Aboobucker Siddiq Vs Appellate Deputy Commissioner (GST) (Madras High Court)
₹62.38 Lakh UPI Receipts Not Automatically Taxable Turnover: GST Order Quashed and Matter Remanded | UPI Transaction Assessment Order Remanded Back: Judicial Protection for Second-Hand Goods Dealers under Rule 32(5) of the CGST Rules, 2017
Introduction
The Madurai Bench of the Madras High Court has once again emphasized the importance of fair tax administration and the correct application of GST laws in cases involving second-hand goods dealers. In a significant ruling, the Court set aside a GST assessment order that was based entirely on UPI transaction credits and remanded the matter back to the Assessing Authority for fresh consideration in light of Rule 32(5) of the CGST Rules, 2017.
The judgment serves as an important safeguard for small traders engaged in the business of buying and selling second-hand goods and reiterates that taxation must be based on the statutory valuation mechanism prescribed under GST law rather than merely on gross banking or UPI receipts.
Facts of the Case
The petitioner was engaged in the business of purchasing and reselling second-hand mobile phones. During the Financial Year 2021-2022, substantial amounts were credited into his bank account through UPI transactions, aggregating to approximately ₹62.38 lakhs. The GST Department treated the entire UPI receipts as taxable turnover and proceeded to determine tax liability on the gross amount.
