Ram Kishan Agarwal Proprietor Of M/S Usha Steels vs. Superintendent Of Central Tax, Gr-5, Circle-I, Kolkata Audit Ii Commissionerate And Ors.
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The petitioner, Ram Kishan Agarwal, challenged two show cause notices and subsequent adjudication orders issued under the WBGST/CGST Act, 2017. The first show cause notice, dated June 14, 2024, and adjudication orders dated January 21, 2025, pertained to financial years 2017-18 to 2021-22. The second show cause notice, dated July 19, 2024, and orders dated February 4, 2025, related to the tax periods 2017-18 to 2019-20. The petitioner argued that the show cause notices were issued without a valid basis for invoking the extended period under Section 74 of the Act, rendering the consequential orders invalid. The revenue authorities contended that specific reasons for invoking the extended period were provided in the notices, citing the petitioner's conscious decision not to declare tax liability under RCM and mis-statement/suppression of facts.
Held
The Court held that the writ petition was not the appropriate forum to challenge the adjudication orders when an alternative remedy in the form of an appeal was available. The Court noted that the show cause notices, dated June 14, 2024, and July 19, 2024, contained specific reasons for invoking the extended period under Section 74 of the said Act. For the notice dated June 14, 2024, it was stated that the taxpayer had taken a conscious decision not to declare tax liability under RCM with a purpose. For the notice dated July 19, 2024, elaborate statements regarding suppression of facts and mis-statement by the petitioner were provided. Consequently, the Court dismissed the writ petition. However, the dismissal was without prejudice to the petitioner's right to approach the appellate authority. The Court directed that if the petitioner filed appeals within four weeks, the appellate authority should hear them on merits, subject to compliance with other formalities.
Key Issues
1. Whether the show cause notices issued under Section 74 of the WBGST/CGST Act, 2017, were sustainable, specifically concerning the invocation of the extended period. 2. Whether the adjudication orders passed under Section 74 of the said Act were valid, given the alleged infirmities in the show cause notices. The petitioner argued that the show cause notices lacked a proper basis for invoking the extended period under Section 74 of the said Act, and therefore, the consequential adjudication orders were also invalid. The revenue authorities contended that the show cause notices provided specific reasons for invoking the extended period, including the petitioner's conscious decision not to declare tax liability under RCM and instances of suppression of facts and mis-statement by the petitioner. The revenue authorities did not explicitly cite any specific circulars or precedents in the provided text.
Sections Cited
Section 74
AI-generated summary — verify with the full judgment below
20 04.08.2025 sb Ct 5
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE
WPA 5199 of 2025
Ram Kishan Agarwal Versus Superintendent of Central Tax, Group-5, Circle-1, Kolkata Audit-II Commissionerate & Ors.
Mr. Rites Goel
Mr. S. Chakraborty
… For the petitioner.
Mr. Bhaskar Prosad Banerjee
Mr. Abhradip Maity
… For the CGST authorities.
Mr. Amitabrata Roy, Ld. GP
Mr. Nilotpal Chatterjee
Mr. Tanoy Chakraborty
Mr. Saptak Sanyal
… For the State.
The instant writ petition has been filed not only challenging the show cause notice issued under Section 74 of the WBGST/CGST Act, 2017, (hereinafter referred to as the “said Act”) dated 14th June, 2024 for the financial years 2017-18 to 2021-22 but also the adjudication orders dated 21st January, 2025 passed under Section 74 of the said Act for the tax period 2017-18 to 2021-22 and the show cause notice dated 19th July, 2024 for the tax period 2017-18 to 2019-20 and the orders dated 4th February, 2025. 2. Mr. Goel, learned advocate appearing in support of
2 the writ petition at the very outset would submit that since the show-cause notices have been issued without there being any basis for invoking the extended period under the provisions of Section 74 of the said Act, the show-cause notices cannot be sustained. Since the show cause notices are bad, the consequential orders are also bad.
Having heard the learned advocates appearing for the respective parties, I find that in paragraph 4 of the show cause dated 14th June, 2024 specific reasons have been provided for invoking the extended period wherein it has been categorically noted that the tax payer had taken a conscious decision not to declare such tax liability under RCM with a purpose, and having regard thereto, the extended period was invoked. Insofar as the subsequent notice dated 19th July, 2024 is concerned I find in paragraph 3.1 of the show-cause that elaborate statement has been provided as regards suppression of facts and mis-statement made by the petitioner. Already adjudication orders have been passed. I am of the view, in a writ petition under Article 226 of the Constitution of India it shall not be proper to decide on a challenge to the adjudication orders when alternative remedy in the form of appeal is available.
The writ petition accordingly stands dismissed without any order as to costs.
3
Dismissal of the aforesaid petition shall not, however, stand on the way of the petitioner to approach the appellate authority. If the petitioner files appeals arising out of the orders impugned within a period of four weeks from date, the appellate authority shall having regard to the observation made herein hear out the appeal on merits, subject to compliance of other formalities by the petitioner.
(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.