A Single Bench of the Kerala High Court comprising Justice Gopinath directed fresh adjudication on the treating the product of the petitioner as a branded item, for determining the rate of tax as the additions thereby made were solely based on certain Facebook posts.
The counsel appearing for the petitioner stated that the petitioner had not started the business of branded rice in the financial year 2017-18 and that even the machinery for dealing in branded rice was purchased only in the year 2019.
It was also submitted that the proceedings which culminated in the impugned order appears to have been initiated on the basis of a facebook post published by the son of the petitioner in 2019, regarding the starting of business in branded rice.
It was further submitted that the assessing officer has not considered any contention taken by the petitioner and that even if the facebook post was to be taken into account, the same cannot be a material for completing assessment against the petitioner for financial year 2017-18 as the facebook post itself was only in the year 2019.
The Senior Government Pleader Thushara James objected to the grant of any relief to the petitioner stating that the petitioner has an adequate alternative remedy of appeal under Section 107 of the CGST / SGST Acts.
It was submitted that the impugned order was issued in the month of July and the writ petition itself is highly belated. It was also pointed out that recovery proceedings have been initiated following the demand raised.
K Manoj Chandran, Ammu Charles and S A Mansoor submitted for the petitioner that the judgment of the Kerala High Court in M/s. Ozone Granites [P] Ltd v. The Intelligence Officer, Commercial Taxes and Others is authority for the proposition that materials such as website information cannot be taken into account.
The High Court observed that, “the proceedings were initiated and continued against the petitioner on the basis of certain facebook posts which showed that the petitioner was dealing in branded rice” and remanded the matter to the the State Tax Officer for fresh adjudication within two weeks with due consideration of the contentions of the petitioner.
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