The Calcutta High Court stated that, before sending a show cause notice regarding a tax issue under the Goods and Services Tax Act (GST) of 2017, officials must first consider the individual’s pre-show cause notice (SCN) reply.
It was discovered by the court that the SCN is a replica of the data provided before and all that the assessing officer has mentioned is that the response filed via the appellants in answer to the intimation is not discovered to be adequate and therefore not considerable.
U/s 74(1) of the CGST Act, 2017 SCN has been issued and the W.B.G.S.T. Act, 2017 read with Rule 142(1)(a) of the Rules for the fiscal year 2023–2024 was challenged by Jyoti Tar Products Private Limited, the petitioners. Several decisions were mentioned to buttress the view of the single bench that the writ petition is not carried against the SCN.
It was claimed by the applicant that the appellants obtained an indication of tax determined to be payable u/s 74(5) after issuing the show-cause notice.
In the notification, the information was furnished which asserted that the appellants had claimed the input tax credit for the purported inward supply of goods from non-existent companies whose registrations had been revoked. It was expressed under the notification that they shall be within SCN u/s 73(1) and 74(1) if they do not file the tax that was determined.
Along with furnishing a thorough elaboration, the appellants have included certain related documentation and mentioned several rulings of the court. Hence the authority is mandated to consider the response where it deems it relevant to practice its authority u/s 74(5) before deciding whether to issue a show-cause notice u/s 74(1) of the Act.
It was observed by the bench consisting of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya that the department would be required to consider the reply on July 18, 2024, to the previous notification, address those concerns, and thereafter proceed with issuing an SCN.
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It was discovered by the court that the SCN was a duplicate of the earlier notification, and the assessing officer’s mere statement was that the appellant’s answer to the notification was considered insufficient and hence unacceptable.
The SCN does not address any claim incurred via the appellants in answer to the intimation on July 18, 2024, and the left part of the notice has been reproduced from the earlier intimation.
The show cause notice (SCN) furnished u/s 74(1) has been quashed by the court and remanded the case back to the assessing authority to regard the response and if it still discovers it to be unsatisfactory then it will be open to the authority to move as per the regulation.
| Case Title | M/s Jyoti Tar Products Private Limited vs. The Deputy Commissioner |
| Citation | M.A.T. 2291 of 2024 With IA No. CAN 1 of 2024 |
| Date | 21.01.2025 |
| For the Appellants | Mr. Ankit Kanodia, Ms. Megha Agarwal, and Mr. Piyush Khaitan |
| Counsel For Respondent | Mr. A. Ray, Ld. G.P., Md. T. M. Siddique, Mr. N. Chatterjee, Mr. T. Chakraborty |
| Calcutta High Court | Read Order |
