TMI Blog2022 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... urn within thirty days of the assessment order in terms of section 62(2) of the Act and therefore, the assessment order passed by the proper officer to the best of his judgment did not require any interference. Learned Appellate Authority has however failed to take note that the assessment order itself suffers from serious infirmities for non-compliance of principles of natural justice and procedural requirement prescribed under the Act in the absence of proper notice upon the petitioner. The impugned action has led to serious penal consequences which cannot be sustained in view of serious infirmities in the procedure adopted by the Assessing Officer. This Court is, therefore, of the view that the impugned assessment order dated 02.08.2018 passed by the Respondent No. 2 (Annexure-6)as also the Summary of the Order contained in DRC-07 dated 01.10.2018 issued by the Respondent No. 3 deserves to be set aside - As also admitted by the Respondent, petitioner has filed its return for the period in question. It is open for the Respondent to accept the return or undertake proper scrutiny thereof as per law. Learned counsel for the petitioner submits that pre-deposit made before the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e certified copy of the entire order sheet and also filed its GSTR-01 and GSTR-3B for the period December 2017 on 17.10.2018 within thirty days from the date of receipt of DRC-07, as per Section 62 of JGST Act, 2017 showing nil return and therefore, claiming ITC to the tune of ₹ 2.88 crores against the tax paid @ 18% on taking project loan from DHFL. Petitioner further filed its return being GSTR- 01 and GSTR-3B showing nil return for the month of January, February and March 2018 on 26.10.2018. All those returns were accompanied with interest and late fee, as per Annexure-4 series. Petitioner also made a request to the Commercial Tax Officer, South Circle, Ranchi through letter dated 25.10.2018 to revise the order in terms of return filed by it. It claimed that since it had not made outward supply of service, they are not liable to pay GST. However, petitioner was surprised to receive certified copy of the entire proceeding under section 62 of the JGST Act, 2017, from where he came to know that the assessment order dated 02.08.2018 has been passed. Respondent authorities verbally claimed that order has been mailed on that date itself. However, no such mail containing the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year to which tax not paid relates. It is submitted that Section 62(2) further provides that if valid return has been furnished by the registered person within thirty days of service of the assessment order under Sub Section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under Sub-Section (1) of Section 50 or for payment of late fee under Section 47 shall continue. It is submitted that issuance of notice under section 46 is a mandatory condition and no assessment under section 62 could be made without issuing notice under section 46 of the Act. Non-issuance of notice is not a mere procedural irregularity which can be cured. In this regard, reliance is placed upon the decision of the Apex Court in the case of Assistant Commissioner of Income Tax Versus Hotel Blue Moon [(2010) 3 SCC 259] in a case arising out of block assessment proceeding under section 143 of the Income Tax Act. ii. Petitioner contends that assessment order dated 02.08.2018 had not been served upon the petitioner through mail, as per categorical statement made at para-17 of the writ petition. For the first time on 01.10.2018, on receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate order dated 25.01.2020 (Annexure-9) be set aside. Petitioner may also be allowed to avail of Input Tax Credit amounting to ₹ 2.88 crores as shown in its GSTR-2A. 6. Respondents have filed a counter affidavit taking a plea that the writ petition is not maintainable in the light of an alternative remedy. Learned counsel for the Respondent Mr. P.A.S. Pati has however, submitted that DRC- 07 was issued only due to non-filing of the return by the petitioner on the basis of best judgment assessment provided under section 62 of the Act. Petitioner did not file its return within thirty days of passing of the assessment order in terms of section 62 (2) of the Act which could have led to withdrawal of the assessment order. Petitioner had filed its return in the month of October 2018 whereas ASMT-13 was passed and e-mailed to the petitioner on 02.08.2018 itself. No categorical statement has been made with supporting documents that notice under section 46 was served upon the petitioner before carrying out assessment order under section 62 of the Act. 7. Petitioner in his rejoinder affidavit has referred to the Standard Operating Procedure framed by the Central Board of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, - (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; (b) he has received the goods or services or both. Explanation. - For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent of his turnover in the State. CHAPTER-X Payment of Tax 50. Interest on delayed payment of tax. - (1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council. Provided that the interest on tax payable in respect of suppliers made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return under section 39 or section 45 of the Act even after service of notice under section 46, proper officer may proceed to assess the tax liability of the said person as per his best judgment taking into account all the relevant materials which are available or which he has gathered. Such an assessment order has to be issued within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates. Sub-section (2) further provides that if a registered person furnishes a valid return within thirty days of service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub section (1) of section 50 or for payment of late fee under section 47 shall continue. Requirement of notice before proceeding to pass assessment order under section 62 has been consciously laid down by the Legislature in the scheme of GST regime, so that defaulter may have an opportunity to file return with late fee in case return has not been filed within the time prescribed so that penal consequences arising theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hdrawn. Learned counsel for the petitioner has also taken a plea that filing of GSTR-01 and GSTR-3B was extended from time to time till 31.08.2021, of course with late fee, as required under section 47 of the Act. However, we need not to comment upon those issues. 12. The impugned assessment order passed under section 62 of the Act by the Respondent No. 2 suffers from a serious lacuna due to non-issuance of notice under section 46 of the Act. The action of the Respondent had led to blocking of ITC to the tune of ₹ 2.88 crores which has been adjusted against the disputed tax liability of ₹ 3,30,76,800/- imposed under the impugned assessment order. From perusal of the appellate order at Annexure-9, it appears that the Appellate Authority has only taken into consideration that the petitioner had failed to file its return within thirty days of the assessment order in terms of section 62(2) of the Act and therefore, the assessment order passed by the proper officer to the best of his judgment did not require any interference. Learned Appellate Authority has however failed to take note that the assessment order itself suffers from serious infirmities for non-compliance of ..... 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