M/S J.K.M. Infra Projects Limited, A Company Registered Under The Companies Act vs. Union Of INDIA Through The Secretary (Revenue), Ministry Of Finance

Facts

The petitioner, M/s J.K.M. Infra Projects Limited, filed a writ petition before the Patna High Court challenging a show cause notice dated February 10, 2020, issued under Section 73 of the GST Act for the tax period February 2019. They also challenged an order dated March 12, 2020, and a demand notice dated March 17, 2020. The petitioner contended that these actions were taken without initiating any adjudication proceedings or determining the tax liability, rendering them illegal and in violation of natural justice. The revenue authorities were the respondents. The specific amount in dispute was not explicitly stated in the provided text.

Held

The Court did not decide the merits of the case. Instead, the petitioner, under instructions, sought permission to prefer an appeal against the impugned order before the Appellate Authority. The Court granted this permission. The revenue authorities agreed not to raise the issue of limitation if the appeal was filed within four weeks from the date of the order. The Court directed that the petitioner be permitted to prefer an appeal within four weeks, possibly through digital mode. The appellate authority was directed to decide the appeal on merits, in compliance with the principles of natural justice, within eight weeks of the appeal being filed. The Court explicitly stated that it had not expressed any opinion on the merits of the case, and all issues were left open. Liberty was reserved for the parties to take recourse to other remedies and for the petitioner to challenge the order if required.

Key Issues

1. Whether the show cause notice dated 10.02.2020, the order dated 12.03.2020, and the demand notice dated 17.03.2020 are liable to be quashed on the ground that they were issued without initiating any adjudication proceeding, thereby violating principles of natural justice, as per Section 73 of the GST Act? Petitioner's Argument: The petitioner argued that the entire proceeding, including the show cause notice, order, and demand notice, is without jurisdiction, illegal, arbitrary, and a blatant violation of the principles of natural justice because no adjudication proceeding was initiated to determine the tax liability. They sought a declaration that no tax, interest, or penalty could be levied without such initiation. Revenue's Argument: The judgment records that the petitioner, under instructions, sought permission to prefer an appeal against the impugned order before the Appellate Authority. The Standing Counsel for the State indicated that if an appeal is preferred within four weeks, the issue of limitation would not be raised. No specific arguments were recorded for the revenue regarding the merits of the petitioner's challenge to the show cause notice and subsequent orders.