M/S.Hotel Holiday Resorts PVT.LTD. vs. Superintendent (Audit)

Held

The Court held that the contention raised by the petitioner was required to be accepted. It found that the demand notices issued under Annexures-4 and 5 were superseded by the subsequent notice. The Court clarified that only the competent authority can issue a notice and proceed with the matter. Consequently, the petitioner was directed to appear before the competent authority within four weeks and file a reply, which would be considered in accordance with the law. The Court explicitly stated that the notice at Annexure-7 would only cover the period from 1st April, 2017, and would not encompass the period from 1st April, 2016, to 31st March, 2017, which was the subject matter of the notice at Annexure-4. The ratio decidendi is that contradictory and overlapping demand notices issued by tax authorities are unsustainable, and a clear, operative notice from the competent authority is required for further proceedings.

Facts

The petitioner filed a writ petition challenging demand notices issued by the Superintendent (Audit), GST & Central Excise, Audit Commissionerate, Bhubaneswar. These notices, dated 04.04.2018, 10.04.2018, and 02.04.2018, were purportedly based on the approval of the Commissioner (Audit) and pertained to the period 2013-14 to 2016-17. The petitioner contended that audits for these periods had already been conducted by the same Audit Commissionerate. The court noted that multiple notices were issued for overlapping periods, including a notice dated 01.01.2019, which stated that the last audit was done on 31.03.2016 and notices for 2016-17 had already been issued. The court observed that these notices were running contrary to each other.

Key Issues

1. Whether the demand notices issued by the Superintendent (Audit) for the periods 2013-14 to 2016-17 are valid, given that audits for these periods had already been conducted by the same authority? 2. Whether subsequent demand notices supersede earlier ones, and if so, which notice is to be considered operative? Petitioner's Contention: The petitioner argued that the demand notices were invalid as audits for the relevant periods had already been completed. They relied on the Gujarat High Court's decision in OWS Warehouse Services LLP –v- Union of India, 2018 (19) G.S.T.L. 27 (Guj.). The petitioner also contended that the notices were contradictory and that only a competent authority could issue a valid notice. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or the opposite parties.