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Case Law Details

Case Name :  Procter and Gamble Home Products Private Limited Vs Union of India (Telangana High Court)
Appeal Number : Writ Petition No. 35288 of 2024
Date of Judgement/Order : 17/12/2024
Related Assessment Year :
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 Procter and Gamble Home Products Private Limited Vs Union of India (Telangana High Court)

Telangana High Court, in Procter and Gamble Home Products Pvt. Ltd. Vs. Union of India, set aside a GST order issued under Section 73 of the CGST Act, 2017. The petitioner challenged the order dated 31.08.2024, arguing that the Proper Officer in Telangana failed to determine the tax independently and instead relied on an ongoing case in Maharashtra. The petitioner contended that each state’s GST authority is an independent adjudicating body, and the Telangana officer had a statutory duty under Section 73(9) to assess tax liability without waiting for the outcome of proceedings in another state. The order confirmed a demand of ₹35.31 crore based on potential communication from Maharashtra, which the petitioner claimed was legally unsound.

The court observed that the procedure followed was inconsistent with the CGST Act and that tax determination must be done by the Proper Officer within the state, without external dependencies. The Special Government Pleader for State Tax acknowledged the procedural irregularity and agreed that the matter should be reconsidered. Consequently, the High Court quashed the order and remanded the case for fresh adjudication. The ruling underscores the requirement for independent tax determination by state GST authorities and ensures adherence to statutory procedures under the GST framework.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

Sri Rohan Shah, learned counsel represents Sri C. Nanda Gopal, learned counsel for the petitioner; Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No.1 and Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, for respondent Nos.2 & 3.

2. With the consent finally heard.

3. This petition filed under Article 226 of the Constitution takes exception to the order dated 31.08.2024 passed under Section 73 of the Central Goods and Services Tax Act, 2017 (for short, CGST Act”).

4. Learned counsel for the petitioner submits that the adjudicating authority was under a statutory obligation under Section 73(9) of the CGST Act to determine the tax. However, in Para No.1 (5), the State Authority opined as under:

Reply: The objections filed by the TP are examined with reference to the documents submitted in this regard and found that the Hon’ble High court of Bombay remanded the case back to the Maharashtra State GST authorities to give an opportunity. But the orders were not yet finalized by the Maharashtra authorities and in this concern no communication is received from them. Keeping in view the limitation of time for the year 2019-20, the demand of Rs.35,31,59,288.00 is confirmed subject to the communication received from the Maharashtra State GST department.”

5. Learned counsel for the petitioner submits that principle argument of the petitioner is that the procedure adopted by the ‘Proper Officer’ is unknown to law. The petitioner has different registration in the State of Telangana. Thus, the ‘Proper Officer’ of Telangana is an independent statutory authority and was under no obligation to wait for the outcome of the decision taken by the Maharashtra State GST Department. In the absence of determining the tax as per sub Section 9 of Section 73, the impugned order is bad in law and ultra vires Section 73(9) of the CGST Act.

6. Learned Special Government Pleader for State Tax fairly submits that the impugned order, on this ground, may be set aside and the matter may be remitted back to the proper officer to decide it a fresh.

7. Learned counsel for the petitioner raised other arguments also but since we are remanding the matter, it will be left open to the petitioner to raise all possible grounds before the Proper Officer.

8. Resultantly, the impugned order dated 31.08.2024 is set aside and the matter is remanded back with the aforesaid observation.

9. The Writ Petition is disposed of. It is made clear that this Court has not expressed any opinion on the merits of the case. No costs.

Interlocutory applications, if any pending, shall also stand closed.

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