Page 221 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] IN RE : OMSAI PROFESSIONAL DETECTIVE AND SECURITY SERVICES PVT. LTD. 139
and incomplete and the same is inflated to 150% of the declared
outward supplies to arrive at the probable suppressed outward
supplies for that month @ 50% (150% - 100%).
This cannot be treated as the correct basis for the estimation. No at-
tempt is made by the CTO to gather any material to at least indicate,
not to talk of establish, that the quantum of the outward supplies
declared by the dealer/supplier in Form GSTR-1 for that month is
incorrect and incomplete. It is not even rejected by the AA. But, still
the best judgment of the quantum of the outward supplies is made
declaring uniformly for all the months that the dealer has sup-
pressed 50% of its declared outward supplies in the relevant
months. Thus, the estimations involved in the best judgment as-
sessment herein are not sustainable. They are whimsical. They have
no basis. It is declared accordingly. The same are deleted.
Besides, it is judicially settled law that the estimations fall foul of
law if they are smacked off factors like wildness, vindictiveness, ar-
bitrariness, capriciousness, etc., The best judgment orders in issue
cannot be sustained even on these touch stones laid down by the
Apex Court in the catena of cases starting from the case of Commis-
sioner of Sales Tax, M.P. v. H.M. Esuf Ali Abdulla (way back in 1973)
32 STC 77 SC.
Conclusion :
Therefore, in view of the above emerged anomalies involving in-
voking of Section 62 unlawfully, because the relevant Section 39
does not speak of GSTR-3B in the listed returns, as clarified in the
above discussed judgment and in view of the erroneous method
adopted by AA for estimating outward taxable supplies through
best judgment without mentioning reasons/evidence, hence the tax
so levied by the AA of Rs. 36,22,84,718/- is annulled and modified as
per actual tax liability of the appellant for the period from Dec.,
2017 to Aug., 2018. In the result, the appeal is modified by fixing the
actual tax liability from Rs. 36,22,84,718/- (annulled) (to be deter-
mined as per GSTR-1 returns of the appellant for the period from
Dec., 2017 to Aug., 2018).
(2) Regarding levy of penalty of Rs. 36,22,84,718/- :
As already discussed the AA has not recorded exhaustive reasons,
while determining the tax as well as the penalty and passed
tax/penalty orders through a single order, which is not legitimate.
In this connection, the following case law is relevant and essential to
explore, before analyzing the penalty justifiability aspect.

THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN
AND
THE HON’BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI
WRIT PETITION NO. 33777 OF 2018,
dated 26-9-2018
[ORDER : Per the Hon’ble Sri Justice Ramesh Ranganathan]
Heard Sri P. Balaji Varma, Learned Counsel for the petitioner and
Sri Shaik Jeelani Basha, Learned Special Standing Counsel for
GST LAW TIMES  2nd July 2020  221