LI Network
Published on: December 12, 2023 at 20:55 IST
The Patna High Court has sided with a Cooperative Society registered under the Bihar Goods and Services Tax Act, 2017 (BGST Act), affirming that the Solid Waste Management Activity conducted by the petitioner is exempt from BGST.
The court invalidated assessment orders and demand notices against the Cooperative Society, highlighting that the solid waste management disposal work awarded to the petitioner does not involve the supply of goods.
A division bench consisting of Chief Justice K. Vinod Chandran and Justice Partha Sarthy asserted, “There is no supply of goods in the solid waste management disposal work awarded to the petitioner. In the above circumstances, the activity of the petitioner regulated by the work order produced as Annexure-5 and the consideration received for the same would be exempt from the BGST Act.”
The bench further emphasized that a person declared a proclaimed offender loses the right to pre-arrest bail.
The petitioner, represented by counsel Ashok Kumar Thakur, challenged an assessment order confirmed by the first Appellate Authority under the BGST Act through a writ petition. The petitioner contended that the levy was not sustainable based on the specific notification exempting the activity carried out by them, involving the removal of solid waste, from the BGST Act.
Notably, the tax levy had been proposed based on deductions made by the Nagar Parishad, Jamalpur, under the Income Tax Act. The petitioner argued that the mere deduction of tax on income, a direct tax, could not lead to the levy under the Goods and Services Tax Act, an indirect tax.
The petitioner, a Cooperative Society registered under the BGST Act, had been issued a notice under Section 74, quantifying the demand for tax and penalty for the Assessment Year 2019-20.
During the pendency of the Tribunal’s constitution, a stay of recovery on payment of 20 percent of the disputed amounts was in effect, as specified in the assessment order. The petitioner contended that the invocation of jurisdiction under Section 74 was illegal and improper.
The Court ordered the petitioner to appear before the Assessing Officer within a month to provide details of tax deductions made by the Municipality under the Income Tax Act and evidence of the consideration for solid waste disposal work.
The Assessing Officer was instructed to issue orders in accordance with the law, considering the declaration made regarding the non-exigibility of tax on solid waste management activities and sanitation work carried out for the State or local authorities.
Case Title: Mahavir Sharmik and Nirman Swalambi Sahkari Samiti Limited vs State of Bihar & Ors.