Patna HC Sets Aside GST Assessment which was Based on Taxable Turnover Estimate

Run Service Infocare Private Limited Vs Union of India (Patna High Court)

Patna High Court invalidated a GST assessment for the petitioner, Run Service Infocare Pvt. Ltd., citing the lack of statutory sanction for calculating tax liability based on 40% of total turnover. The petitioner argued that only turnover specific to Bihar should be assessed, as detailed in their annual returns, but the Assessing Officer included turnover from other states without proper justification. The petitioner’s failure to provide supporting documents like GSTR-9, GSTIN, and other records during the initial assessment and subsequent rectification process complicated the case. However, the Court found no legal basis for using 40% of the total turnover as a taxable figure for Bihar. Consequently, it set aside both the assessment order and the rectification order, directing the petitioner to present all required documentation to the Assessing Officer on December 20, 2024, for a fresh assessment. The case highlights the importance of statutory compliance and adequate documentation in GST assessments.

FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT

The petitioner is aggrieved with Annexure P-10 order rejecting his rectification application. Admittedly, an assessment was carried out against the petitioner for the Assessment Year 2019-20 as per Annexure P7 order.