Summary: A court recently overturned a tax penalty imposed on M/s Shankarampet Projects Private Ltd for the financial year 2019-2020. The case involved a misunderstanding about GST obligations under different project types.
The case started when the tax office in Hyderabad charged M/s Shankarampet Projects Private Ltd with extra taxes, interest, and penalties for the financial year 2019-2020. The company reported its income based on what they expected to receive during its road construction phase. However, there was a mix-up because they mistakenly labeled some income as not taxable, which led to extra tax bills.
"The company accidentally labeled the difference as not taxable income," the judgment noted.
M/s Shankarampet Projects Private Ltd argued that their project was under the Hybrid Annuity Model (HAM), not the Build-Operate-Transfer (BOT) model. They claimed that the decision-makers misunderstood their project type, leading to incorrect tax assessments.
"The decision-makers wrongly decided that the tax exemption claimed was not valid," the company argued.
The court, led by Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin, found that the tax office didn’t properly consider the evidence the company provided. The judges noted that the reasons for the penalty were not explained well.
"Reasons are the core of the order," the court emphasized, citing a previous Supreme Court decision.
The court decided to cancel the earlier order and asked for a new review. M/s Shankarampet Projects Private Ltd is scheduled to appear before the tax office on October 6, 2025, for a new hearing.
The court overturned the tax penalty because the evidence was not properly considered, and the reasons for the penalty were not explained well. The case will be reviewed again, giving M/s Shankarampet Projects Private Ltd another chance to present their case clearly.
