Madras High Court
M/S.Apl Apollo Tubes Limited (Unit Ii) vs State Tax Officer (Intelligence) on 10 April, 2024
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
W.P.No.9579 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 10.04.2024
CORAM:
THE HONOURABLE MR. JUSTICE SENTHILKUMAR RAMAMOORTHY
W.P.No.9579 of 2024 and
W.M.P.Nos.10596 & 10598 of 2024
M/s.APL Apollo Tubes Limited (Unit II),
Represented by its Vice President (Legal & Taxation),
Shri. Rajeev Kothari,
No.332-338, Alur Village Road,
Hosur – 635 109. ...Petitioner
Vs.
1. State Tax Officer (Intelligence),
Inspection – Group II,
Commercial Tax Buildings,
Perandapalli,
Hosur-635 109.
2.State Tax Officer (Intelligence),
Inspection Cell-I,
Salem-636 007. ... Respondents
Prayer: Writ Petition is filed under Article 226 of the Constitution of
India to issue a Writ of Certiorari calling for the records relating to
passing of the impugned order bearing Ref. No.GST INS-01/184/2022-
https://www.mhc.tn.gov.in/judis
1/8
W.P.No.9579 of 2024
2023 dated 08.03.2024 for the year 2021-2022 passed by the 1st
respondent and quash the same as the same being arbitrary, passed in
violation of the principles of natural justice, biased and the 1st respondent
lacks the jurisdiction to pass the impugned order.
For Petitioner : Mr.G.Natarajan
For Respondents : Mr.T.N.C.Kaushik,
Additional Government Pleader (T)
ORDER
An order in original dated 08.03.2024 is challenged insofar as it pertains to three issues. The petitioner is engaged in the manufacture and supply of tubes and pipes of iron and steel. Pursuant to show cause notice dated 30.06.2023, the petitioner replied on 03.11.2023. The order impugned herein was issued thereafter on 08.03.2024.
2. Learned counsel for the petitioner pointed out that the first issue relates to the issuance of credit notes by the supplier. As regards this issue, he submitted that arguments were advanced in course of W.P.No.8898 of 2024 and that the matter was remanded to the assessing officer based on such contentions. In addition, learned counsel for the https://www.mhc.tn.gov.in/judis 2/8 W.P.No.9579 of 2024 petitioner submits that a tax demand was imposed on discount provided in respect of freight. He points out that the freight was included in the total supply value and tax was paid thereon and that the levy of tax on the discount provided on freight is untenable. He next dealt with the Input Tax Credit (ITC) availed of by the petitioner with regard to items detailed in the tables at pages 50 & 51 of the typed set. By further contending that none of these items fall within the scope of sub-section (5) of Section 17 of applicable GST enactments, learned counsel submitted that the impugned order sets out no reasons for concluding that ITC cannot be availed in respect of these items under Section 17(5). For all these reasons, he submits that the impugned order calls for interference.
3. Mr.T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for the respondents. With regard to the issue pertaining to freight, learned counsel submitted that the tax demand was confirmed upon appraisal of the evidence presented by the petitioner. By pointing out that the petitioner was provided sufficient opportunity to place all material evidence on record, learned Additional Government Pleader contends that such evidence should not be re-appraised in course of https://www.mhc.tn.gov.in/judis 3/8 W.P.No.9579 of 2024 proceedings under Article 226 especially when the petitioner has a statutory remedy in respect thereof. As regards the disallowance of ITC on the basis that the items indicated in the tables do not qualify for ITC, he contended that the fact that the petitioner was not eligible for ITC is evident from the details set out in the impugned order in the form of tables.
4. With regard to the issue relating to the issuance of credit notes, in W.P.No.8898 of 2024, the impugned order was set aside and the matter was remanded for re-consideration upon considering the submissions of learned counsel for the petitioner to the effect that lower ITC was availed of in the subsequent months and that no revenue loss was occasioned as a result. The same reasons hold good in this writ petition also. As regards the imposition of GST of freight charges, the petitioner had placed on record a certificate from the Chartered Accountant with regard to bifurcation of freight as between the Hosur unit of the petitioner and the other units. Sample invoices were also produced. The finding of the assessing officer that the tax payer failed to discharge liability as regards an amount of Rs.54,29,071.53 pertaining to freight discounts warrants reconsideration.
https://www.mhc.tn.gov.in/judis 4/8 W.P.No.9579 of 2024
5. The last issue that falls for consideration relates to the denial of ITC with regard to certain inputs described in the tables at pages 50 & 51 of the typed set. In relation thereto, the following finding was recorded:
"I have carefully perused the reply sample invoice filed by the tax payer for availed ineligible ITC U/s 17(5). On verification documents filed by the tax payer and GSTR 2A it is found that the tax payer's have availed Input Tax Credit which are blocked credit U/s 17(5) not being for furtherance of business. Hence ITC is disallowed as not eligible.
CGST Tax due : Rs.1,48,650/-
SGST Tax due : Rs.1,48,650/-
Total Tax due : Rs.2,97,300/-
The Taxpayer instructed to pay the tax and Penalty under section 74, and also interest under section 50 of the TNGST Act, 2017."
6. Except for holding that the tax payer had availed ITC which is blocked credit under Section 17(5), no reasons are specified as to why such ITC was denied.
7. In these circumstances, the impugned order calls for interference with regard to the three issues discussed above. Consequently, the impugned order is set aside in relation to these three issues and remanded https://www.mhc.tn.gov.in/judis 5/8 W.P.No.9579 of 2024 for re-consideration. The first respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of a copy of this order. For the avoidance of doubt, it is made clear that the observations set out in this order are not intended to be binding on the first respondent while undertaking re-consideration.
8. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
10.04.2024 Index : Yes / No Internet : Yes / No Neutral Citation: Yes / No kj To
1.State Tax Officer (Intelligence) Inspection - Group II Commercial Tax Buildings Perandapalli, Hosur 635 109.
https://www.mhc.tn.gov.in/judis 6/8 W.P.No.9579 of 2024
2.State Tax Officer (Intelligence) Inspection Cell-1 Salem 636 007.
SENTHILKUMAR RAMAMOORTHY,J kj https://www.mhc.tn.gov.in/judis 7/8 W.P.No.9579 of 2024 W.P.No.9579 of 2024 and W.M.P.Nos.10596 & 10598 of 2024 10.04.2024 https://www.mhc.tn.gov.in/judis 8/8