Delhi HC directed to hold final order w.r.t. reopening of old assessments of pre-GST period

Last updated: 26 July 2021

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The Delhi High Court has directed that while proceedings can continue regarding the reopening of old assessments for the pre-GST period (2015-2017), any final orders issued must be put on hold until the writ petition is decided. This comes after Tuli Motors challenged the validity of reopening these assessments, arguing that the relevant legislation was repealed by the CGST Act. The court's decision allows the process to move forward but prevents immediate enforcement of the outcome.

Court :
Delhi High Court

Brief :
In M/s. Tuli Motors through its Managing director & Anr v. Union of India &Ors. [W.P. (C) 6766/2021 decided on July 20, 2021] M/s. Tuli Motors ('the Petitioner') challenges the show cause notice dated April 19, 2021 ('SCN'), and the summons dated October 10, 2017, and January 27, 2021 ('Impugned Summons') issued for reopening the old assessments for the period 2015 to 2017.

Citation :
W.P. (C) 6766/2021 decided on July 20, 2021

In M/s. Tuli Motors through its Managing director &Anr v. Union of India &Ors. [ W.P. (C) 6766/2021 decided on July 20, 2021] M/s. Tuli Motors ('the Petitioner') challenges the show cause notice dated April 19, 2021 ('SCN'), and the summons dated October 10, 2017, and January 27, 2021 ('Impugned Summons') issued for reopening the old assessments for the period 2015 to 2017.

The Petitioner submitted that the old assessments for the period 2015 to 2017 cannot be reopened in the year 2021. The Petitioner emphasises that after the repeal of Chapter V of the Finance Act, 1994 ('the Finance Act') by the Central Goods and Services Tax Act, 2017 ('the CGST Act'), there is no power to initiate any fresh proceeding under the repealed Act i.e. the Finance Act.

Further, the Department submitted that the Hon’ble High Court, Delhi in case of Vianaar Homes Private Limited v. Assistant Commissioner (Circle-12), Central Goods & Services Tax, Audit-Il, Delhi &ors. [WP(C) 2245/2020, dated November 03, 2020] held that there is power to initiate fresh proceedings under the Finance Act despite coming into force of the CGST Act.

The Hon’ble High Court, Delhi directed that proceedings pursuant to the SCN and Impugned summons shall continue but the final orders shall not be given effect to till disposal of the writ petition. Listed the case on August 9, 2020 for next hearing.

FAQ :

The reopened assessments relate to the period between 2015 and 2017, which is prior to the implementation of the Goods and Services Tax (GST).

Tuli Motors was challenging a show cause notice and summons issued for reopening their old tax assessments from the pre-GST period, arguing that such reopening was not permissible after the repeal of the relevant Finance Act.

The Delhi High Court ordered that final orders in these reopened assessment proceedings should not be given effect to until the writ petition is disposed of.

Yes, the Delhi High Court directed that proceedings pursuant to the show cause notice and summons can continue.

Tuli Motors argued that the repeal of Chapter V of the Finance Act, 1994, by the CGST Act, 2017, meant there was no power to initiate fresh proceedings under the old Act.