In a recent ruling of Calcutta High Court the writ petition challenging an order passed by the Deputy Commissioner of State Tax was remanded owing to imposition of penalty on fully paid tax liability.
The petitioner Saptarshi & Anr filed a writ petition challenging an order passed by the respondent, Deputy Commissioner of State Tax, under Section 73 of the West Bengal Goods and Services Tax/ Central Goods and Services Tax Act 2017.
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The counsel Adv Kanodia for the petitioner, placed an order passed by the Additional Chief Secretary, Finance Department, before the court, submitted that the Additional Chief Secretary had categorically provided that the contractee department being the respondent nos. 5 and 6 were liable to compensate the petitioners for the incremental tax burden incurred due to implementation of GST by 4.05 per cent in respect of the final RA Bill.
The GST authorities notwithstanding the direction determined tax liability of petitioner despite the observations made by the Additional Chief Secretary, the respondents ( nos. 5 and 6 ) took no steps to disburse the additional payments with respect to final RA bills.
After filing the writ petition the petitioner’s advocate was intimated that an amount of Rs.24,68,253 was sanctioned by the respondent no 6 against the bill no. 147/24-25. And the amount was released in pursuance to the direction issued by the Additional Chief Secretary.
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It was submitted that the entire amount that was credited by the respondent no. 6 in favor of the petitioners, was transferred to the GST authorities by the petitioners in discharge of their tax liability. The petitioner’s counsel submitted that the orders read with Electronic Liability Ledger show that the demands raised by the respondents and payments made by respondents.
With reference to Section 128A(1)(b) of the CGST Act, 2017 and amendments it was submitted that, although three separate orders have been passed under Section 73(9) of the Act, since no appeal had been preferred , there is no order passed under Section 107(11) of the said Act.
As the petitioner had paid the full amount of tax payable as per the orders in Clause (b) of Section 128A(1) of the CGST Act, 2017, no penalty can’t be trusted upon the petitioner and all proceedings with respect to the orders shall be deemed to be concluded.
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It was also submitted that the date within which such payments are required to be done is yet to be notified. Mr Kanodia stated that the matter requires reconsideration from the authorities.
Advocate Ray, the Government pleader submitted that, though prima facie it appears that petitioner had discharged tax liability pursuant to the impugned orders, proper computation is required to be made since it would require reconciliation of the Electronic Credit Ledger and the payment made by the petitioners in Form GST DRC.
The single bench of Calcutta High Court comprising Justice Raja Basu Chowdhury observed that the matter requires reconsideration by respondent 1, hence the matter was remanded back to respondent 1 and was asked to reconsider it and pass a fresh reasoned order.
Till then demands raised by respondents in impugned Form GST DRC – 07 shall be stayed. Hence the writ petition was disposed of.
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