No, the Honorable Madras High Court in the case of M/s. SS Traders vs. Joint Commissioner (ST) (Intelligence) [Writ Petition No. 15363 of 2021 dated August 16, 2024] set aside the order and remanded back to pass a fresh order. The Honorable Court noted that the petitioner is mulct with huge tax liability vide Assessment Order and on the date of hearing, 105 pages’ order was passed which was technically impossible. The Honorable Court observed that the Impugned SCN was served dated February 11, 2021, to which the Petitioner replied on March 15, 2021, and requested three weeks-time. Pursuant to the reply, an SCN was issued on March 22, 2021, and the date of the personal hearing was fixed on April 06, 2021. The Petitioner filed a reply on March 31, 2021, and requested a fifteen-day time period. The Respondent-2 issued another SCN on April 07, 2021, and granted a final opportunity to the Petitioner for filing objections on or before April 12, 2021, and directed them to appear for a personal hearing on April 12, 2021.
It was contended that goods were not received by the Petitioner and the Petitioner had not deliberately paid tax from Electronic Cash Register. The Petitioner had wrongly claimed/availed Input Tax Credit. The
Petitioner contended that they cannot be found fault with on account of failure of the supplier to file statutory returns as is contemplated under the respective GST enactments. The supply of goods was directly from the place of storage godown/warehouse and the invoices were directly raised from the branch office of the head office. The Petitioner had also received consideration for the supplies affected and therefore, it cannot be said that no supply was affected. Lastly, the case was heard on April 12, 2021, and on the same date, the Impugned Order has been passed consisting of 105 pages, which is technically impossible as the Petitioner was fully heard on the said date. The Respondent-2 without considering the Petitioner’s contentions passed an Assessment Order dated April 12, 2021 for the Assessment Year 2017-18.
The Honorable High Court held that the Impugned Order is quashed and shall be treated as an addendum to SCN dated February 11, 2021, and remitted the case back to the Respondents to pass a fresh order where the Petitioner shall deposit 10% of the disputed tax within a period of six weeks and shall file a reply to the Impugned Order. If the Petitioner fails to comply with the conditions, it shall be construed the writ petition was dismissed with liberty to proceed against the Petitioner
Author’s Comments
Where self-assessment is challenged, the burden rests on the Revenue making the allegation and not on the Registered Person-suffering the allegation. The Burden of proof is not discharged by making the allegation. The Burden of proof is discharged only when a mountain of evidence commensurate with the nature of the allegation made is produced and appended to notice.
Allegations of severe wrong-doing require proportionately substantial evidence. Evidence is not extracted from books of accounts or statements taken on-oath. Evidence is that proves something. Section 155 of the CGST Act places the burden to prove regarding “eligibility to credit” only on the taxpayer. Once, it is shown that all the conditions of section 16 are fulfilled, the taxpayer’s burden is discharged and the onus shifts on the department to prove their case. In the instant case, the petitioner could have disputed the allegation stating that being a trader; if the outward supplies are accepted to be genuine then inward supplies have to be genuine. And if inward supplies are in-genuine and outward supplies are accepted to be genuine, then the allegation is deeply rooted in incomplete investigation, surmise, and conjecture only. The Revenue cannot approbate and reprobate on the same issue. The taxpayer must have allowed the revenue to prove their case and in the absence of evidence in support of allegations, allegations are self defeating.
Issuance of an order on the date of PH is not something that can be pleaded to highlight how exactly the taxpayer is aggrieved in such a scenario. And decision itself gives liberty for the respondent to decide afresh, which is otiose. Whether to celebrate such an order that remands back the case to the Proper officer for another round of adjudication (re-adjudication) is a matter of choice and strategy. In the Author’s considered opinion, such orders are unable to fetch the desired relief because SCN is not vacated; only a short-term relief (at a cost) is provided.
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