The Madras High Court held that Tamil Nadu Road Infrastructure Development Corporation (TNDRC) was not liable to pay Goods and Service Tax (GST) asit was was registered under the category “Tax Deductor.”. The bench set aside the GST demand order and directed the petitioner to file objections within 2 months.
The petitioner, TNDRC, had approached the High Court under Article 226 to issue a writ of certiorari on the respondents.
The petitioner’s counsel submitted that the company, which was incorporated as wholly owned by the Government of Tamil Nadu, was involved in the activity to obtain the grant given by the government of Tamil Nadu for the purpose of implementation of the construction and upgrading of roads in Tamil Nadu.
It was contended by the counsel that the petitioner should not be subjected to demand on the supply of goods or services under the GST Act, as the petitioner was only an agent of the government and was registered under the category “Tax Deductor”.
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It was further submitted that the petitioner could not reply to the Show Cause Notice ( SCN ) which was uploaded in the GST portal, as the number of staff was minimal and they had no idea how to use the GST portal.
The department’s counsel requested that the petitioner should be directed to deposit some amount out of the disputed tax demand in respect of the impugned assessment period.
The bench accepted the contention put forth by the petitioner that they were functioning with a skeleton staff, due to which they did not notice the SCN posted in the GST portal and thus could not send a reply for the same.
The bench directed the respondents to provide the petitioner with a fresh opportunity to present their case.
The bench rejected the submission made by the respondent’s counsel with regard to the deposition of a conditional amount as the petitioner was registered under the category of “Tax Deductor.”.
Justice Krishnan Ramaswamy of the Madras High Court set aside the impugned order, which was passed by the respondent, and directed the petitioner to file required documents within a period of 2 months from the copy of the order.
The respondent was directed to provide the petitioner with a fair opportunity of hearing and pass an order in accordance with the law.
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