Month: January 2025

Assessee could not represent properly due to Hospitalization – Order Set Aside and remanded back

Citation:

Hemanta Kumar Sharma vs. Commissioner (Audit) GST and Central Excise

[2025] 170 taxmann.com 60 (Orissa)[20-12-2024]

High Court of Orissa

Facts of the Case:

  1. A Show Cause Notice dated 17th August 2023 and an Order dated 13th December 2023 was issued demanding Penalty.
  2. Assessee was hospitalized between 22nd April 2023 to 6th June 2023 and again from 15th October 2023 to 17th March 2024 and he was seriously ill during these days. He has sent his Accountant to appear for the Personal Hearing and that accountant could not represent well.
  3. Department submitted that the assessee was given the opportunity for Personal Hearing and further, the right to appeal was lost, as the due date has expired.
  4. It was held that the assessee needs to be given one last oppportunity to represent his case, since if he becomes ill and gets hospitalized again, he may not be able to put forth his contentions any more.
  5. Hence, the Order is set aside and it was ordered to provide one further opportunity to the assessee and to pass the order afresh .

Demand issued without considering the Second SCN is set aside

In the case of:

Frontline Wind Energy (P.) Ltd. vs. Assistant Commissioner (ST)

[2025] 170 taxmann.com 676 (Madras)[02-01-2025],

High Court of Madras

Facts of the Case:

  1. SCN was issued on 9th September 2021 for the FY 2019-20, demanding GST on sale of machinery of Rs. 10.34 Crores, based on the Annual report.
  2. Assessee has submitted a reply on 10th October 2021, stating that Rs. 9.50 Crores pertain to Sale of Business vide an agreement dated 14th June 2019.
  3. Considering the above reply, another notice was issued on 21st October 2021, reducing the demand of Rs. 9.50 Crores, since the same is a transfer of business as a going concern under Entry No. 4(c)(i) of Schedule II to the TNGST Act, 2017, as amended.
  4. However, an order has been passed on 26th November 2021, demanding GST on the entire amount of Rs. 10.34 Crores.
  5. The department has submitted that the assessee can prefer an appeal to the Appellate Authority under Section 107 of the Act.
  6. Hon’ble High Court of Madras has held that “impugned demand is unsustainable and is clearly arbitrary and contrary to the Notice dated 21st October 2021“. And the same is remitted back to the Assistant Commissioner to pass a fresh order on merits.

Relevant Provision: Entry No. 4 of the Schedule II to the TGST Act.

Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—

  1. the business is transferred as a going concern to another person; or
  2. the business is carried on by a personal representative who is deemed to be a taxable person

Detention – Order passed after 7 days of Notice is Set Aside

Citation:

S.A. Sugandh (P.) Ltd. vs. Chief Commissioner of CT & GST

[2025] 170 taxmann.com 518 (Orissa)[12-12-2024]

W.P.(C) No.31019 of 2024

High Court of Orissa

Provision Involved:

Section 129(3) (w.e.f. 1st January 2022) states that “The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1)”

Facts:

In the present case, the detention order is dated 30th August 2024, Notice is issued on 31st August 2024, but the Order for demand was made on 11th September 2024, which is beyond 7 days from the date of issue of Notice.

Since the Order for demand was made outside the limits of Section 129(3), the Impugned Order was Set aside.

Decisions Referred to:

RSL Overseas LLP vs. State of Odisha

[2024] 168 taxmann.com 46 (Orissa)[03-09-2024],

wherein it was held that if the notice for detention or seizure of goods was issued (on 14th August 2024) within 7 days from the next day of such detention (made on 7th August 2024), it was valid.

Demand issued without considering the Second SCN is set aside

In the case of:

Frontline Wind Energy (P.) Ltd. vs. Assistant Commissioner (ST)

[2025] 170 taxmann.com 676 (Madras)[02-01-2025],

High Court of Madras

Facts of the Case:

  1. SCN was issued on 9th September 2021 for the FY 2019-20, demanding GST on sale of machinery of Rs. 10.34 Crores, based on the Annual report.
  2. Assessee has submitted a reply on 10th October 2021, stating that Rs. 9.50 Crores pertain to Sale of Business vide an agreement dated 14th June 2019.
  3. Considering the above reply, another notice was issued on 21st October 2021, reducing the demand of Rs. 9.50 Crores, since the same is a transfer of business as a going concern under Entry No. 4(c)(i) of Schedule II to the TNGST Act, 2017, as amended.
  4. However, an order has been passed on 26th November 2021, demanding GST on the entire amount of Rs. 10.34 Crores.
  5. The department has submitted that the assessee can prefer an appeal to the Appellate Authority under Section 107 of the Act.
  6. Hon’ble High Court of Madras has held that “impugned demand is unsustainable and is clearly arbitrary and contrary to the Notice dated 21st October 2021“. And the same is remitted back to the Assistant Commissioner to pass a fresh order on merits.

Relevant Provision: Entry No. 4 of the Schedule II to the TGST Act.

Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—

  1. the business is transferred as a going concern to another person; or
  2. the business is carried on by a personal representative who is deemed to be a taxable person