Royal Infinity Multiventures (P.) Ltd. V/s Addl. Commissioner GST & Central Excise Commissionerate ( HIGH COURT OF ORISSA) :
Date of Order : 14-05-2024
simplified explanation of the High Court of Orissa’s ruling in the case of Royal Infinity Multiventures (P.) Ltd. vs. Addl. Commissioner GST & Central Excise Commissionerate regarding overlapping assessment orders:
Background:
- Royal Infinity Multiventures filed a writ petition challenging two assessment orders issued by the tax authority.
- The first order (Annexure-1, dated 09.11.2023) was based on an intelligence report and covered the assessment for the financial years 2017-18 and 2018-19.
- The second order (Annexure-5, dated 04.12.2023) was issued later, covering the period from October 2017 to March 2018.
- The petitioner argued that the second assessment order did not consider the period already assessed in the first order, resulting in overlapping demands.
Court’s Decision:
- The High Court observed that while the first order (Annexure-1) covered assessments based on intelligence reports for 2017-18 and 2018-19, the second order (Annexure-5) for October 2017 to March 2018 was issued separately without accounting for the overlapping period already assessed.
- It noted that despite the petitioner notifying the tax authority of the overlapping periods, they did not participate in the proceedings despite three notices issued.
- The court highlighted that the tax authority did not take into account the previous assessment while passing the subsequent order.
- Emphasizing procedural fairness, the court held that the failure of the petitioner to participate in the proceedings does not absolve the authority from considering overlapping periods already assessed.
- Therefore, the court quashed the second assessment order (Annexure-5) and remanded the matter back to the tax authority (Adjudicating Authority) for rehearing.
- The court directed the petitioner to appear before the Adjudicating Authority for a fresh hearing on 23rd May 2024 and instructed the authority to consider all relevant facts, including the overlapping assessment periods, before passing a new order.
- Importantly, the court did not comment on the merits of the tax liability itself but focused on the procedural irregularity in issuing overlapping assessment orders without due consideration.
Implications:
- This ruling underscores the importance of tax authorities considering previously assessed periods before issuing subsequent orders to avoid overlapping demands.
- It highlights the obligation of taxpayers to participate in proceedings and bring relevant facts to the attention of the authority.
- The decision ensures procedural fairness and adherence to legal requirements in tax assessments under GST laws.
Conclusion:
- The High Court’s decision in this case ensures that tax assessments are conducted fairly and in accordance with the law. By quashing the subsequent assessment order and remanding the matter, it upholds the principle that all relevant periods and facts must be considered before making tax demands. This protects taxpayer rights and promotes transparency in tax administration.
Relevant Section : 73 of CGST Act.
