P. K. Agarwala Vs Union of India (Jharkhand High Court)
Jharkhand High Court has granted an interim stay on Goods and Services Tax (GST) proceedings against P. K. Agarwala, deeming a show cause notice (SCN) issued under Section 74 of the CGST Act, 2017, as prima facie without jurisdiction. The SCN, dated July 29, 2024, was based solely on an audit objection from June 24, 2024.
The court noted that the petitioner had admittedly paid the relevant interest for GST pertaining to Financial Year 2017-18 in Financial Year 2019-20, and there was no suppression of facts. The ruling implies that a mere audit objection, without evidence of suppression, cannot be the sole basis for invoking the more stringent provisions of Section 74. All further proceedings are stayed until a future order. No judicial precedents were cited in the order.
FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT
1. Notice to the respondents.
2. Mr. P.A.S. Pati, learned Sr. SC, CGST, accepts notice for the respondents.
3. Prima facie, the demand-cum-notice to show cause issued on 29.07.2024 invoking Section 74 of the CGST Act, 2017 appears to be without jurisdiction inasmuch as interest payment was admittedly made by the petitioner in financial year 2019-20 in respect of G.S.T. pertaining to financial year 2017-18, and there was no suppression by the petitioner of the same, and merely on the basis of an audit objection raised on 24.06.2024, notice under Section 74 of the CGST Act, 2017 could not have been issued to the petitioner. Therefore, there shall be interim stay of all further proceedings pursuant to demand-cum-notice to show cause dt. 29.07.2024, until further orders.
