A.Apma Kaja vs. The Deputy State Tax Officer-1

Facts

The petitioner, A.Apma Kaja, challenged an assessment order dated 06.06.2025 passed by the respondent, the Deputy State Tax Officer-1, for the assessment year 2021-2022. The petitioner argued that the show cause notice (SCN) in Form GST DRC-01 was issued under both Section 73(5) and Section 74(5) of the TNGST Act, 2017, which is impermissible. The petitioner contended that a notice should have been issued under either Section 73 or Section 74, not both simultaneously. The respondent's counsel conceded that there was an inadvertent error in mentioning both sections in the SCN but maintained that the tax was levied under Section 73(5) and penalty under Section 75(5).

Held

The Court held that the impugned order was passed without jurisdiction because the show cause notice itself was issued without the authority of law. The Court found that invoking both Section 73 and Section 74 of the TNGST Act, 2017, simultaneously in a single show cause notice is impermissible. The Court reasoned that an officer could only issue a notice under either Section 73 or Section 74, but not both. The subsequent passing of the order by levying tax under Section 73 and imposing penalty under Section 74 was also deemed impermissible. Therefore, the Court concluded that the respondent acted without proper application of mind and authority of law. The ratio decidendi is that a show cause notice must clearly specify the legal provision under which it is issued, and simultaneous invocation of distinct provisions like Section 73 and Section 74 is legally invalid. The Court quashed the impugned order with liberty to the respondent to issue a fresh notice if permissible in law and not barred by limitation.

Key Issues

1. Whether the issuance of a Show Cause Notice under both Section 73(5) and Section 74(5) of the TNGST Act, 2017, simultaneously, is legally permissible? (Question of law) Petitioner's argument: The petitioner contended that issuing a single show cause notice invoking both Section 73 and Section 74 of the Act, using a slash, is impermissible and contrary to law. This procedural defect renders the subsequent order illegal. The petitioner relied on the principle that notices must be issued under specific provisions, not a combination of them. Respondent's argument: The respondent's counsel admitted an inadvertent error in mentioning both sections in the show cause notice but argued that the tax was correctly levied under Section 73(5) and penalty under Section 75(5). The respondent did not present a substantive argument against the petitioner's contention regarding the dual invocation of sections.