2024 (9) TMI 677 - HC - GST

Challenge to SCN and the subsequent adjudication order - jurisdiction of the adjudicating authority to not only initiate proceeding but also to determine the liability of the petitioners by issuing SCN - HELD THAT - Taking into consideration the fact that a jurisdictional issue has been raised and a prima facie case has been made out by the petitioners, and the fact that a coordinate Bench of this Court by an order dated 13th February 2024 in an identical matter in the case of OSL Exclusive Pvt. Ltd. v. Union of India Ors. 2024 (3) TMI 1338 - CALCUTTA HIGH COURT had been pleased to pass a limited interim order, the impugned demand made in the order dated 3rd April 2024 as appearing at annexure P-3 to the writ petition is stayed till the end of September 2024 or until further orders whichever is earlier. List this matter under the heading hearing in the combined monthly list of August 2024.

Summary

Issues:
1. Challenge to show cause notice and adjudication order under WBGST and CGST Act, 2017 for the tax period April 2018 to March 2019.
2. Jurisdiction of the adjudicating authority to initiate proceedings and determine liability.
3. Validity of notifications extending the time limit for issuance of orders under Section 73(9) of the said Act.
4. Invocation of Section 168A of the said Act in relation to force majeure circumstances.
5. Allegation of colorable exercise of power in issuing notifications, show cause notice, and adjudication order.
6. Request for stay of the adjudication order and consequential demand.
7. Requirement for filing affidavits-in-opposition.
8. Granting stay on the impugned demand.
9. Fixing the matter for a hearing in August 2024.

Analysis:
1. The petitioners challenged a show cause notice and an adjudication order under the WBGST and CGST Act, 2017 for the tax period April 2018 to March 2019. They questioned the jurisdiction of the adjudicating authority to initiate proceedings and determine their liability based on the show cause notice issued on 8th December 2023 under Section 73(1) of the said Act. The petitioners contended that the proceedings were initiated beyond the statutory time limit, but the respondents relied on notifications extending the time limit for issuing orders under Section 73(9) of the Act, which was further extended by a subsequent notification dated 28th December 2023.

2. The petitioners argued that the notifications extending the time limit were not valid for initiating fresh proceedings, citing Section 168A of the Act, which allows for the extension of time limits in special circumstances like force majeure. They contended that the notifications could not be relied upon as there was no force majeure prevailing when the show cause notice was issued in 2023. The petitioners claimed that their rights had accrued, and the notifications, show cause notice, and adjudication order were issued in a colorable exercise of power.

3. The State, represented by Mr. Siddiqui, requested the court to allow for the filing of affidavits-in-opposition before deciding the petition. The court granted three weeks for filing the affidavits and an additional two weeks for any replies to be submitted.

4. Considering the jurisdictional issue raised and a prima facie case made out by the petitioners, the court decided to stay the impugned demand from the adjudication order dated 3rd April 2024 until the end of September 2024 or until further orders, citing a similar interim order in another case. The matter was scheduled for a hearing in August 2024.