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2021 (2) TMI 1124 - HC - GSTNotice/summons issued by the Central Tax Authority whereas adjudication u/s 74 had been made by the State Authority - contention is that once the Central Tax Authority had initiated action, the proceeding was required to be brought to its logical end by the same authority - HELD THAT - It appears from the perusal of the order dated 8th September, 2020 that the show cause notice had been served under Section 74(2) of the Act and the date was fixed for submitting explanation/objections by the petitioner. The order impugned dated 8th September, 2020 records that the petitioner did not appear before the proper Officer - As the proceedings for determination and levy of tax and penalty had been initiated by the State Tax Authority, this Court does not find substance in the challenge to the jurisdiction of respondent no. 2 to pass order for determination of tax and penalty to levy the same upon the petitioner, in view of the circular dated 5.10.2018. In the considered opinion of the Court, the initiation of the proceeding for imposition of tax and penalty was with the issuance of the notice under Section 74 as contained in Chapter XV of UPGST Act and the inquiry under Section 70 of the Act was independent - It goes without saying that all issues being raised by the petitioner herein including the issue of non-service of notice before passing the order under Section 74 of the Act shall have to be adjudicated by the appellate authority without being influenced by any of the observations made. Petition dismissed.
Issues: Challenge to order under Section 74 of UPGST Act, 2017 based on circular dated 5.10.2018; Lack of opportunity during proceedings; Jurisdiction of State Tax Authority to pass order for tax and penalty determination.
Analysis: - The challenge in this case is against the order dated 8.9.2020 passed by the Deputy Commissioner under Section 74 of the U.P. Goods and Services Tax Act, 2017, which is similar to Section 74 of the Central Goods and Services Tax Act, 2017. The challenge is based on a circular dated 5.10.2018 issued by the Central Board of Excise and Customs, which discusses enforcement actions by Central and State tax officers. The petitioner argues that the State Tax Authority could not have conducted the proceeding under Section 74 of the UPGST Act, 2017, after the Central Tax Authority initiated the action, citing para '4' of the circular to support the argument. - The petitioner contends that the order passed under Section 74 of UPGST Act did not provide a reasonable opportunity for the petitioner to be heard. The order was passed ex parte during the peak period of the Covid-19 pandemic. The petitioner's father was hospitalized during this time, and documents showing hospitalization and subsequent death were presented to highlight the violation of providing a reasonable opportunity for a hearing to the assessee. - The respondent no. 2 defends the action taken and argues that the petitioner has the option of appealing under Section 107 of the UPGST Act, 2017, as the first appeal against the Assessing Officer's order. The court, after reviewing the summons dated 30.10.2018 and the order dated 8.9.2020, found that the summons initiated an inquiry under Section 70 of the CGST Act, 2017, while the order under Section 74 of the UPGST Act, 2017, was for determining tax and penalty. - The court concluded that the initiation of proceedings for tax and penalty determination by the State Tax Authority was valid, and the challenge to its jurisdiction based on the circular dated 5.10.2018 lacked substance. The court emphasized that the inquiry under Section 70 was separate from the proceeding under Section 74. The petitioner was advised to address the lack of opportunity issue through an appeal under Section 107, as it requires a factual inquiry. - The court dismissed the writ petition, rejecting the prayer to quash the Deputy Commissioner's order dated 8.9.2020. It was emphasized that all issues raised by the petitioner, including the lack of notice before the order under Section 74, should be addressed by the appellate authority without being influenced by the court's observations. This detailed analysis covers the issues raised in the legal judgment comprehensively, addressing the challenges, arguments, and the court's conclusions regarding the order under Section 74 of the UPGST Act, 2017.
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