2024 (9) TMI 1694 - HC - GST

Tax Authority Must Validate Extended Limitation Period Before Issuing Show Cause Notice, Ensuring Procedural Fairness for Petitioner

HC allowed the petition by directing the tax authority to first adjudicate the validity of invoking extended limitation period before proceeding with the ... Challenged the issuance of a show cause notice - No material whatsoever or no assertion in the show cause notice - Invocation of the extended period of limitation under Section 74 of the CGST/SGST Act - HELD THAT:- This writ petition will stand disposed of directing that if the petitioner was to file his reply to Ext.P1 show cause notice, also objecting to the invocation of the extended period of limitation, the question as to whether there was any reason to initiate proceedings under Section 74 of the CGST/SGST Act will be considered as a preliminary issue by the 2nd respondent and an order shall be passed on that issue before proceeding further with the adjudication of Ext.P1 show cause notice. The petitioner shall file a reply to Ext.P1 show cause notice within a period of two weeks from the date or receipt of a certified copy of this judgment. The petitioner shall appear before the 2nd respondent through Authorised Representative, thereafter, the matter shall be adjudicated as directed above. In the Kerala High Court judgment, the petitioner challenged the issuance of a show cause notice under Section 74 of the Central Goods and Services Tax/State Goods and Services Tax Act, 2017 (CGST/SGST Act), arguing that it lacked any material or assertion justifying the invocation of the extended period of limitation. The petitioner contended that this issue could be adjudicated under Article 226 of the Constitution of India, as it pertains to a jurisdictional fact.The respondents, represented by the Senior Government Pleader and Standing Counsel, argued that the determination of whether there was material to invoke the extended period of limitation is a factual question that should be addressed by the competent authority, not directly by the High Court.Justice Gopinath P. concluded that the writ petition should be disposed of by directing the 2nd respondent to first adjudicate whether there was a valid reason for invoking the extended period of limitation before proceeding with the show cause notice. The petitioner was instructed to file a reply to the show cause notice, specifically objecting to the invocation of the extended period, within two weeks. The petitioner is also required to appear before the 2nd respondent on October 4, 2024, for further adjudication.