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2022 (1) TMI 997 - HC - GSTScope of SCN - lack of jurisdiction - it is submitted that, passing orders, disposing of the SCNs in a hurry only to pre-empt today's hearing and to present the Court with a fait accompli - wrongful utilization of Input Tax Credit - intent of fraud and willful mistake - contravention of Sections 16, 20, 122, 132 of OGST/CGST Act read with Rule 54 (1A)(a) of the OGST/CGST Rules - HELD THAT - The Deputy Commissioner of State Tax has already dealt with the averments in the writ petition, which are yet to be examined by the High Court, and purportedly negatived them as well as drawing inferences of 'admissions' by the Petitioner. The Court finds this is to be extraordinary. It unmistakably reflects the anxiety of the Officer in question who has issued the SCNs to proceed to dispose them of hurriedly and thus preempt the hearing before this Court - This Court would not like to presume that statutory authorities would be unmindful of their statutory responsibilities of determining every SCN in an objective and impartial manner on the basis of the facts presented before them, addressing all the legal submissions made in response to the SCN. This is what lends legitimacy to the system devised by the statutes under which quasi judicial adjudicatory powers are entrusted to authorities. The Court sets aside the two adjudication orders dated 26th November, 2021 passed by Opposite Party No.4, i.e. for the periods April, 2020 to March, 2021 and April, 2021 to August, 2021 - The Petitioner will file its reply to the two final SCNs issued for the mentioned periods on or before 1st January, 2022. The writ petition is disposed of.
Issues: Challenge to show cause notices alleging wrongful utilization of Input Tax Credit (ITC) in contravention of tax laws; Allegation of passing orders hurriedly to pre-empt court hearing; Request for fresh adjudication of show cause notices.
Analysis: 1. Challenge to Show Cause Notices: The writ petition filed by M/s. JSW Steel Ltd. challenged show cause notices (SCNs) alleging wrongful utilization of Input Tax Credit (ITC) in contravention of Sections 16, 20, 122, 132 of OGST/CGST Act read with Rule 54 (1A)(a) of the OGST/CGST Rules. The Deputy Commissioner of State Tax Enforcement Unit issued these SCNs intentionally by reason of fraud and willful mistake. The petitioner sought relief from the High Court against these allegations. 2. Hastily Passed Orders: The court noted that two separate orders were passed by the Adjudicating Authority just before the scheduled hearing date of the writ petition. The Deputy Commissioner disposed of the SCNs for different periods, allegedly to pre-empt the court hearing and present a fait accompli. The court observed that the officer's actions reflected undue haste and an attempt to influence the ongoing legal proceedings. 3. Fresh Adjudication: The High Court found the actions of the Adjudicating Authority to be extraordinary and reflective of bias. The court set aside the hurriedly passed adjudication orders and directed fresh adjudication of the SCNs. The court emphasized the need for an objective and impartial examination of the facts presented before the authorities, highlighting the importance of addressing all legal submissions in response to the SCNs. 4. Court Directions: The court issued specific directions for the fresh adjudication process. The petitioner was instructed to file replies to the final SCNs within a specified timeline. The Adjudicating Authority was directed to conduct a hearing for the petitioner and pass fresh adjudication orders in accordance with the law. The court also provided a safeguard for the petitioner in case the new orders were adverse, allowing time to seek appropriate remedies. 5. Final Disposition: The High Court clarified that its decision to set aside the previous adjudication orders did not imply any opinion on the merits of the SCNs. The court's observations were focused on the procedural irregularities and the need for a fair and unbiased adjudication process. The writ petition was disposed of in accordance with the directions provided by the court, ensuring a just and transparent resolution of the dispute.
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