The Madras High Court held that the documents such as GSTR 9, GSTR 9C, and Income Tax records alone are insufficient to establish that Goods Transport Services fall under the Reverse Charge Mechanism ( RCM ) category.
The petitioner challenged an order dated 18.12.2023 in the writ petition primarily on the grounds of denying the petitioner a fair chance to contest the tax demand on its merits. The petitioner, engaged in providing goods transport services, asserts that their services fall within the scope of the reverse charge mechanism.
Baisany Ramiah Chetty Pandurangan, the petitioner responded to a notice in Form GST ASMT 10 dated 03.07.2023 by uploading a reply on the portal on 19.09.2023, elaborating on the discrepancy between their GSTR 3B and Form 26AS due to services charged under the reverse charge basis. However, the impugned order was issued on 18.12.2023 without calling for certain documents referenced within it.
The counsel for the petitioner emphasised that had these documents been requested, they would have been promptly provided. The petitioner, upon instruction, agreed to remit 10% of the disputed tax demand as a condition for remand.
Mr. C. Harsha Raj, Additional Government Pleader, representing the respondent, acknowledged the petitioner’s claim of being unable to avail a personal hearing due to illness. He stressed the petitioner’s obligation to substantiate their claim regarding the reverse charge mechanism with all necessary documents.
The court noted the submission of GSTR 9, GSTR 9C, and income tax documents to substantiate that the Goods transport services fall within the scope of the Reverse Charge Mechanism ( RCM ).
Further observed that “As contended by learned Additional Government Pleader, it was incumbent on the petitioner to provide all relevant documents to establish that the services fall within the scope of Section 9(3) of applicable GST enactments read with Notification No.13/2017 – Central Tax (Rate) dated 28.06.2017.”
However, the petitioner categorically asserted that their services fell within the prescribed provision and notification. Additionally, it was stated that documents supporting the transport of goods, including corresponding consignment notes, were available.
Given the circumstances, a Single bench of Senthilkumar Ramamoorthy set aside the impugned order dated 18.12.2023, contingent upon the petitioner remitting 10% of the disputed tax demand within two weeks from receiving a copy of this order.
Within this period, the petitioner was permitted to file a reply to the show cause notice along with additional documents. Upon receipt of the reply and satisfaction of the remittance, the respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months.
Consequently, the writ petitions were disposed of without costs, and associated miscellaneous petitions were also closed.
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