The Andhra Pradesh, Amaravati held that scrutiny of returns is not an essential condition for initiating proceedings to demand tax.
The division bench of Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa said, “Sections 73 and 74 are not controlled by section 61 as reference to the same is absent. Section 74 uses “where it appears” conferring wide scope as information may be from any credible source. Proper officer may proceed under section 74 based on action under section 61 on scrutiny of returns or section 65 on audit or some other fact.”
BACKGROUND
The petitioner was trading in groundnut. The petitioner was regularly filing return till August, 2019 and he suffered huge loss and wound up his business in August, 2019 and consequently his GST registration was canceled w.e.f August, 2019.
The petitioner’s case is that he received above show cause notice on 16.07.2022 i.e., after the expiry of time granted for submitting explanation. Therefore, the petitioner personally approached the department. The petitioner submitted that all the business transactions of the petitioner firm were genuinely covered by e-way bills generated for each supply with the vehicle numbers and concerned locations and the purchasers were genuine traders situated in the State of Telangana and supplies were made to them during the course of inter-state supply and that he has not committed any fault.
However, the department refused to accept the objections raised by the petitioner on the ground that the time stipulated in the show cause notice for filing objections was over. He did not consider the submission of the petitioner that he received notice only on 16.07.2022 and informed the petitioner that final assessment order would be issued in due course.
OBSERVATIONS
The court observed that the petitioner had not filed objections/ reply to notice. Provisional attachment could not be concluded as illegal. Since show cause notice was received after expiry of time granted for reply, petitioner was to be directed to file explanation. The Adjudicating Authority was to be directed to consider reply and pass order after granting opportunity for personal hearing Sections 74 and 83 of GST Act.
Case Title: Devi Traders versus State of Andhra Pradesh
Citation: W.P.No.3659 of 2023
Read The Official Copy Of The Judgment Below