M/S Black Stone Works Through Its Partner Namely Ved Prakash Khudania vs. State Of Jharkhand Through The Secretary Deptt Of State Of Tax

Held

The Court held that no prejudice was being caused to the petitioner by responding to the second show-cause notice, especially since the first notice had already been responded to. The Court observed that the second notice pointed out further discrepancies in addition to those in the first notice, necessitating further explanation. Therefore, the Court was of the view that the petitioner needed to explain the alleged discrepancies detailed in the second show-cause notice dated July 3, 2024, for the authority to proceed in accordance with law as mandated by Section 61 of the Act. The Court disposed of the writ petition, granting liberty to the petitioner to submit their explanation to the notice dated July 3, 2024, within two weeks. The authority was directed to consider the explanation in accordance with law and take follow-up action based on their conclusion.

Facts

The petitioner, M/s. Black Stone Works, filed a writ petition challenging two notices issued by the State Tax authorities under Section 61 of the Jharkhand Goods and Service Tax Act, 2017, read with Rule 99(1) of the Jharkhand Goods and Service Tax Rules, 2017. The first notice, dated April 1, 2024 (Annexure-2), pointed out discrepancies between the quantity and value of stone/chips mining and dispatch, and the outward taxable supply declared in GSTR 3B. The petitioner responded to this notice. Subsequently, a second notice, dated July 3, 2024 (Annexure-4), was issued, highlighting further discrepancies related to inward taxable supply and tax amounts at different rates. The petitioner argued that a second notice was unwarranted after a response to the first had been submitted.

Key Issues

1. Whether the issuance of a second notice under Section 61 of the JGST Act, dated July 3, 2024, is permissible when a response to the first notice dated April 1, 2024, has already been submitted by the petitioner? The petitioner contended that the second notice was unnecessary and caused prejudice, as the initial discrepancies had been addressed. The respondents argued that the second notice was justified because it contained a wider scope of scrutiny, including additional calculations and discrepancies identified by the authority. They asserted that the petitioner should file a reply to the second notice for proper consideration and follow-up action as per Section 61 of the Act.