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Issues: (i) Whether the show cause notices and adjudication orders under the Jharkhand Goods and Services Tax Act could be sustained when the supporting documents and transactions of the assessee were found genuine and the proceedings against the suppliers had been set aside and remitted for fresh consideration. (ii) Whether the matter required interference on the ground of violation of natural justice and restoration of the proceedings from the stage of show cause notice.
Issue (i): Whether the show cause notices and adjudication orders under the Jharkhand Goods and Services Tax Act could be sustained when the supporting documents and transactions of the assessee were found genuine and the proceedings against the suppliers had been set aside and remitted for fresh consideration.
Analysis: The proceedings were founded mainly on the assessee's transactions with suppliers against whom allegations of fraudulent passing on of input tax credit were made. At the same time, the adjudicating authority recorded that the invoices, e-way bills and measurement slips produced by the assessee were verified and found genuine. The earlier proceedings against the suppliers had already been interfered with and sent back for fresh adjudication. In that situation, the sole basis for fastening liability on the assessee was not treated as surviving in its existing form.
Conclusion: The impugned show cause notices, adjudication orders and demand summaries could not be sustained in their present form and were set aside.
Issue (ii): Whether the matter required interference on the ground of violation of natural justice and restoration of the proceedings from the stage of show cause notice.
Analysis: The Court noted that the assessee had complained of non-supply of relied upon material and lack of effective opportunity. Without entering into the merits finally, the Court found it appropriate to restore the matter so that the revenue could proceed afresh from the notice stage after following the requirements of natural justice and considering the relevant legal position.
Conclusion: The matter was remitted to the adjudicating authority to proceed afresh from the stage of show cause notice after following natural justice.
Final Conclusion: The assessee obtained relief against the impugned GST proceedings, but the revenue was left free to initiate fresh adjudication in accordance with law from the notice stage.
Ratio Decidendi: Where the foundation of a GST demand depends on transactions with suppliers whose own proceedings have been set aside for fresh consideration, and the assessee's supporting documents are found genuine, the demand cannot be sustained in its existing form and the matter may be restored for fresh adjudication after observance of natural justice.
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