Calcutta High Court Sets Aside GST Demand Over Reliance On Undisclosed Back Portal Data

The Calcutta High Court recently set aside a GST demand raised against a transport company after holding that the tax department relied on undisclosed back-office data.

Justice O.M. Narayan Rai held that the tax department relied on “data available in GST B.O. portal”, leaving the petitioner without an effective opportunity to respond.

The court focused on the manner in which the demand was raised in this case. It noted that the show-cause notices were founded on figures drawn from the GST back-office portal, which is not accessible to taxpayers.

“Since the notice to show-cause is based on "data available in GST B.O. portal‟ i.e. data available in the GST back office portal therefore they may not have access to the same as the same would be within the special knowledge domain of the GST authorities. In such a situation the petitioners would not have effective opportunity to deal with the notice to show cause,” the bench observed.

The petition was filed by Vedant Road Carriers Pvt. Ltd., a goods transport agency. The department had issued multiple show-cause notices alleging that the company had under-reported its outward supplies in its GSTR-3B returns (monthly GST return).

The notices asked the company to explain why its reported turnover appeared lower, relying on unspecified data from the back-office portal and granting limited time to reply.

Vedant Road Carriers argued that it was never shown the data forming the basis of the allegations and was therefore unable to respond meaningfully. It also pointed out that the notices were limited to an alleged mismatch in turnover.

However, in the adjudication order, the authority went beyond the scope of the notices. It held that the petitioner was liable to pay 12% GST under the Forward Charge Mechanism, even though goods transport agency services fall under the Reverse Charge Mechanism. The High Court said such an approach was not permissible.

“The adjudicating authority's interpretation of the situation could not have been unilaterally imposed on the petitioner in violation of a mandatory statutory provision,” the court said.

The bench was also critical of the appellate authority for brushing aside the lapse. “The appellate authority should also not have made light of such statutory violation by a statutory authority by calling it a mere technicality,” it observed.

The High Court set aside both the adjudication and appellate orders and remanded the matter to the Proper Officer for fresh consideration, making it clear that the taxpayer must be given an effective opportunity to respond.

Case Title: Vedant Road Carriers Pvt. Ltd. & Anr. v. The Assistant Commissioner of West Bengal State Tax, Jorasanko & Jorabagan Charge & Ors.

Citation: 2026 LLBiz HC (CAL) 20

Case Number: WPA 12654 of 2025

Counsel for Petitioner: Ankit Kanodia, Megha Agarwal, Piyush Khaitan

Counsel for Respondent: Tanoy Chakraborty, Saptak Sanyal