TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 847
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....in September 2023 under Section 67 of the TNGST Act, 2017. As many as 9 defects were noticed and they had been catalogued in the notices also. The petitioner failed to respond to the show cause notices. Thereafter, the impugned orders came to be passed on 11.06.2024 and 18.06.2024 calling upon the petitioner to pay the petition mentioned sums towards tax, penalty and interest. Challenging the same, these writ petitions have been filed. 3.The respondent has filed counter-affidavit and the learned Additional Government Pleader took me through its contents. He pointed out that the assessee ought to have filed appeals within time and having missed the bus cannot agitate the matter in writ proceedings. 4.Admittedly, the impugned orders were passed only under Section 74 of the TNGST Act, 2017. Chapter XII of TNGST Act, 2017 deals with assessment. Chapter XIII deals with audit. Chapter XIV deals with inspection, search, seizure and arrest. Section 73 enables the proper officer to proceed against the assessee for recovery of any tax that has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised. Action under this provision ....
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....y. The show cause notice must spell out the reason for non-payment or short payment or erroneous refund of tax or wrongful availing or utilization of input tax credit. The provision itself stipulates that such a situation must have been by reason of fraud or any wilful misstatement or suppression of facts to evade tax. In other words, the show cause notice itself must make it clear whether the assessee is being charged with fraud, or suppression or wilful misstatement. It is quite possible that one or all the three elements could be present. It is not enough to merely impute the offending the conduct to the assessee. The show cause notice itself must disclose the entire material on which the proper officer has arrived at such a conclusion. In the very nature of things, the inference can only be a tentative one. Section 74(9) of the Act mandates that the proper officer shall issue an order after considering the representation if any made by the noticee. If the noticee makes a request in writing for an opportunity of hearing, the proper officer is obliged to grant the same (vide Section 75(4)). The same obligation will apply when the proper officer contemplates an adverse decision ag....
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....tions Vs. The Deputy State Tax Officer II). Paragraph Nos.6 to 8 of the said order reads as follows:- "6. Before proceeding further, it may be relevant to extract to Section 74 of the GST Act, which has been invoked by the respondent vide impugned proceedings: "74... A reading of the above provision would show that the extended period would be invoked only where tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful misstatement or suppression of facts to evade tax. The existence of the above ingredients is a jurisdictional fact/condition precedent for invoking extending period of limitation under Section 74 of the Act. It is clear that existence of "jurisdictional fact" is sine qua non for the exercise of power. If the jurisdictional fact exists, the authority can proceed with the case and take an appropriate decision in accordance with law. It leaves no room for any doubt that to invoke the extended period, the Assessing Officer ought to show/demonstrate the existence of any of the circumstances set out in Section 74 of the Act. In terms of Section 74 o....
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.... is quashed. Save as aforesaid, the order-in-original is upheld. These appeals filed by the Revenue are allowed to the extent indicated above. No costs.'' 7.It may also be relevant to refer to the judgment of this Court rendered under the Income Tax Act in the case of CIT v. Elgi Ultra Industries Ltd. [2008] 296 ITR 573 (Mad), which reads as follows: ".. . the reopening of the assessment under section 148 beyond the period of four years at the end of the relevant assessment year can be sustained only if it is established that there is a failure on the part of the assessee to disclose fully and truly all material facts. In this case there is no finding that there is failure on the part of the assessee to disclose fully and truly all material facts." (emphasis applied) 8. This Court has perused the entire order of assessment and there is not even a whisper about fraud, wilful misstatement or suppression of facts. To a pointed question as to whether the adjudicating authority has anywhere during the course of proceeding indicated that there is fraud, wilful misstatement or suppression of fact, the learned Additional Government Pleader was unable t....
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....t of tax which is liable to be taxed and only pursuant to the inspection effected by the respondent, the petitioner had submitted himself for payment of tax and hence, the same cannot be said to be a voluntary payment and has been made only to wriggle out of the penal consequences. This conduct of the petitioner to evade tax will also fall under suppression and fraudulent activities envisaged under Section 74 of the GST Act. Hence, the contention that Section 74 cannot have been invoked against the petitioner cannot be countenanced." With utmost respect, I am unable to follow the above decision. This is for more than one reason. There is no reference to the earlier order dated 20.09.2024 made in W.P.(MD)No.22420 of 2024 (S.S.Communications Vs. The Deputy State Tax Officer II). There is also no reference to the circular issued by the Central Board of Indirect Taxes and Customs. It is well settled that the circular issued by the board is the binding authority concerned. In my view, nonpayment or short payment of tax or even evasion of tax by itself is not sufficient. They must be by reason of the elements specifically set out in Section 74. If there is no suppression or wilful mis....