The case revolves around appeals by Sarkar Diesel & Anr. against orders by the learned Single Judge in three writ petitions, where interim relief was denied. The Calcutta High Court heard the appeals and writ petitions together.
Central Issue In the Case of Sarkar Diesel
The problem is whether the Joint Commissioner of State Tax, Berhampore Circle, addressed all the problems that the appellants raised in their appeal.
Arguments and Results
Earlier the Appellate Authority overturned the Deputy Commissioner of State Tax’s order, ruling that the penalty must be levied u/s 73, not Section 74, of the West Bengal Goods and Services Tax (GST) Act, 2017. It was due to the reason that there were no allegations of fraud or willful misstatement. However, the Appellate Authority did not regard other substantial foundations raised by the appellants.
After the appeal, a declaration from Indian Oil Corporation Limited (IOCL) was obtained by the appellants expressing that they had claimed Goods Transport Agency (GTA) services from the appellants in 2017-2020 and had released the GST obligation under the Reverse Charge Mechanism (RCM). The same new evidence was not available at the time of the initial proceedings and can impact the case outcome.
It was remarked by the court that the Assessing Office laid on an Advance Ruling from Goa which mentioned that the issuance of the pollution control certificates must be levied to tax at 18%.
The court mentioned that an Advance Ruling is merely binding on the applicant and the jurisdiction that issued it, not on third-party taxpayers or other jurisdictions. Consequently, the Goa ruling need not influence the re-adjudication of the case in West Bengal.
Calcutta High Court Final Decision
The orders of both the Appellate Authority and the Original Assessing Officer (AO), remanding the case back to the Assessing Officer for fresh consideration, considering the new evidence furnished via IOCL have been set aside by the court.
The petitioners were directed to provide a new representation with all the pertinent documents within 4 weeks. The assessing officer was asked to provide a personal hearing to the appellants and re-adjudicate the case without being impacted by earlier findings or the Goa Advance Ruling.
The court highlighted that the Assessing Officer should practice power u/s 73, not Section 74, as rectified by the Appellate Authority. The same ruling highlights that Advance Rulings are explicit to jurisdiction and only binding on the applicants who strive for them. They did not automatically apply to assessments in other states or cases.
Closure: A fair reassessment has been assured by the ruling of the Calcutta High Court, stressing the significance of considering the fresh evidence and jurisdictional limitations of Advance Rulings. Through clear directives, the matter was remanded for re-adjudication to consider the new declaration by IOCL and to comply with the legal provision under the GST Act.
| Case Title | Sarkar Diesel & Anr |
| Citation | FMA 604 of 2024 with IA No: CAN/1/2024 |
| Date | 25.06.2024 |
| For the Petitioner: | Mr Himangshu Kumar Ray, Mr Arup Dasgupta, Mr Paban Kumar, Mr Bhaskar Sengupta, Mr Subhasis Poddar, Ms Shiwani Shaw |
| For the Respondents: | Mr. Anirban Ray, Md. T.M.Siddiqui, Mr. Tanoy Chakraborty, Mr. Saptak Sanyal |
| Calcutta High Court | Read Order |
