Case Law Details
Devi Traders Vs State of Andhra Pradesh (Andhra Pradesh High Court)
Andhra Pradesh High Court held that initiation of demand of tax u/s 74 may be either section 61 (scrutiny of returns) or section 65 (audit by tax authorities) or some other fact. Mere scrutiny of return not mandatory for initiation of demand of tax u/s 74.
Facts- Petitioner prays for writ of mandamus declaring the show cause notice dated 06.07.2022 in Form GST DRC-01-A issued under Section 74(1) r/w Rule 142(1)(a) of A.P. Goods and Services Act, 2017 (APGST Act) by the 3rd respondent and consequent attaching of bank account of the petitioner maintained with 4th respondent bank without at first issuing notice u/s. 61 of APGST Act calling for explanation of the petitioner and even without passing final assessment order U/s 74 of APGST Act is illegal, arbitrary and without jurisdiction and contrary to the provisions of APGST Act and consequently to set aside the show cause notice dated 06.07.2022 and direct the respondents to release the petitioner’s bank account.
Petitioner’s grievance is that though final assessment order was not yet passed, in the meanwhile, the salary account of the petitioner was attached and from out of the salary credited to the said account, amounts are being deducted towards recovery of the tax amount. Such recovery shall not arise till passing of the final assessment orders but the attachment was made prior to the final assessment order which is a provisional attachment. A provisional attachment can be made under Section 83 of APGST Act by the Commissioner of Taxes only. Such a provisional attachment order was also not passed and communicated to the petitioner.
Conclusion- It is manifestly clear that Section 73 and 74 are not controlled by section 61 alone as argued by the petitioner. The proceedings U/s 74 can be taken up by resorting to the audit of accounts U/s 65 also.
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