M/S Jindal Stone Works Through Its Proprietor Namely Kanhaiya Kumar Khudania vs. State Of Jharkhand Through The Secretary Deptt Of State Tax

Held

The Court held that no prejudice was being caused to the petitioner in responding to the second show-cause notice, as a response to the first notice had already been furnished. The Court found that the second notice pointed out further discrepancies, necessitating further explanation. Therefore, the Court was of the view that the petitioner needed to explain the alleged discrepancies furnished in the second show-cause notice dated 05.07.2024 for the authority to proceed in accordance with law as per Section 61 of the JGST Act. The ratio decidendi is that a subsequent notice under Section 61 seeking further clarification on discrepancies, even after a response to an initial notice, is permissible if it addresses wider or further identified issues, and the petitioner is not unduly prejudiced by responding to it. The Court disposed of the writ petition, granting liberty to the petitioner to explain the reasons sought in the notice dated 05.07.2024 within two weeks, and directed the authority to consider the same in accordance with law and take follow-up action.

Facts

The petitioner, M/s. Jindal Stone Works, filed a writ petition before the Jharkhand High Court challenging two notices issued by the State Tax authorities. The first notice, dated 02.04.2024 (Form GST ASMT 10), was issued under Section 61 of the Jharkhand Goods and Services Tax Act, 2017, for scrutiny of returns. The petitioner responded to this notice. Subsequently, a second notice, dated 05.07.2024, was issued under Section 61 of the JGST Act read with Rule 99(1) of the JGST Rules, also seeking explanation for discrepancies. The petitioner argued that the second notice was issued without jurisdiction and in excess of the authority's power, especially since a response to the first notice had already been provided.

Key Issues

1. Whether the issuance of the second notice dated 05.07.2024 under Section 61 of the JGST Act, after a response to the first notice dated 02.04.2024 was submitted, is without jurisdiction and in excess of the powers conferred upon the authority regarding scrutiny of returns? Petitioner's contention: The petitioner argued that there was no occasion for the Assessing Officer to issue a second notice when the first notice had already been responded to. This argument was based on the provisions of Section 61 of the JGST Act. Respondents' contention: The State submitted that the second notice was wider in scope as it contained a more comprehensive calculation of discrepancies. They contended that the petitioner should file a reply to the second notice for its consideration and follow-up action in accordance with the statutory provisions of Section 61 of the Act.