M/S Surya Business Private Limited vs. The State Of Assam And 3 Ors.

Held

The Court held that there was no jurisdictional error committed by the Assistant Commissioner of State Tax (Respondent No. 2) in issuing the Show Cause Notice dated January 11, 2024. The Court found that the issuance of the notice was based on the Proper Officer's opinion regarding the existence of facts that warranted initiation of proceedings under Section 73 of the Act. The Court also noted that the questions of whether the Petitioner had paid the GST amount to Respondent No. 4 and whether Respondent No. 4 had duly submitted returns were questions of fact that could be adjudicated by the Proper Officer. The Court directed that the Petitioner be granted 30 days from the date of the order to submit a reply to the Show Cause Notice, wherein all contentions raised in the writ proceedings could be included. Furthermore, the Court directed that the period from January 12, 2024, until the date of the order be excluded while computing the period of limitation for passing an order under Section 73(9) of the Act, as per Section 73(10). The interim order previously passed was vacated.

Facts

The Petitioner, M/s Surya Business Private Limited, filed a writ petition challenging a Show Cause Notice dated January 11, 2024, issued by the Assistant Commissioner of State Tax (Respondent No. 2) under Section 73(1) of the Assam Goods and Services Tax Act, 2017. The Petitioner contended that the notice was issued without considering that they had paid GST to their supplier (Respondent No. 4) and that the supplier's failure to submit returns should not lead to proceedings against the Petitioner. The Petitioner also claimed to have evidence of payment to Respondent No. 4. The Petitioner had not submitted a reply to the Show Cause Notice due to the present writ petition and an interim order granted by a coordinate bench.

Key Issues

1. Whether the issuance of the Show Cause Notice dated January 11, 2024, by Respondent No. 2 under Section 73(1) of the Assam Goods and Services Tax Act, 2017, is legally sustainable, considering the Petitioner's claim of having paid GST to the supplier and the supplier's alleged non-submission or inadequate submission of returns? Petitioner's Arguments: The Petitioner argued that the Show Cause Notice was wrongly issued as they had fulfilled their obligation by paying GST to their supplier. They relied on Supreme Court judgments and presented documents as evidence of payment to Respondent No. 4. They contended that the supplier's default should not prejudice them. Revenue's Arguments: The judgment does not explicitly record arguments made by the Revenue. However, the Court's observations suggest that the Revenue, through the Assistant Commissioner, initiated proceedings based on the Proper Officer's opinion regarding the existence of facts warranting action under Section 73.