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2024 (2) TMI 235 - HC - GSTValidity of SCN - vague SCN - notice has been issued under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act), though the ingredients for initiation of the proceedings i.e. suppression is not made out - Violation of principles of natural justice - HELD THAT - In the present case, in view of the submissions advanced as also the admitted position that the limitation period for notice under Section 73 did not expire on the date the impugned notice was issued, the question of extended period of limitation for issuance of notice under Section 74 is not involved. Had it been, the contention of the learned counsel for the petitioner that the period of limitation for issuance of notice under Section 73 had expired but any such notice was not issued and consequently to overcome the bar of limitation, the notice was issued under Section 74 even without satisfying the requirements of Section 74 the consideration might have been different. In Vijaya Venkata Durga Oil Traders v. Commercial Tax Officer 2014 (12) TMI 910 - ANDHRA PRADESH HIGH COURT , the Division Bench of High Court of Judicature at Hyderabad considered the judgment in M/S. UNIWORTH TEXTILES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE. RAIPUR 2013 (1) TMI 616 - SUPREME COURT . It was held that if the allegations in the show cause notice accepted as true show that the dealer had committed willful evasion of tax and the finding recorded in the assessment order establish that the assessee had willfully evaded tax, it would suffice to extended period of limitation in terms of Section 21(5) of APVAT Act, 2005 notwithstanding that the show-cause notice did not refer to Section 21(5) and did not specifically use the words wilful evasion of tax . It was further held that it was, therefore, necessary to refer to the contents of show cause notice. In the present case it is found that the show cause notice mentioned the grounds for its issuance. Even if it be taken that the suppression is not mentioned, to meet the requirement of Section 74 to issue the notice. It is not the submission of the learned counsel for the petitioner that it does not meet the requirements of Section 73. Further the submission is that the notice should be under Section 73 but it mentions under Section 74 - mere mention of a provision would not be determinative of the notice under that section. It dependents upon the contents. Petition dismissed.
Issues Involved:
1. Challenge to the show-cause notice under Section 74 of the CGST Act. 2. Jurisdiction and limitation of the notice. 3. Grounds for issuance of the show-cause notice. 4. Applicability of writ jurisdiction under Article 226 of the Constitution of India. Summary: 1. Challenge to the Show-Cause Notice under Section 74 of the CGST Act: The petitioner challenged the proceedings for the assessment of tax for the tax period 2017-18 initiated via a show-cause notice dated 21.09.2023 under Section 74 of the CGST Act. The primary contention was that the notice lacked the necessary ingredients for initiation, specifically the aspect of 'suppression'. The petitioner argued that the notice should have been issued under Section 73 instead of Section 74. 2. Jurisdiction and Limitation of the Notice: The petitioner claimed the notice was barred by limitation and without jurisdiction. However, during arguments, it was conceded that the notice was within the period of limitation of three years under Section 73. The court noted that even if the notice was issued under Section 74, it would still be within the limitation period under Section 73, thus not barred by limitation. 3. Grounds for Issuance of the Show-Cause Notice: The court examined the show-cause notice and found it contained sufficient grounds for its issuance, including the taxpayer's ineligibility to transition the credit of duty paid on inputs lying in stock as on 30.06.2017, contraventions of Section 59 of the CGST Act, and non-declaration of facts with an intention to avail transition credit fraudulently. The court held that the question of whether there was 'suppression' or not could be determined by the authority after considering the petitioner's reply. 4. Applicability of Writ Jurisdiction under Article 226 of the Constitution of India: The court referenced precedents, emphasizing that writ petitions should not be entertained against mere issuance of show-cause notices unless the notice was totally non est in the eye of the law for absolute want of jurisdiction. The court held that the petitioner should respond to the show-cause notice and raise all objections before the authority. The writ petition was dismissed, leaving it open for the petitioner to file a reply and raise objections as per law. Conclusion: The writ petition challenging the show-cause notice under Section 74 of the CGST Act was dismissed. The court held that the notice was not barred by limitation and contained sufficient grounds for its issuance. The petitioner was advised to respond to the notice and raise objections before the competent authority.
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