Chemplast Sanmar Limited Vs Assistant Commissioner (ST) (Madras High Court)
The Madras High Court disposed of two writ petitions challenging Show Cause Notices dated 10.05.2024 issued under Section 74 of the GST enactments for the tax periods 2018-19 and 2019-20 proposing demands of Rs. 624,81,52,060 and Rs. 83,45,92,000 respectively. The petitions were heard along with a batch of matters concerning proceedings under Section 74, and the Court held that its common order in Turbo Energy Private Limited, Fastenex Private Limited and Ispahani Estates Private Limited would apply mutatis mutandis, while also giving additional reasons specific to the petitioner.
The petitioner contended that the notices did not contain the ingredients required for invoking the extended period of limitation under Section 74 despite referring to that provision. It was submitted that pursuant to an NCLT order dated 26.04.2019, a division of the petitioner was merged with Chemplast Cuddalore Vinyls Limited and Sanmar Speciality Chemicals Limited was merged with the petitioner, resulting in transfer of unutilised Input Tax Credit under Section 18(3). Following filing of returns, an audit under Section 65 culminated in an Audit Report in Form GST ADT-02 dated 28.02.2023, after which proceedings under Section 73 resulted in Show Cause Notices dated 28.08.2023 and assessment orders dated 10.10.2023. The petitioner argued that fresh proceedings under Section 74 for the same period were impermissible and relied upon Nizam Sugar Factory Ltd. v. Collector of Central Excise and other decisions.
