Ms Satyam Enterprises Through Its One Of The Partner Sri Prakash Kumar Vishwakarma vs. The State Of Jharkhand

Facts

The petitioner, M/s Satyam Enterprises, challenged a show cause notice dated July 31, 2020, issued under Section 73(1) and Rule 142(1) of the GST Act by the State Tax Officer, Bokaro Circle, Bokaro. The petitioner argued that the notice pre-judged the issue and fixed liability. Subsequently, an ex-parte order dated September 28, 2020, was passed by the Assistant Commissioner of State Taxes, Bokaro Circle, Bokaro, under Section 73(9) of the Jharkhand GST Act. This order directed the petitioner to reverse Input Tax Credit (ITC) availed, raising a demand of Rs. 5,37,083.80 towards tax, interest, and penalty. The petitioner contended that the order was passed without proper application of mind and failed to consider their explanation regarding the rightful availment of ITC, supported by invoices and GST returns, and the supplier's registration status.

Held

The Court did not enter into the merits of the contentions raised by either party. The petitioner, in light of the respondents' submission regarding the availability of an alternative statutory remedy of appeal, sought permission to withdraw the writ petition to avail that remedy. Consequently, the writ petition was dismissed as withdrawn. The Court explicitly stated that it had not adjudicated on the merits of the arguments presented by the petitioner or the respondents. It clarified that the petitioner was free to pursue the alternative remedy of appeal as provided under the law. Therefore, no specific finding was given on the validity of the show cause notice or the ex-parte order, nor was any principle established for future citation.

Key Issues

1. Whether the show cause notice dated 31.07.2020, issued under Section 73(1) and Rule 142(1) of the GST Act, is liable to be quashed for pre-judging the issue and fixing liability before proper adjudication? 2. Whether the ex-parte order dated 28.09.2020, passed under Section 73(9) of the Jharkhand GST Act, is liable to be quashed for being passed without proper application of mind and without considering the petitioner's explanation regarding the availment of Input Tax Credit? Petitioner's Arguments: The petitioner argued that the show cause notice itself indicated a pre-determined conclusion and that the subsequent ex-parte order failed to consider their detailed explanation and supporting documents regarding the rightful availment of ITC. They contended that the writ petition was maintainable as the order suffered from a lack of proper application of mind and was passed without considering their defense. Respondents' Arguments: The respondents contended that the ITC was disallowed based on specific provisions of Section 16(2)(c) of the JGST Act, as it was availed against goods received from a non-existent dealer. They asserted that the Assessing Authority passed a reasoned order after proper application of mind. Crucially, the respondents raised a preliminary objection regarding the maintainability of the writ petition, citing the availability of an alternative remedy of appeal under Section 107 of the JGST Act, and relied on the Supreme Court's judgment in Assistant Commissioner of State Tax and others Vrs. Commercial Steel Limited.