M/S Khyber Industries Private Limited vs. Union Territory Of J And K (Excise And Taxation)

Held

The Court held that the impugned order dated April 27, 2024, passed by the State Taxes Officer, was non-speaking and lacked reasoning for rejecting the petitioner's submissions. The Court found that the petitioner's reply to the show-cause notice, including the audit report prepared under Section 65(6) of the CGST Act, 2017, was not properly considered. The plea regarding the STO's jurisdiction due to parallel proceedings by the central audit authority was also not considered. Consequently, the Court found merit in the petition and quashed the impugned order by a writ of certiorari. The matter was remanded back to the State Taxes Officer to decide afresh after providing an opportunity of being heard to the petitioner and considering their fresh written submissions and documentary evidence within two weeks. The STO was directed to conclude the proceedings within four weeks of receiving the submissions.

Facts

The petitioner, M/s Khyber Industries Private Limited, filed a writ petition challenging an order dated April 27, 2024, passed by the State Taxes Officer (STO), Circle "E" Srinagar. The STO's order was purportedly issued under Section 73 of the J&K GST Act, 2017, raising a demand for tax. The petitioner argued that the STO's order was passed in violation of natural justice and that the STO lacked jurisdiction to initiate parallel proceedings after a central audit authority had already adjudicated the same subject matter for the same financial year. The petitioner also contended that their reply to the show-cause notice, which included an audit report prepared under Section 65(6) of the CGST Act, 2017, was not properly considered.

Key Issues

1. Whether the State Taxes Officer had the jurisdiction to initiate parallel proceedings under Section 73 of the J&K GST Act, 2017, when the central audit authority had already adjudicated the same subject matter for the same financial year? (Question of law). 2. Whether the impugned order dated April 27, 2024, passed by the State Taxes Officer, was passed in violation of the principles of natural justice, specifically regarding the non-consideration of the petitioner's reply and supporting documents? (Question of mixed law and fact). Petitioner's contentions: The petitioner argued that the STO lacked jurisdiction due to parallel proceedings by the central audit authority. They also contended that their reply to the show-cause notice, including the audit report under Section 65(6) of the CGST Act, 2017, was not considered, rendering the order non-speaking and in violation of natural justice. Revenue's contentions: The judgment records no specific arguments made by the respondent (Union Territory of J and K).