2023 (6) TMI 633 - HC - GST

Validity of Show Cause Notice - Relied upon documents (RUD) - Non supply of RUD sought by Petitioner - Reason to believe for raising demand - Levy of GST - mining lease and/or royalty paid to the State Government - works contract services by way of construction of roads and bridges of Government bodies - HELD THAT - In this case, the demand of GST on the petitioner is not only based on levy of GST on mining lease and/or royalty paid to the State Government which is the subject matter of decision by a larger Bench of the Supreme Court of India, but the demand is also based on other claims. Therefore, before issuance of notice in the matter, the Court is inclined to examine the records relating to show-cause notice for the purpose of examining whether reasons to believe exists or it is a mere pretence - the respondent no. 4 is directed to produce the records relating to show-cause notice dated 16.09.2022 (Annexure-A). The learned standing counsel for the petitioner shall send a downloaded copy of this order to the respondent no. 4 so as to enable him to send the relevant record for the perusal of the Court. List on 19.06.2023.

Summary

Issues involved:
The legality and validity of the show-cause notice dated 16.09.2022 and the letter dated 20.01.2023 issued by the Deputy Director, Directorate of GST & Service Tax Intelligence, Guwahati Zonal Unit are challenged.

Details of the Judgment:

Issue 1: Allegations in the Show Cause Notice
The petitioner is engaged in works contract services and extraction of sand, stone, gravel. Allegations include undeclared taxable income, non-payment of tax on machinery rental income, GST on royalty paid to the Forest Department, and tax on mis-match of data comparing GSTR-2A with monthly ITC availed in GSTR-3B.

Issue 2: Proceedings by GST Authorities
Upon notice being issued, the petitioner produced books of accounts. Initially, proceedings were under Section 67 and 70 of the GST Act, later proceeded as an "audit" under Section 65 of the GST Act.

Issue 3: Legal Precedents
The issue of levy of GST on mining lease and royalty paid to the State Government is under consideration by the Supreme Court. Various court orders cited by the petitioner in support of this argument.

Issue 4: Demand of GST and Disclosure
The demand of GST on the petitioner is based not only on mining lease and royalty but also on other claims. The court directs the respondent to produce records relating to the show-cause notice for examination of the "reasons to believe."

Conclusion:
The Court orders the respondent to produce the records for examination, without providing copies to the petitioner. Proceedings are deferred until the next listing date on 19.06.2023.