2022 (6) TMI 278 - HC - GST

Jurisdiction of GST officer to issue the impugned show cause notice - Taxable turnover below threshold limit prescribed qua tobacco products or not - seeking refund the amount, that was deposited respondents, although, given the taxable turnover generated by the petitioner, he was not exigible to tax, on the basis of wrong advise - HELD THAT - The petitioner had identified the source from whom he purchased the goods - the taxable turnover of the petitioner was Rs.15 lakhs (approx), which, as noticed, is below the threshold limit of Rs.20,00,000/- fixed for tobacco products - the respondents had no jurisdiction to issue the impugned show cause notice and/or pass the impugned orders. Refund allowed with interest interest @6% (simple) per annum. - the respondents will ensure that the subject premises are de-sealed forthwith. Petition allowed.

Summary

Issues:
Jurisdiction of respondent no. 2 to issue show cause notice.

Analysis:
The writ petition challenged a show cause notice, an Order-in-Original, and an Order-in-Appeal. The primary issue was whether respondent no. 2 had the jurisdiction to issue the impugned show cause notice. The petitioner contended that based on the taxable turnover, he was not liable for tax. The petitioner argued that since his taxable turnover was below the threshold limit for registration under the GST regime, respondent no. 2 lacked the authority to issue the notice or pass the orders. The petitioner's counsel emphasized provisions of the Central Goods and Services Act and Annexure-1 of the show cause notice to support the contention that the taxable turnover was below the prescribed limit.

The respondent contended that the petitioner had been conducting business since June 2018, which was revealed in a voluntary statement made by the petitioner. However, the respondent did not dispute that the threshold taxable turnover for tobacco products under the GST regime was Rs. 20,00,000. The court examined the provisions of the CGST Act defining aggregate turnover and excluded taxes and cesses to determine the taxable turnover generated by the petitioner. The court noted discrepancies in the respondent's arguments and the voluntary statement made by the petitioner regarding the source of goods purchased.

The court found that based on the evidence presented, the taxable turnover of the petitioner was below the threshold limit, concluding that respondent no. 2 lacked jurisdiction to issue the show cause notice and pass the impugned orders. Consequently, the court set aside the show cause notice and orders, directing the refund of the amount deposited by the petitioner with interest. The court also ordered the de-sealing of the petitioner's premises and declined the relief for compensation, providing liberty to seek appropriate remedies as per the law. The writ petition was disposed of accordingly, with directions for the parties to act based on the digitally signed copy of the judgment.