Qualicum Solutions Pvt. Ltd. Vs Chief Commissioner of CT and GST (Orissa High Court)
The Orissa High Court set aside and quashed a GST demand order dated 9th April, 2024 after finding that proceedings under Section 73 of the Odisha Goods and Services Tax Act, 2017 had been initiated without considering the petitioner’s reply furnished in the preceding scrutiny proceedings under Section 61. The Court held that initiation of the Section 73 proceeding was clearly without jurisdiction and directed the Revenue first to deal with the petitioner’s reply dated 29th July, 2021 under Section 61, after which it would be open to the Revenue to proceed further.
Qualicum Solutions Pvt. Ltd. challenged the order dated 9th April, 2024 made under Section 73. The petitioner referred to the preceding show cause notice dated 29th January, 2024, according to which proceedings under Section 73 were proposed because, among other things, the petitioner had allegedly not furnished a reply to communication in ASMT-10 dated 29th June, 2021 bearing Reference No. ZD210621008683T. The petitioner, however, demonstrated that it had furnished a reply dated 29th July, 2021 with reference to that communication. It therefore contended that the Revenue could not validly proceed under Section 73 without considering the reply already furnished.
The Revenue submitted that the earlier proceeding requiring a reply from the petitioner was under Section 61. It acknowledged that the subsequent Section 73 proceeding had been initiated overlooking the petitioner’s reply, but argued that adequate opportunity of hearing was subsequently provided to the petitioner and, therefore, no prejudice had been caused. On that basis, the Revenue sought dismissal of the writ petition.
The High Court examined the statutory scheme of Section 61. It noted that Section 61(2) requires consideration of the explanation furnished by the registered person. Section 61(3) provides that where no satisfactory explanation is furnished, the proper officer may initiate appropriate action, including proceedings under Section 73. When queried by the Court, Revenue’s counsel could not demonstrate that the petitioner’s reply dated 29th July, 2021 had been considered in the impugned notice and order.
In these circumstances, the High Court concluded that initiation of proceedings under Section 73 was clearly without jurisdiction. It accordingly set aside and quashed the impugned order. The Court directed that the petitioner’s reply dated 29th July, 2021 be dealt with under Section 61, following which the Revenue could proceed. The writ petition was disposed of accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. Mrs. Roy Choudhury, learned advocate appears on behalf of petitioner and submits, impugned is order dated 9th April, 2024 made under section 73 in Odisha Goods and Services Tax Act, 2017. She draws attention to preceding show cause notice dated 29th January, 2024 and points out therefrom, her client was told that proceeding under section 73would be initiated because it had not, inter alia, furnished reply to communication by ASMT-10 dated 29th June, 2021 detail Reference no.ZD210621008683T. She demonstrates from page-14, it is disclosure of reply dated 29th July, 2021 furnished by her client with reference to the referred communication. As such, revenue could not have proceeded under section 73 without considering her client’s reply. She seeks interference.
2. Mr. Mishra, learned advocate, Standing Counsel appears on behalf of revenue and submits, the proceeding in which petitioner was asked to furnish reply was under section 61. Even though proceeding under section 73 was thereafter initiated overlooking petitioner’s reply, in the subsequent proceeding adequate opportunity of hearing was given to petitioner. In the circumstances, no prejudice was suffered by petitioner. The writ petition be dismissed.
3. Section 61, by sub-section (2) requires consideration of explanation furnished. Sub-section (3) says, in case no satisfactory explanation is furnished, the proper officer may initiate appropriate action under, inter alia, section 73. On query made Mr. Mishra could not demonstrate that in impugned notice and order made under section 74, said reply dated 29th July, 2021 was considered.
4. Initiation of the proceeding under section 73 was clearly without jurisdiction. Impugned order is set aside and quashed. Petitioner’s said reply dated 29th July, 2021 is to be dealt with under section 61 and thereafter revenue can proceed.
5. The writ petition is disposed of.
