JUDICIARY ON GST AUDIT

 

B.P. Enterprises Vs. State of Orissa and others [2008] 018 VST 0405

Petitioner was a registered dealer under the provisions of the Orissa Goods and Service tax Act, 2004. Petitioner's business was audited under the Orissa Goods and Service tax Act, 2004 and a notice dated November 22, 2006 was served calling upon the petitioner to appear for hearing for the purpose of assessment on the basis of the audit report. The petitioner was heard and an assessment order dated July 3, 2007 was passed directing the petitioner to make certain payment in accordance with terms and conditions of the demand notice. He file a writ petition challenging the order dated July 3, 2007 on the ground that the only authority competent to assess the petitioner was the assessing authority of the range and that therefore the order passed was null and without jurisdiction:

Orissa High Court held that rule 49(3) of the Orissa Goods and Service tax Rules 2005, provides that if an application on the part of the dealer is moved raising the issue of jurisdiction before the assessing authority, in view of the provisions of rule 49(4) of the Rules, 2005 the assessing authority is bound to deal with the objection before proceeding for assessment. However, the petitioner neither considered it proper to challenge the notice dated June 16, 2007 nor filed any objection under rule 49(3) of the Rules, 2005 before the authority. As writ is a discretionary relief it should not be granted in favour of a person like the petitioner who just wanted to buy time and withheld public money adopting such dilatory methods.

Orissa High Court held that “In the fitness of the case, petitioner ought to have approached the appellate forum. However, in order to avoid the pre-deposit condition of20 per cent of the assessed amount, he approached this court directly. Thus, to meet the ends of justice, it is desirable that the petitioner be asked to deposit 20 per cent of the assessed tax and interest before the assessing authority, Range, Cuttack within a period of four weeks from today. The assessing authority, range shall issue a fresh notice for making a fresh audit assessment and shall complete all proceedings within a period of three months from the date of issuance of notice. However, it is clarified that any obserGSTion made herein shall not prejudice the case of either side.

               Petition succeeds and allowed and the order of assessment dated June16, 2007 is set aside. The aforesaid direction shall be carried out.

               Before parting with the case, we would like to point out that every day we are facing the assessment orders, in respect of the TIN dealers, passed by the assessing authority, circle, though such assessment orders are in violation of the statutory provisions as can be passed only by assessing authority, range. Even if the dealer does not take any objection in this regard, it becomes the duty of the assessing authority himself to keep the jurisdictional issue in mind.”

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