243.
ABC Ltd is a textile
based industry charging GST @ 5% on the goods supplied to its customers amounts
to Rs. 10 lac. The taxable person
in order to earn extra money did not pay the GST for
the period 2015-16 in the Govt account. The Assistant Commissioner issued
a SCN to the company on 1.6.2016 raising the following demand:
Tax=
10 lac
Interest
u/s 50
Penalty=
25% of tax
Meanwhile,
the applicant made an appeal to the appellate tribunal & obtained stay on
the SCN on 16.6.2016. The application was disposed off by the tribunal on
16.9.2016. explain the validity of the order if the order was
passed on:
(i) 16.8.2016, Monday
(ii) 15.01.2017,friday
(iii) 1.7.2017,thursday
(iv) 25.01.2017,
Sunday
(v)16.11.2017, Tuesday
(vi)25.12.2016, Monday
Since the tax is not paid to Govt in order to evade tax & earn money, therefore, it is a case of fraud & section 74 is applicable accordingly.
As per section 76(6) & 76(7) of the CGST Act, if any tax which is collected from any other person is not paid then the proper officer shall issue an order within 1 yr of passing of SCN (excluding the period of stay by appellate Tribunal or Court).
The period of stay in the above case granted by Appellate Tribunal is the period beginning from 16.6.2016 till 16.9.2016, i.e., 3 months.
Applicant received a SCN on 1.6.2016. The proper officer shall issue order demanding:
§ tax not levied or short levied or errorneous refund or input tax credit wrongly availed or utilized,
§ interest payable thereon u/s 50,
§ penalty @ 100 % of tax (tax not levied or short levied or errorneous refund or input tax credit wrongly availed or utilized)
within 1 year of issue of SCN i.e., till 1.6.2017. Penalty shall be reduced to 50% if payment is made within 30 days of issue of SCN.
However, the period of stay shall be excluded from the time limit, thus order shall be issued by the officer till 1.6.2017 + 3 months (period of stay) = till 1.9..2017.
(i) the order is passed on 16.8.2016 during the period of stay. Thus order is invalid.
(ii) the order is passed within the time limit of 1 year of SCN , excluding the period of stay. Thus, the order is valid.
(iii) the order is passed within the time limit of 1 year of SCN , excluding the period of stay. Thus, the order is valid.
(iv) the order is passed within the time limit of 1 year of SCN , excluding the period of stay. But the order is passed on Sunday which is a weekly holiday. Thus, the order is invalid.
(v) the order is passed on 16.11.2017 which is exceeding the time limit of 1 year of SCN (excluding period of stay). Thus, the order is invalid.
(vi) the order is passed within the time limit of 1 year of SCN , excluding the period of stay. But the order is passed on 25.12.2016 which is a national holiday. Thus, the order is invalid.