of a copy of this order.
7. As the limitation for filing the appeal has already expired on the date of filing of the present Writ Petition, the delay in filing the appeal is condoned. The petitioner shall pre-deposit the amount required under Section 107 of the CGST Act, 2017. On payment of the same within such time, the Appellate Commissioner shall entertain the appeal and dispose of the same on merits and in accordance with law, without reference to limitation under Section 107 of the CGST Act, 2017.
8. Accordingly, this Writ Petition stands dismissed with the above liberty No cots. Consequently, connected Miscellaneous Petitions are closed
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