Upendra Mahato vs. Union Of INDIA And Ors.
Original PDF →Facts
The petitioner, Upendra Mahato, filed a writ petition challenging a show cause notice dated February 18, 2025, issued under Section 122 of the WBGST/CGST Act, 2017, concerning tax periods 2017-18 and 2021-22. The petitioner argued that a final audit report for tax periods 2017-18, 2018-19, and 2019-20 had already been published on January 19, 2023, implying discrepancies were settled. The respondents, represented by Mr. Bhattacharya, clarified that the proceedings were limited to the period 2020-21 and 2021-22, with a corrigendum published on March 19, 2025, to reflect this. The Court noted this clarification.
Held
The Court held that the petitioner's grievance was met because the respondent authorities clarified that the show cause notice was limited to the tax periods 2020-21 and 2021-22, with a corrigendum published on March 19, 2025, to that effect. The Court found that there was no overlap between the periods covered by the final audit report (2017-18, 2018-19, 2019-20) and the revised periods of the show cause notice (2020-21, 2021-22). Therefore, the initial challenge based on the overlap was rendered moot. The reasoning was that the clarification by the revenue effectively addressed the petitioner's concern about being subjected to proceedings for periods already audited and settled. The ratio decidendi is that when a clarification by the revenue rectifies a potential procedural irregularity by narrowing the scope of a notice to periods not previously audited, the petitioner's primary objection is resolved. The writ petition was disposed of based on these observations, with no specific operative directions other than noting the clarification.
Key Issues
1. Whether a show cause notice issued under Section 122 of the WBGST/CGST Act, 2017, is valid when a final audit report for overlapping periods has already been published, treating discrepancies as settled? (Question of law) Petitioner's contention: The petitioner argued that once a final audit report was published, treating the discrepancies as settled for the tax periods 2017-18, 2018-19, and 2019-20, no further show cause notice for the same or overlapping periods could be issued. They relied on the principle that a concluded audit should preclude subsequent proceedings for the same matters. Revenue's contention: The respondent revenue authorities clarified that the show cause notice was limited to the tax periods 2020-21 and 2021-22, and a corrigendum was issued on March 19, 2025, to confine the proceedings to these specific periods, thereby removing any overlap with the previously concluded audit for 2017-18, 2018-19, and 2019-20.
Sections Cited
Section 122
AI-generated summary — verify with the full judgment below
2025 Item No AD 26 Saswata
WPA 5261 of 2025 Upendra Mahato versus Union of India & Ors. Mr. Himangshu Kumar Ray Ms. Shiwani Shaw Mr. Subhasis Podder Mr. Animitra Roy Mr. Gaurav Chakraborty …For the petitioner Mr. Uday Shankar Bhattacharya Mr. Tapan Bhanja …For the respondent nos. 2, 3 and 4 Mr. Kaushik Dey Mr. Kaustuv Kr. Maiti …For the respondent nos. 5 and 6
Affidavit of service filed in Court today is retained with the record.
The writ petition has been filed challenging the show cause notice dated 18th February 2025 in respect of tax period 2017-18 and 2021-22 issued under the provisions of Section 122 of the WBGST /CGST Act, 2017 (hereinafter referred to as the “said Act”) on the ground that the final audit report in form ADT – 2 has already been published on 19th January 2023, in respect of the tax period 2017-18, 2018-19 and 2019-20. Mr. Ray, learned advocate appearing for the petitioner submits that once the final audit report is filed treating the discrepancies to be settled, no further show cause for the above period in respect of the said proceedings could have been issued.
At this stage, Mr. Bhattacharya, learned advocate appearing for the respondent nos. 2 to 4 submits that the above proceedings are limited in respect of the notice period from 2020- 21 and 2021-22 and a corrigendum to that effect has been published on 19th March 2025. 4. Having heard the learned advocates for the parties, since the show cause notice has now been confined to the period from 2020-21 and 2021-22, and there being no overlap of the periods, I am of the view that the petitioner’s grievance has already been met. Let a copy of the summary of show cause in the form of 2 corrigendum to the original show cause dated 18th February 2025 be retained with the record.
With the above observations, the writ petition is disposed of.
All parties shall act on the basis of server copy of this order duly downloaded from this Court’s official website. (Raja Basu Chowdhury, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.