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:
- 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.
- 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.
- 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.
- However, an order has been passed on 26th November 2021, demanding GST on the entire amount of Rs. 10.34 Crores.
- The department has submitted that the assessee can prefer an appeal to the Appellate Authority under Section 107 of the Act.
- 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—
- the business is transferred as a going concern to another person; or
- the business is carried on by a personal representative who is deemed to be a taxable person
Tax Diary 