Bhagya Kalita Vs Union of India And 6 Ors (Gauhati High Court)
In the case of Bhagya Kalita vs. Union of India & Others, the petitioner challenged a show cause notice issued by the GST Intelligence, Guwahati Zonal Unit, under Section 74(1) of the CGST Act, 2017. The petitioner argued that the jurisdictional invocation of this section requires prima facie evidence of willful suppression, misstatement, or fraud, which was absent in this case. The petitioner’s counsel emphasized that all tax payments were duly recorded in the GST portal, and a recent circular issued by the Central Board of Direct Taxes and Customs (CBDT) on 13.12.2023 instructed authorities not to invoke Section 74(1) in cases where no fraudulent intent was evident. The counsel also referred to the Calcutta Discount Company Ltd. v. Income-Tax Officer (1961 AIR 372) case to support the argument that the petitioner should not be subjected to proceedings initiated without proper legal authority. Additionally, it was argued that constitutional courts must exercise their discretionary powers under Article 226 when statutory remedies are not efficacious.
During the proceedings, the counsel for the respondents, including representatives from the Central GST department, requested time to obtain instructions and acknowledged that recent amendments following GST Council recommendations might benefit the petitioner. Considering the arguments, the Gauhati High Court issued a notice returnable within two weeks and directed the respondents to file their counter affidavit. Meanwhile, the Court granted interim relief by staying further proceedings related to the impugned show cause notice until the next hearing scheduled for 09/12/2024.
