GST Update

Desk of CA Praveen Sharma – 926 Series (CAPS)

Calcutta High Court in the case of Vedant Road Carriers Pvt. Ltd.

The Calcutta High Court examined a writ petition filed by Vedant Road Carriers Pvt. Ltd., a Goods Transport Agency, challenging the adjudication order dated 17.05.2023 passed under Section 73 and the appellate order dated 25.04.2025 passed under Section 107 of the WBGST/CGST Act, 2017.

The dispute arose after the petitioner was issued multiple show cause notices dated 15.03.2023 alleging short declaration of outward turnover in GSTR-3B, based on data extracted from the GST Back Office portal. The notices covered several tax periods and years.

The Court noted that despite issuance of six show cause notices, the petitioner was not granted reasonable time to submit replies. Even a request for adjournment at the stage of personal hearing was rejected, resulting in denial of effective opportunity of hearing.

A crucial issue identified by the Court was that the adjudication authority changed the very foundation of the demand. While the show cause notices were based on alleged turnover mismatch, the final order proceeded on a new ground by treating supplies made under Reverse Charge Mechanism as taxable under Forward Charge Mechanism, relying on Notification No. 20/2017-Central Tax (Rate). This ground was never part of the show cause notice.

The Court held that this amounted to a clear violation of Section 75(7), which prohibits confirmation of demand on grounds not specified in the notice. Although the appellate authority acknowledged this violation, it wrongly brushed it aside as a technical issue and upheld the demand.

The Court further observed that GST Back Office portal data is exclusively within the department’s control and non-disclosure of such data deprived the taxpayer of a fair chance to defend. The department’s reliance on the Mayank Mineral judgment of the Allahabad High Court was rejected, as the facts were distinguishable.

Accordingly, both the adjudication and appellate orders were quashed, and the matter was remanded with directions to issue proper notices, disclose relevant material, and grant reasonable opportunity of hearing in accordance with law.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS