2024 (6) TMI 1071 - HC - GST

Short payment of tax - availing excess ITC and utilized the same - initiation of proceedings by issuing intimation under Section 61 of the WBGST Act which is yet to be concluded - pendency of such proceedings can be a bar in issuing the instant show cause notice or not - HELD THAT - It prima facie appears to this court that such issue has been settled as indicated in para 2 of the Audit Report dated 16-04-2021. This court is not unmindful of the well settled preposition of law that the scope of interference at the stage of show cause notice is very limited. However the grounds of challenge to the show cause notice in the case on hand touches upon the jurisdictional issue for which this writ petition is entertained. List this matter under the heading hearing immediately after expiry of the time fixed for exchange of affidavits.

Summary

Issues:
1. Challenge to demand-cum-show cause notice under CGST Act of 2017.
2. Discrepancies in Return for financial year 2018-19 under WBGST Act.
3. Allegations of availing and utilizing ineligible Input Tax Credit.
4. Settlement of the issue as per Audit Report.
5. Simultaneous proceedings by State and Central Tax authorities.
6. Jurisdictional challenge to show cause notice.

Analysis:

1. The petition challenges a demand-cum-show cause notice issued under the CGST Act of 2017. The notice, dated November 3, 2023, by the Assistant Commissioner, CGST & CX Siliguri Division, is the subject of challenge in this writ petition.

2. The petitioners' counsel highlights discrepancies in the Return for the financial year 2018-19 under the WBGST Act. The State Tax authority issued a notice alleging discrepancies detected after scrutiny.

3. The Audit Wing of the Central Tax authority found discrepancies in Input Invoices, Input Tax Credit Ledgers, GSTR-3B, GSTR-9, and payment particulars for 2018-19. Allegations include availing and utilizing ineligible Input Tax Credit.

4. The Audit Report of the Assistant Commissioner of Central Tax noted that the petitioners paid the demanded amount, settling the issue raised in the Audit Observation.

5. The petitioners challenge the show cause notice on grounds of being time-barred, simultaneous proceedings by State and Central Tax authorities, and the reopening of settled issues by the Central Authority.

6. The respondent authorities argue that proceedings by the State Tax authority are pending and do not bar the issuance of the show cause notice. They request time to address the petitioners' objections.

7. The court notes that the issue seems settled as per the Audit Report, but acknowledges the limited scope of interference at the show cause notice stage. The jurisdictional challenge raised warrants consideration in this writ petition.

8. The court orders the filing of affidavits-in-opposition and replies within specified timelines, listing the matter for a hearing immediately after the exchange of affidavits.

9. To prevent the writ petition from becoming infructuous, the court orders a stay on further proceedings related to the show cause notice until a specified date or until further orders.

10. The parties are granted liberty to mention the matter for inclusion post the exchange of affidavits, ensuring due process and fair consideration of the legal issues raised.