Sri Ram Stone Works Vs State of Jharkhand (Jharkhand High Court)
Notice u/s 61 cannot require taxpayer to defend supply at prices lower than Market Value-Jharkhand High Court; Jharkhand High Court Quashes GST Notices Over ‘Below Market Price’ Allegations;
In a significant ruling clarifying the limits of tax scrutiny powers under the Goods and Services Tax (GST) regime, the Jharkhand High Court has set aside a batch of notices issued to mining businesses challenging their sale prices based on a comparison with alleged prevalent market rates. The court held that using Section 61 of the Jharkhand Goods and Services Tax Act, 2017 (JGST Act), which deals with the scrutiny of returns for discrepancies, is beyond its scope when the sole basis for questioning is the difference between the declared transaction value and the perceived market price.
The matter came before a Division Bench of the High Court (bearing reference 2025:JHHC:13975-DB), which heard arguments concerning notices issued in Form GST ASMT-10 to various petitioners, primarily mining lessees and dealers involved in the sale of stone boulders and stone chips. The notices, issued by the respondent GST authorities purportedly under Section 61 of the JGST Act, alleged that the petitioners had declared a lower market price for their goods in their tax returns than the actual market price and demanded an explanation. Failure to provide a satisfactory response, the notices indicated, could lead to further proceedings under Sections 73 or 74 of the Act, which relate to the determination of tax liabilities.
