Case Law Details
Gopeshwar Iron And Steel Works Private Limited And Anr. Vs Superintendent (Calcutta High Court)
A recent ruling by the Calcutta High Court in the case of Gopeshwar Iron and Steel Works Private Limited Vs Superintendent has put a spotlight on jurisdictional issues related to the Central Goods and Services Tax (CGST) Act, 2017. The court stayed a notice purported to have been issued under Section 61 of the CGST Act, thereby allowing Gopeshwar Iron and Steel Works’ appeal. This article offers an in-depth look into the facts of the case, the arguments presented, and the final decision.
Background of the Case: Gopeshwar Iron and Steel Works filed an intra-court appeal against an order that denied any interim relief to them. The crux of the issue was whether the respondent authority could proceed further based on a notice dated April 17, 2023, issued under Section 61 of the CGST Act, 2017.
Appellant’s Grounds for Appeal
Gopeshwar Iron argued that:
- For the same period under scrutiny, the Audit Department had already issued a notice, requested documents, and upon satisfaction, had closed the case on March 25, 2022.
- The Directorate General of Goods and Services Tax Intelligence (DGGI) had also issued summons for the same period, and the matter was pending before them.
- The notice dated April 17, 2023, issued by the Superintendent was without jurisdiction as the Audit Department had already settled the case.
Respondent’s Argument: The standing counsel for the respondents contended that new directions were received from the Analytical Wing of the Department, which necessitated the issue of the new notice.
The Legal Issue: The court had to decide whether a fresh notice could be issued by the Range Officer after the Audit Department had conducted an audit, resulting in an order under Section 65 of the Act.
Court’s Ruling: Considering this to be a jurisdictional issue, the Calcutta High Court allowed the appeal. The court stayed the notice dated April 17, 2023, until the disposal of the writ petition. It directed the respondent to file an affidavit-in-opposition, after which the writ petition will be heard and disposed of on merits.
Conclusion: The ruling highlights the complexities involved in jurisdictional matters under the CGST Act. It serves as a precedent for businesses and authorities, emphasizing the need for clear jurisdictional lines in tax matters. Importantly, it reaffirms the value of following due processes and not issuing overlapping or conflicting notices, which can result in legal tangles and disrupt businesses. The Calcutta High Court’s decision to stay the notice brings temporary relief to Gopeshwar Iron and Steel Works but sets the stage for a deeper legal discourse on jurisdiction in CGST cases.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. This intra court appeal is directed against the order dated 3rd July, 2023 in WPA 10506 of 2023 by which the learned Single Bench was not inclined to grant any interim order.
2. Aggrieved by the same, this appeal has been filed.
4. We have elaborately heard the learned advocate for the appellants and the learned standing counsel appearing for the respondent authority.
5. The question in the instant case would be as to whether the respondent authority can proceed further pursuant to the notice dated 17.04.2023 purported to have been issued under Section 61 of the CGST Act, 2017.
6. The appellants’ case is that for the very same period the Audit Department had issued a notice dated 5th April, 2021 and called for several documents which was submitted by the appellants and after being satisfied the documents placed, the Audit Department has closed the case and has approved by proceeding dated 25.03.2022. It is further submitted that for the same period the DGGI has already issued summons and the appellants have submitted documents and the matter is pending before the DGGI. It is submitted that Section 61 of the CGST Act deals with scrutiny of returns and in terms of sub-section (3) of Section 61 in case no satisfactory explanation is being furnished by the assessee or the assessee claims to take corrective measures in his return, the appropriate officer may ensure appropriate action including those under Section 65 of the Act. This having been done and the Audit Department having approved and settled the matter by order dated 25.03.2022. The Superintendent, CGST & Central Excise, L-1, Circle-III, Durgapur will have no jurisdiction to issue the notice dated 17.04.2023 which was impugned in the writ petition. Further, the appellants’ case is that another question is the jurisdiction of the DGGI to call for appearance and they have submitted their jurisdiction and supplied all the documents called for and the matter is pending. Furthermore, it is submitted that the notice dated 17.04.2023 issued by the Superintendent, Range 1 the documents which have been called for are identical and the same settled by the department which were called for by the Audit Department which was furnished, considered and the Audit Department has been approved and settled and, therefore, it is the case for the appellants that the notice dated 17.04.2023 is without jurisdiction.
7. The learned standing counsel appearing for the respondents submitted that directions have been received from the Analytical Wing of the Department and this has necessitated the Superintendent to issue the notice dated 17.04.2023.
8. In any event the legal issue which has been required to be considered is whether a fresh notice would be issued by the Range Officer. The scrutiny of return had been done by the Audit Department and audit has been conducted which has resulted in an order under Section 65 of the Act. This being a jurisdictional issue, this court is inclined to pass the following order which will be in force till the writ petition is heard and disposed of.
9. In the result, the appeal is allowed and for the reasons stated above, the notice issued by the Superintendent, CGST & Central Excise, L-1, Circle-III, Durgapur 1 Division, Durgapur dated 17.04.2023 shall remain stayed till the disposal of the writ petition being WPA 10506 of 2023. The respondent is directed to file the affidavit-in-opposition in the writ petition after which the writ petition will be heard and disposed of on merits and in accordance with law.
10. The learned senior standing counsel for the respondent department places reliance on the decision in the matter of M/s. Suresh Kumar PP v DGGI passed by Hon’ble Justice K Vinod Chandran and Hon’ble Justice T. R. Ravi and would submit that investigation can parallely proceed. The applicability of the decision will be considered when the writ petition is taken up for hearing.
