Aristo Telemedia Pvt Ltd Vs Assistant Commissioner (ST)
Date: April 3, 2024
Subject Matter
Assessed tax liability cannot exceed SCN amount
Summary
The case involves Aristo Telemedia Pvt Ltd challenging a GST assessment order issued by the Assistant Commissioner. The assessment order substantially exceeded the initial demand specified in the show cause notice, and the petitioner raised objections to the discrepancy in tax liability, imposition of tax on "other expenses" without proper computation, and the absence of a personal hearing. The court, after analyzing the grounds of challenge, set aside the impugned order and remanded the matter for reconsideration, directing the respondent to afford the petitioner a reasonable opportunity, including a personal hearing, and issue a fresh order within two months.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 30.12.2023 is the subject of challenge in this writ petition.
2. The petitioner received a show cause notice dated 30.05.2023 in relation to a demand for a sum of Rs.39,34,549/- towards tax and reversal of input tax credit. The said show cause notice was replied to on 12.08.2023. Eventually, the impugned order dated 30.12.2023 was issued.
3. Learned counsel for the petitioner challenged the impugned order on multiple grounds. The first ground of challenge was that the total demand under the show cause notice was for a sum of Rs.39,34,549/-, whereas the tax liability imposed under the impugned order is Rs.1,08,47,012/-. The next contention was that this discrepancy has arisen largely on account of imposing tax on “other expenses” by taking the figure from the profit and loss account of the petitioner. In this connection, learned counsel also pointed out that the total expenses indicated in the profit and loss account is Rs.48,53,977/- and the respondent treated this as the amount of tax to be paid instead of computing tax at the applicable rate on the above sum. The third contention was that no personal hearing was offered before the impugned order was issued.
4. Mrs. K. Vasanthamala, learned Government Advocate, accepts no-tice on behalf of the respondent. After obtaining instructions with regard to the show cause notice, she confirms that the notice called upon the petitioner to show cause as to why the tax demand of Rs.39,34,549/- should not be confirmed.
5. On comparing the show cause notice with the impugned order, it is clear that the confirmed tax liability of Rs.1,08,47,012/-under the impugned order exceeds the amount specified in the show cause notice substantially. As a consequence, the petitioner was deprived of an opportunity to show cause against the amount eventually confirmed as the petitioner’s liability. It is also noticeable from the impugned order that it was concluded therein that tax of Rs.48,53,977/- is payable by the petitioner towards other expenses. This sum of Rs.48,53,977/- appears to be the total amount indicated in Note 19 of the profit and loss account of the petitioner for the year ended 31.03.2020. Even if tax liability is imposable with regard to ‘other expenses’, the said amount cannot be treated as the tax liability of the petitioner. It also appears that no personal hearing was provided to the petitioner. For all these reasons, the impugned order cannot be sustained.
6. Therefore, the impugned order dated 30.12.2023 is set aside and the matter is remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of a copy of this order. All contentions are left open to the petitioner in course of remanded proceedings.
7. W. P.No.9067 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.10077 and 10079 of 2024 are closed.