In a recent ruling, the Madras High Court set aside the unreasonable order imposing Goods and Services Tax ( GST ) on vouchers. It was directed to the issued fresh order considering the contententions of the taxpayer/assessee.
A writ petition challenged a GST assessment order dated 28.12.2023, particularly concerning the imposition of GST on vouchers.
The petitioner, engaged in managing and implementing reward programs for corporate clients, faced scrutiny following an audit report. A show cause notice dated 04.09.2023 initiated the proceedings, to which the petitioner responded on 04.10.2023 and 30.11.2023. Subsequently, the impugned order was issued.
The petitioner’s counsel argued that vouchers, as per the definition in the Central Goods and Services Tax Act, 2017, did not constitute goods or services but rather actionable claims. Referring to pertinent legal precedents, including a judgment from the Karnataka High Court in Premier Sales Promotion Pvt. Ltd. v. Union of India and a recent ruling from the Court, the counsel contended that the petitioner’s role was that of an intermediary, exempting them from GST liability on vouchers.
The petitioner pointed out that the assessing officer captured the contentions of the petitioner in brief and, thereafter, recorded conclusions unsupported by reasons.
However, the respondent’s side, presented by senior standing counsel Mr. B. Ramanakumar, posited that the issue raised was within the purview of appellate authority rather than the writ court.
The essence of the dispute lay in the impugned order’s lack of reasoned analysis. Despite summarizing the petitioner’s contentions, the order failed to provide cogent reasons for rejecting them. Instead, it concluded that vouchers constituted actionable claims subject to GST, without adequate justification.
Recognizing the deficiency in the impugned order’s reasoning, a Single bench of Justice Senthilkumar Ramamoorthy set it aside solely concerning the imposition of GST on vouchers.
The issue was remanded to the respondent for reconsideration. The respondent was directed to afford the petitioner a fair opportunity, including a personal hearing, and to issue a fresh, reasoned order addressing each contention within two months. Accordingly, the writ petition was disposed of.
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