GST Demand On Events Posted On Facebook: Andhra Pradesh High Court Directs Company To Approach Appellate Authority

The division bench of Justice C. Praveen Kumar and Justice Tarlada Rajasekhar Rao dismissed the petition by giving liberty to the petitioner to approach the Appellate Authority.

The petitioner is in the business of event management. It is said that the Effective Date of Registration (EDR) of the Petitioner is from 01.07.2017 and the registration was cancelled from 01.08.2020 on the application made by the Petitioner. The petitioner has filed GSTR 3B returns from July 2017 to January 2020, disclosing the taxable turnover and taxes paid.

In the month of August 2018, the husband of the petitioner suffered a paralytic stroke and was under medical treatment in Hyderabad in a rehabilitation centre. The petitioner could not conduct event management except for small events up to January 2020 for livelihood. In the month of August 2020, the husband of the petitioner again had an attack of brain paralysis and was bedridden. As such, no business was done. The petitioner applied for a cancellation of the GST registration. Due to COVID-19 from March 2020 up to August 2021, no permission was granted to conduct functions having huge gatherings except for limited members.

However, pursuant to the authorization issued by the Joint Commissioner (ST), he visited the premises of the Petitioner Firm on 5.11.2021. By that time, both the petitioner and her husband were in Hyderabad for medical treatment of the husband. The petitioner gave a statement to the respondent and furnished details of turnovers disclosed in GSTR 3B returns from July 2017 to March 2020. The respondent issued a Show Cause Notice proposing to levy IGST of Rs 18,00,000, CGST of Rs 26,55,000 and SGST of Rs 26,55,000 for conducting major events by the petitioner and her husband.

The husband of the petitioner appeared before the respondent and obtained copies of the Facebook documents available with the respondent and requested 10 days to submit a reply. Though the husband of the petitioner explained to the respondent that they have not conducted any events in respect of documents available on Facebook. The documents were uploaded only for advertisement purposes. The petitioner requested the respondent to make available the information, if any, conducted by them with other documentary evidence. The respondent did not provide any information except the Facebook documents.

The petitioner submitted that the order passed by the respondent without providing an opportunity of hearing is in violation of principles of natural justice. The assessment order passed by the respondent was purely based on Facebook details and social media postings. In other words, without any event being conducted by the petitioner, the authorities have burdened him with liability.

The department contended that many factual aspects are involved, which are required to be adjudicated by the Tribunal and definitely not by this Court under Article 226 of the Constitution of India. The information has been gathered from the personal window of the petitioner, which clearly indicates that the petitioner has conducted many events.

The court held that, prima facie, it cannot be said that the petitioner has not conducted any event during the relevant period.

Case Title: Vasavi Wedding And Event Planners Vs State of Andhra Pradesh

Citation : 2022 LiveLaw (AP) 95

Case No: W.P. No. 10250 of 2022

Dated: 14/07/2022

Counsel For Petitioner: Advocate Singam Srinivasa Rao

Counsel For Respondent: Government Pleader

Click Here To Read/Download Order