2024 (2) TMI 850 - HC - GST

Tax Authority's Notice Quashed: Insufficient Evidence Invalidates Rs. 191 Crore GST Demand for 2018-2019 Period

Glaxosmithkline Consumer Health Care Ltd. Versus Deputy Commissioner (State Tax)

The HC quashed a Show Cause Notice under GST Act for tax period April 2018 to March 2019, demanding Rs. 1,91,68,79,244. The notice was set aside due to ... Validity of SCN issued u/s 73 of the CGST Act, 2017, for the tax period April, 2018 to March, 2019 to the extent of confirming demand along with interest and penalty - Similar SCN struck off earlier - HELD THAT:- Surprisingly, in spite of the earlier show cause notice dated 29.09.2023, being struck down by this Court by the aforesaid order as early as on 19.12.2023 which was a by-party order passed in the presence of the learned counsel for the Department as well, the respondent authorities have now passed a fresh show cause notice for the subsequent year, where, prima facie, it appears that the authorities concerned have not considered the judgment rendered by this Court on 19.12.2023 on identical set of facts in respect of the very same assessee. This appears to be somewhat strange on the part of the respondent authorities. What is also surprising to be taken note is the fact that the petitioner herein had already provided all necessary information available with them in respect of the manufacture of various products, different rate of taxes applicable on each of the products and also the details of the supply made by the petitioner to their suppliers. In spite of this information being within the knowledge of the respondent authorities, yet without any further preliminary investigation, enquiry or scrutiny being done at their level, the respondents have issued yet another vague notice bereft of details. The writ petition allowed on the same terms in which the earlier writ petition of the petitioner was passed and decided reserving the right of the respondent authorities, if permissible under law to take appropriate recourse in accordance with law. Issues:The judgment involves a challenge to a Show Cause Notice issued under Section 73 of the Central Goods and Services Tax Act, 2017 for the tax period April, 2018 to March, 2019, confirming a demand of Rs. 1,91,68,79,244/- along with interest and penalty.Issue 1: Challenge to Show Cause NoticeThe petitioner filed a repeated writ petition challenging the Show Cause Notice dated 24.12.2023 issued under Section 73 of the Central Goods and Services Tax Act, 2017 for the tax period April, 2018 to March, 2019. The notice confirmed a demand of Rs. 1,91,68,79,244/- along with interest and penalty. It was noted that a previous Show Cause Notice issued to the petitioner for the tax period July, 2017 to March, 2018 had been struck down by the Court due to lack of necessary information and details. The Court had held that the previous notice lacked sufficient materials and was issued without proper scrutiny or investigation. Despite this, a fresh notice was issued for the subsequent year without apparent consideration of the previous judgment. The petitioner had provided all necessary information regarding their transactions, yet a vague notice was issued without further investigation. The contents of the impugned notice were found to be identical to the previous year's notice. The Court decided to set aside/quash the Show Cause Notice dated 24.12.2023, similar to the previous decision, while reserving the right of the respondent authorities to take appropriate action in accordance with the law.Final DecisionThe Court allowed the writ petition to set aside/quash the Show Cause Notice dated 24.12.2023, similar to the previous decision regarding the earlier notice. The judgment reserved the right of the respondent authorities to take further action in accordance with the law. The miscellaneous petitions pending were ordered to be closed, with no specific order as to costs.