Allahabad HC upholds Tax Penalty u/s 74 UPGST Act imposed on Resort Owner based on Corroborative Evidence [Read Order]

The Allahabad High Court upheld the tax penalty under Section 74 Uttar Pradesh Goods and Service Tax Act (UPGST Act) imposed on Resort Owner based on Corroborative Evidence.

The appeal was filed by the petitioner namely, M/S Jalsa Resorts (India) Private Limited under Section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017 against the order passed by the Assistant Commissioner, Commercial Tax, whereby, tax penalty and interest on amount of Rs.48 lakhs was imposed on the petitioner.

On the basis of the report submitted by the Special Investigation Branch, the notice under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 was issued to the petitioner demanding Rs.48 lakhs as tax penalty and interest. The petitioner did not reply to the show cause notice and also did not produce the relevant documents for assessing the correct tax from July, 2017 to March, 2018.

It was said when the search was made by the Special Investigation Branch on 06.12.2017, the petitioner was not well and he was admitted in a hospital and all the relevant documents were with the accountant and therefore, the relevant documents could not be produced before the Special Investigation Branch, who conducted the raid.

The petitioner had accepted before the appellate authority that in the financial year concerned, he had received the taxable amount Rs. 43 lakhs on which, he had paid Rs. 3 lakhs each for State GST. and Central GST From the entries, as found in the diary recovered by the Special Investigation Branch, it was noticed that the petitioner had received much more advance than it was shown in the returns.

A Single Bench of Justice Dinesh Kumar Singh noted that if the petitioner was not in a position to produce the relevant documents at the time of the raid by the Special Investigation Branch, nothing prevented him to produce all the relevant documents before the Assessing Authority in pursuance to the show cause notice issued to him. The petitioner never submitted the relevant documents before the Assessing Authority and the assessment order was an ex-parte order.

“I do not find any substance in the submission of the learned counsel for the petitioner that the assessment order is based on presumption. The appellate authority has examined each and every document submitted by the petitioner as well as the documents recovered by the Special Investigation Branch” the Bench opined.

To Read the full text of the Order CLICK HERE

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