GST Non-Payment: Go After Sellers, Madras High Court Tells Tax Department – BloombergQuint

Chennai News

The high court dismissed the tax department’s contentions.

It pointed out a fundamental flaw in the revenue department’s approach i.e. no inquiry against the defaulting sellers and non-initiation of recovery action against them. Once the department realised that the sellers have collected tax from the traders and not deposited it, strict action should’ve been taken against the former. Even more so, since the department believes there was no movement of goods, the high court said.

The judgment is important as it casts an obligation on the revenue authorities to catch hold of the seller if it has collected tax from the buyer but not deposited with the government, Abhishek Jain, partner at EY, said. The authorities cannot singularly take action against the buyer, he added.

Source: https://www.bloombergquint.com/law-and-policy/gst-non-payment-go-after-sellers-madras-high-court-tells-tax-department