M/S. A.K. Enterprises vs. Deputy Commissioner Of State Tax, Howrah Zone And Ors.
Original PDF →Facts
The petitioner, M/s. A. K. Enterprises, challenged an order passed under Section 74 of the CGST/WBGST Act, 2017, dated December 31, 2023, concerning the tax period July 2017 to March 2018. The petitioner argued that a notice issued by a superior officer, the Joint Commissioner, under Section 151 of the Act on April 22, 2021, precluded the Deputy Commissioner from issuing a show cause notice in Form GSTDRC-01 on September 29, 2023. The petitioner contended this was a jurisdictional issue that was not addressed in the impugned order. The State argued that the Joint Commissioner's notice was merely for information under Section 151 and did not constitute a determination, thus not preventing the Deputy Commissioner from initiating proceedings under Section 74. The State also raised the issue of the writ petition being filed belatedly.
Held
The Court held that there was no jurisdictional issue preventing the Deputy Commissioner from issuing the show cause notice under Section 74, despite the Joint Commissioner having previously called for information under Section 151. The Court reasoned that the Section 151 notice was for information gathering and did not preclude the Deputy Commissioner from initiating adjudication proceedings under Section 74. The Court also noted that while the petitioner had raised the jurisdictional issue in their response, the impugned order did not deal with it. However, the Court found from the petitioner's response dated December 31, 2023, that the petitioner had not questioned the jurisdiction to issue the notice under Section 74. Additionally, the Court observed that the writ petition was filed belatedly on July 3, 2024, with no explanation provided by the petitioner for the delay. Consequently, on the ground of the belated filing, the Court found no reason to interfere. The Court clarified that the order would not prevent the petitioner from filing an appropriate appeal as per law.
Key Issues
1. Whether the issuance of a show cause notice by the Deputy Commissioner under Section 74 of the CGST/WBGST Act, 2017, is vitiated by a jurisdictional error, given that a superior officer (Joint Commissioner) had previously issued a notice under Section 151 of the said Act for the same tax period. 2. Whether the ingredients for invoking Section 74 of the said Act were present, and if the adjudication made under Section 74(9) is sustainable on this ground. Petitioner's Arguments: The petitioner argued that the initial notice from the Joint Commissioner under Section 151 was a superior officer's proceeding, which meant the Deputy Commissioner lacked the jurisdiction to issue a subsequent show cause notice under Section 74. This jurisdictional issue was raised but not dealt with by the proper officer, rendering the order perverse. Furthermore, the petitioner contended that the necessary conditions for invoking Section 74 were absent, invalidating the adjudication under Section 74(9). State's Arguments: The State contended that the Joint Commissioner's notice under Section 151 was solely for seeking information, as permitted by the section, and did not involve any determination. Therefore, it did not create a jurisdictional impediment for the Deputy Commissioner to initiate proceedings under Section 74. The State also argued that the writ petition was filed belatedly without explanation.
Sections Cited
Section 74, Section 151, Section 74(9)
AI-generated summary — verify with the full judgment below
M/L 171 27.08.2024 sb Ct 5
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE
WPA 17085 of 2024
M/s. A. K. Enterprises Versus The Deputy Commissioner of State Tax, Howrah Zone, Bureau of Investigation & Ors.
Mr. Debasish Ghosh
Mr. B. Sengupta
… For the petitioner.
Mr. Anirban Ray, Ld.GP
Mr. T. M. Siddiqui
Mr. Tanoy Chakraborty
Mr. Saptak Sanyal
… For the State.
Challenging, inter alia, the order passed under Section 74 of the CGST/WBGST Act, 2017 (hereinafter referred to as the “said Act”) dated 31st December, 2023, for the tax period July, 2017 to March, 2018, the present writ petition has been filed.
Mr. Ghosh, learned advocate appearing on behalf of the petitioner by drawing attention of this Court to the notice issued under Section 151 of the said Act dated 22nd April, 2021, would submit that in the instant case, a superior officer, namely, Joint Commissioner had initiated a proceeding. Having regard to the same, no show cause notice could have been issued in Form GSTDRC-01 dated 29th
2 September, 2023 by the Deputy Commissioner. He would submit that the above issue is a juri ictional issue and the same was raised by the petitioner while filing the response to the show cause dated 31st December, 2023. Such issue has not been dealt with by the proper officer at all. It is submitted that on such ground the order passed by the appellate authority can be said to be perverse.
It is then submitted that there are no ingredients for invocation of Section 74 of the said Act and the adjudication made under Section 74(9) of the said Act on such ground must fail.
Mr. Siddiqui, learned Additional Government Pleader enters appearance on behalf of the State respondents. He would submit that the information sought for by the Joint Commissioner was under Section 151 of the said Act. By referring to the provisions of the said Section it is submitted that the Commissioner or any officer as authorized by the Commissioner may direct any person to furnish information relating to any matter dealt with in connection with the Act.
Having regard to the above, it is submitted that there is no irregularity on the part of the Joint Commissioner seeking for information from the
3 petitioner.
The proceeding initiated under Section 74 of the said Act by issuing a show cause notice in Form GSTDRC-01 dated 29th September, 2023 by the Deputy Commissioner does not suffer from any juri ictional error. No determination had been made by the Joint Commissioner. Further the writ petition has been filed belatedly, as such, no interference is called for.
Heard the learned advocates appearing for the respective parties and considered the materials on record. Admittedly, in this case, it appears that a notice was issued on 22nd April, 2021 by the Joint Commissioner under Section 151 of the said Act. Such notice was obviously in connection with the information sought for by the Joint Commissioner. Subsequently, a show cause notice dated 29th September, 2023 for the tax period July, 2017 to March 2018 was issued by the Deputy Commissioner in Form GSTDRC-01. In my view, there was no impediment on the part of the Deputy Commissioner in issuing such show cause despite the Joint Commissioner calling for information under Section 151 of the said Act. Records reveal, though belatedly, the petitioner had filed a response
4 to the show cause and had questioned the juri iction of the Deputy Commissioner to proceed in the matter. Although, the order passed under Section 74 of the said Act does not deal with such issue or with the contention raised, I am of the view that having regard to the nature of the case made out by the petitioner, there is no juri ictional issue involved and simply because the Joint Commissioner had called for certain information under Section 151 of the said Act, the same did not preclude the Deputy Commissioner from initiating the proceeding under Section 74 of the said Act. Independent of the above, although Mr. Ghosh has strenuously argued that the very juri iction to issue a notice under Section 74 of the said Act is absent in the said show cause, however, I find from the response filed by the petitioner on 31st December, 2023, to the aforesaid show cause that the petitioner had not questioned the same. Admittedly, in this case, a determination had been made under Section 74(9) of the said Act on 31st December, 2023. The present writ petition has been filed on 3rd July, 2024. There appears to be no explanation by the petitioner for filing such belated writ petition. On the aforesaid ground, I am of the view that no interference is called for.
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The aforesaid order shall not stand in the way of the petitioner’s right to file an appropriate appeal in accordance with law, if so advised.
With the above observations and directions, the writ petition is disposed of. Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities.
(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.