Assessment orders must be based on a proper consideration of the objections raised by the taxpayer and cannot be issued mechanically without application of mind.

Headnote:
GST - Seigniorage Fees - Forward Charge Basis - Turnover - Assessment Orders Quashed
Fact of the Case:

The petitioner, involved in quarrying and mining, challenged assessment orders pertaining to distinct assessment periods. The orders imposed GST on reverse charge basis on seigniorage fees and on forward charge basis based on sales turnover. The petitioner contended that the assessment orders were based on tentative sales turnover, while they had declared a higher taxable turnover and paid taxes accordingly.
Finding of the Court:

The court found that the assessment orders were issued mechanically without application of mind, as they did not consider the petitioner's objections based on the declared taxable turnover.
Issues: 1. Levy of GST on reverse charge basis on seigniorage fees.2. Levy of GST on forward charge basis based on sales turnover.
Ratio Decidendi: The court held that the assessment orders were liable to be quashed insofar as they dealt with the imposition of GST on forward charge basis on the turnover. The court directed the assessing officer to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue fresh assessment orders on this aspect within two months.
Final Decision: The court quashed the assessment orders only insofar as they dealt with the imposition of GST on forward charge basis on the turnover and remanded the matters for reconsideration on this aspect.

COMMON ORDER

In all these writ petitions, assessment orders pertaining to distinct assessment periods are challenged. The petitioner is involved in quarrying and mining of rough stone. As a registered person, the petitioner filed returns under applicable GST statutes. In relation thereto, in response to intimations and show cause notices, the petitioner submitted replies. The orders impugned herein were issued thereafter.

2. Learned counsel for the petitioner invited my attention to the assessment orders. He pointed out that two issues were dealt with in these assessment orders. The first issue pertains to the levy of GST on reverse charge basis on seigniorage fees. The second issue relates to levy of GST on forward charge basis based on sales turnover. He points out that the assessment orders proceed on the basis of the tentative sales turnover, whereas the petitioner had declared a higher taxable turnover and paid taxes on that basis. Therefore, he contends that the impugned assessment orders warrant interference insofar as the imposition of GST on forward charge basis is concerned. As regard seigniorage charges, he submits that the judgment of the Division Bench squarely applies.

3. Mr.V.Prasanth Kiran, learned Government Advocate, accepts notice for the respondent. He submits that the petitioner was provided sufficient opportunity and that the impugned orders record that the petitioner failed to avail of personal hearing although offered thrice by the assessing officer. Hence, he submits that these writ petitions are liable to be rejected.

4. Insofar as the assessment orders deal with seigniorage charges, the directions issued in paragraph 9 of the Division Bench judgment squarely apply. However, with regard to the imposition of GST on forward charge basis on turnover, the impugned assessment orders record the objections of the petitioner. The objection, in each case, is based on the declared taxable turnover of the petitioner. The petitioner contends that taxes were paid on the basis of the declared taxable turnover and that, therefore, the impugned assessment orders were issued mechanically without application of mind.

5. On examining the impugned assessment orders, especially the extraction of the petitioner's objections with regard thereto, the contention of learned counsel for the petitioner is liable to be accepted. As a consequence, on this aspect, the impugned assessment orders call for interference.

6. Accordingly, the assessment orders impugned herein are quashed only insofar as such orders deal with the imposition of GST on forward charge basis on the turnover. Consequently, these matters are remanded for re-consideration on such aspect. The assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh assessment orders on the above mentioned aspect within a maximum period of two months from the date of receipt of a copy of this order.

7. W.P.Nos.5456, 5459, 5460 and 5463 of 2024 are disposed of on the above terms. No costs. Consequently, W.M.P.Nos.6024, 6026, 6028, 6029, 6031, 6032, 6034 and 6035 of 2024 are closed.

05.03.2024 rna Index : Yes / No Internet : Yes / No Neutral Citation: Yes / No To The Deputy State Tax Officer (also known as the Deputy Commercial Tax Officer), Harur Assessment Circle.

SENTHILKUMAR RAMAMOORTHY,J rna and W.M.P.Nos.6024, 6026, 6028, 6029, 6031, 6032, 6034 & 6035 of 2024

05.03.2024

Click Here to Read the rest of this document