Tvl. Glo Shipping Logistics Pvt. Ltd. Vs State Tax Officer (Madras High Court)
The Madras High Court recently heard the writ petition filed by Tvl. Glo Shipping Logistics Pvt. Ltd., challenging the GST assessment order issued by the State Tax Officer. The company, a non-vessel operating common carrier, was under scrutiny for various tax-related discrepancies in the 2019-2020 period. The key issues in the assessment included underreporting of output tax, overclaiming of input tax, and incorrect claims related to exempt supplies and non-business transactions.
A show-cause notice was issued in May 2024, outlining the tax liabilities of ₹21,77,761, comprising SGST, CGST, and IGST. The petitioner responded with detailed explanations, asserting its role as an ocean freight service provider. However, the final assessment order, dated 31st August 2024, contradicted this claim, categorizing the petitioner as an intermediary. This reclassification led to a significant increase in the total tax demand to ₹96,83,029, including additional penalties and interest.
The petitioner argued that it was not given an opportunity to respond to the reclassification as an intermediary, which was introduced only in the final order. This, according to the petitioner, violated the principle of natural justice, as well as Section 75(7) of the GST Act, which mandates that the final demand should not exceed the amounts specified in the initial show-cause notice. The court concurred with this argument, agreeing that the shift in the assessment’s basis was an infringement of procedural fairness.
