Suvarna Fibrotech Pvt Ltd VS The Assistant Commissioner

In the writ petition under consideration, the petitioner challenges an order dated 13.10.2022, identified as Appeal No. AP/GST/106/2021, referred to as the ‘impugned order’ for convenience. This order was issued by the ‘second respondent’, referred to as the ‘Appellate Authority’.

The case involves three primary statutes along with their respective rules:

1. The Central Goods and Services Tax Act, 2017 (C-G & ST Act),

2. The Tamil Nadu Goods and Services Tax Act, 2017 (Tamil Nadu Act 19 of 2017) (TN-G & ST Act),

3. The Integrated Goods and Services Tax Act, 2017 (I-G & ST Act).

Before addressing the core issues, it is important to note that under Section 112 of the TN-G & ST Act, there is a provision for appeal.

In the writ petition under consideration, the order dated October 13, 2022, referenced as Appeal No. AP/GST/106/2021 (hereinafter referred to as the ‘impugned order’), issued by the ‘second respondent’ (hereinafter referred to as the ‘Appellate Authority’), is being challenged.

The case involves the applicability and interpretation of three statutes and their associated rules: (i) the Central Goods and Services Tax Act, 2017 (‘C-G & ST Act’), (ii) the Tamil Nadu Goods and Services Tax Act, 2017 (Tamil Nadu Act 19 of 2017) (‘TN-G & ST Act’), and (iii) the Integrated Goods and Services Tax Act, 2017 (‘I-G & ST Act’).

Before delving into the specifics of the case, it is necessary to note that the writ petitioner has the right to appeal the impugned order under Section 112 of the TN-G & ST Act. This appeal would typically be heard by a Tribunal. However, the petitioner’s counsel has informed the Court that the Tribunal has not yet been constituted. This fact is acknowledged and undisputed by the learned counsel representing the Revenue,

In the writ petition under consideration, the order dated October 13, 2022, referenced as Appeal No. AP/GST/106/2021 (hereinafter referred to as the ‘impugned order’), issued by the ‘second respondent’ (hereinafter referred to as the ‘Appellate Authority’), is being challenged.

The case involves the applicability and interpretation of three statutes and their associated rules: (i) the Central Goods and Services Tax Act, 2017 (‘C-G & ST Act’), (ii) the Tamil Nadu Goods and Services Tax Act, 2017 (Tamil Nadu Act 19 of 2017) (‘TN-G & ST Act’), and (iii) the Integrated Goods and Services Tax Act, 2017 (‘I-G & ST Act’).

Before delving into the specifics of the case, it is necessary to note that the writ petitioner has the right to appeal the impugned order under Section 112 of the TN-G & ST Act. This appeal would typically be heard by a Tribunal. However, the petitioner’s counsel has informed the Court that the Tribunal has not yet been constituted. This fact is acknowledged and undisputed by the learned counsel representing the Revenue.

Given this situation, Mr. S. Rajasekar, representing the writ petitioner, requested that the Court review the impugned order. Mr. C. Harsha Raj, the learned Additional Government Pleader (Taxes) representing the Revenue, accepted notice on behalf of both respondents. With the consent of both counsels, the main writ petition was taken up and fully heard by the Court.

The essential facts of the case are as follows: The writ petitioner is engaged in the manufacturing of fiber glass composite molded products. The petitioner has been consistently filing monthly returns under both the C-G & ST Act and the TN-G & ST Act. On April 24, 2019, the petitioner’s business premises were inspected by officials from the Enforcement Wing, with subsequent inspections taking place on various dates, the last being May 28, 2019. During these inspections, certain defects were identified, leading to the creation of an inspection report. These inspections and the resulting report pertain to the financial year 2019-20.

In the captioned writ petition, the petitioner challenges an order dated 13.10.2022, referenced as Appeal No & Year: AP/GST/106/2021, issued by the Appellate Authority (second respondent). The case involves the application of three key statutes and their associated rules: the Central Goods and Services Tax Act, 2017 (C-GST Act), the Tamil Nadu Goods and Services Tax Act, 2017 (TN-GST Act), and the Integrated Goods and Services Tax Act, 2017 (I-GST Act).

The petitioner, who is engaged in manufacturing fiber glass composite molded products, has been filing monthly returns under both the C-GST and TN-GST Acts. Inspections by Enforcement Wing officials occurred on several dates in 2019, with the final inspection conducted on 28.05.2019. These inspections identified three main areas of concern: alleged sales suppression, non-compliance with statutory requirements (such as failure to maintain details of suppliers and customers, and proper production accounts), and failure to file GSTR-3B despite having filed GSTR-1, with taxes collected but not remitted to the government.

Following these findings, the Original Authority (first respondent) issued an order on 23.01.2020, imposing penalties for the identified violations. The penalties included 100% of the tax amount for sales suppression, a fine of Rs. 25,000 for non-compliance with statutory provisions, and another 100% penalty under Section 122(1) for the failure to pay collected taxes. The petitioner appealed this order, but the Tribunal to which the appeal should have been directed had not yet been constituted, a fact acknowledged by both parties.

With the absence of the Tribunal, the petitioner sought judicial review of the Appellate Authority’s order in the writ petition. The writ court, with the consent of both parties’ counsels, proceeded to hear the petition. The petitioner’s counsel argued for the court to assess the legality and appropriateness of the impugned order, while the Revenue counsel accepted notice on behalf of the respondents, facilitating the court’s consideration of the writ petition.

In summary, the case revolves around the challenge to a penalty order under GST laws, with procedural complications due to the lack of a constituted Tribunal to handle such appeals. The writ petition aims to evaluate the validity of the Appellate Authority’s decision in light of the statutory and regulatory framework governing GST compliance.

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