The Madras High Court directed the petitioner to file a statutory appeal under Section 107 of the CGST Act in the case where it was alleged 100% penalty was imposed wrongly under the Central Goods and Services Tax ( CGST ), 2017 for the period falling under Value Added Tax ( VAT ) regime.
The Petitioner, J.Milton Jeba Manickam has contested the assessment order dated 17.01.2024 passed by the respondent for the assessment years 2017-2018 to 2019-2020. The primary contention against the order lay in the confirmation of demand for the assessment year 2017-2018, allegedly breaching the limitation prescribed under Section 73(10) of the CGST Act, 2017.
Additionally, the imposition of a 100% penalty under Section 74 read with Section 122(2)(b) of the CGST Act, 2017, for the assessment years 2018-2019 and 2019-2020 was disputed.
The Standing Counsel for the respondent contended that the petitioner’s failure to produce records substantiating payment of taxes under the VAT regime has led to the confirmation of the demand for the assessment year 2017-2018. It is argued that regardless of the specific tax regime, there is a suppression of fact by the petitioner, justifying the penalty imposition.
It was further submitted, the petitioner has an alternate remedy, as there are several disputed questions of fact that arise for consideration, in view of the submissions made by the counsel for the petitioner.
A single bench of C. Saravan, after considering arguments from both sides, concluded that challenging the assessment order does not warrant interference under Article 226 of the Constitution of India. Instead, the petitioner is directed to pursue a statutory appeal under Section 107 of the GST Act before the appellate authority.
Furthermore, the court granted the petitioner liberty to file a statutory appeal within 30 days, condoning the delay in filing. The petitioner is instructed to pre-deposit the required amount under Section 107 of the CGST Act, 2017, for the appeal to be entertained.
Consequently, the writ petition was dismissed, with the petitioner granted the opportunity to seek remedy through a statutory appeal. No costs are imposed, and connected miscellaneous petitions are closed.
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