Case Law Details
Nagarjuna Agro Chemicals Pvt.Ltd. Vs State of U.P. and Another (Allahabad High Court)
Introduction: In the recent case of Nagarjuna Agro Chemicals Pvt.Ltd. vs. State of U.P., the Allahabad High Court deliberates on the critical question of whether issuing a notice under Section 61(3) is a prerequisite for initiating action under Section 74 of the Central Goods and Service Tax Act, 2017.
Detailed Analysis: The petitioner, an assessee under the GST regime, submitted returns for the assessment year 2018-19. Despite no action under Section 61, the department initiated proceedings under Section 74, citing grounds related to goods’ classification and tax payment. The petitioner argues that the department should have pointed out deficiencies before proceeding under Section 74.
Section 61 of the Act empowers the proper officer to scrutinize returns, notify discrepancies, and seek explanations. If no satisfactory explanation is given within a specified period, the officer can initiate action under Section 74. The court emphasizes that scrutiny proceedings and Section 74 actions are distinct, and notice under Section 61(3) is not a condition precedent for Section 74 initiation.
The court dismisses the petitioner’s argument, asserting that the statutory scheme permits the department’s course of action. It distinguishes the case from M/S Vadivel Pyrotech Private Ltd., highlighting that it doesn’t restrict Section 74 jurisdiction based on Section 61(3) notices.
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