TaxTMI 
TaxTMI 
2025 (7) TMI 1767
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.... show-cause notice dated 27.12.2023 and Order-in-Original dated 10.03.2024 issued under Section 73 of the Central/State Goods and Services Tax Act, 2017 (For Short "the GST Act") for Financial Year 2018-19. The petitioner has also challenged the order dated 12.03.2025 rejecting the rectification application filed by the petitioner as well as the order dated 23.10.2024 passed by the Appellate Authority rejecting the appeal on the ground of limitation. 4. Brief facts of the case are as under : 4.1. The petitioner is a Private Limited Company engaged in business of manufacturing and supplying building chemical products and technologies. The petitioner filed the requisite returns and forms under the provisions of the GST Act for the period from 01.04.2018 to 31.03.2019. It is the case of the petitioner that respondent no. 3 Assistant Commissioner of State Tax - Ghatak-46 (Godhara), Division-5 (VAD), based on system-based scrutiny, issued an intimation in Form DRC-01A dated 26.12.2023 under Section 73(5) of the GST Act for the Financial Year 2018-19 read with Rule 142(1A) of the Central/State Goods and Services Tax Rules, 2017 (For Short "the GST Rules") intimating the proposed li....
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....d by the respondent no. 3 by order dated 12.03.2025. The petitioner also preferred an appeal challenging the order dated 10.03.2024 under Section 107 of the GST Act. However, the appeal was rejected by the impugned order dated 23.10.2024 on the ground of limitation. 5. Learned advocate Mr. Abhay Desai for the petitioners submitted that the respondent no. 3 could not have assumed jurisdiction for issuance of show-cause notice under Section 73 of the GST Act on the ground of difference between the turnover of the petitioner as per E-way bill and turnover disclosed in Form GSTR-09. It was submitted that Section 68 of the GST Act provides for inspection of the goods in movement and Rule 138 of the GST Rules lay down the procedure for search and inspection of goods in movement by the respondent authority. It was submitted that as per provisions of Rule 138 of the GST Rules, E-way bill is required to be generated by the petitioner either in relation to supply, if the consignment value of the goods is exceeding Rs.50,000/-(Rupees Fifty Thousand Only) or for reasons other than supply or due to inward supply from an unregistered person along with other eventualities enumerated in the sai....
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.... therefore, submitted that the Order-in-Original is an unseasoned order and therefore, liable to be quashed and set aside. 5.4. In support of his submission reliance was placed on the decision of the Hon'ble Apex Court in case of Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India and Anr., reported (1976) 2 SCC 981 wherein the Hon'ble Apex Court has emphasized for assigning reasons by the quasi judicial authority as under :- "6. Before we part with this appeal, we must express our regret at the manner in which the Assistant Collector, the Collector and the Government of India disposed of the proceedings before them. It is incontrovertible that the proceedings before the Assistant Collector arising from the notices demanding differential duty were quasi judicial proceedings and so also were the proceedings in revision before the Collector and the Government of India. Indeed, this was not disputed by the learned counsel appearing on behalf of the respondents. It is now settled law that where an authority makes an order in exercise of a quasi-judicial function it must record its reasons in support of the order it makes. Every quasi-judicial order mus....
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....h the arguments advanced on behalf of the appellants while rejecting the revision application. We hope and trust that in future the Customs authorities will be more careful in adjudicating upon the proceedings which come before them and pass properly reasoned orders, so that those who are affected by such orders are assured that their case has received proper consideration at the hands of the Customs authorities and the validity of the adjudication made by the Customs authorities can also be satisfactorily tested in a superior tribunal or court. In fact, it would be desirable that in cases arising under Customs and Excise laws an independent quasi-judicial tribunal, like the Income-tax Appellate Tribunal or the Foreign Exchange Regulation Appellate Board, is set up which would finally dispose of appeals and revision applications under these laws instead of leaving the determination of such appeals and revision applications to the Government of India. An independent quasi-judicial tribunal would definitely inspire greater confidence in the public mind." 5.5. It was, therefore, submitted that the impugned show cause notice and the consequent orders are liable to be quashed and set....
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....usiness; [(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation .-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;] (b) import of services for a consideration whether or not in the course or furtherance of business; [and] (c) the activities specified in Schedule I, made or agreed to be made without a consideration; [****] Section 9. Levy and collection.- (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 ....
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.... wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. [Rule 138. Information to be furnished prior to commencement of movement of goods and generation of e-way bill.- ** (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees- (i) in relation to a supply; or (ii) for reasons other than supply; or (iii) due to inward supply from an unregistered person, shall, before commencement of such movement, furnish information relating to the said goods as specified in Part A of FORM GST EWB-01, electronically, on the common portal along with such other information as may be required on the common portal and a ....
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....e of GST Act is clear to the effect that when there is any fraud, willful misstatement or suppression by the assesses then proceedings for determination of tax either not paid, short paid etc., are required to be initiated under Section 73 of the GST Act. In the facts of the case, the E-way bill is required to be issued by the assessee in case of movement of the goods as provided under Section 68 of the GST Act read with Rule 138 of the GST Rules and, therefore, for determination of the tax which is either not paid or short paid, in absence of any willful misstatement, fraud or suppression by the petitioner, the respondent authority could not assume jurisdiction to initiate proceedings under Section 73 of the GST Act. In the facts of the present case, admittedly the impugned show cause notice dated 26.12.2023 is issued under Section 73 of the GST Act and there is no allegation of fraud, willful misstatement or suppression by the petitioner in the entire proceedings. 9. For the issuance of show cause notice under Section 74 of the GST Act, the respondent authority has to alteast come to a prima facie conclusion that there is fraud, willful misstatement or suppression by the asses....