Case Law Details
Jindal Communication Vs State of Uttar Pradesh and 4 others (Allahabad High Court)
Allahabad High Court recently addressed a dispute involving a Goods and Services Tax (GST) demand raised against Jindal Communication by the State of Uttar Pradesh. The petitioner challenged a show cause notice dated May 27, 2024, and a subsequent final order dated August 8, 2024, which levied a demand of Rs. 76,11,305. The demand stemmed from an alleged difference between the petitioner’s reported GST turnover and PAN turnover for the period of April 2019 to March 2020, amounting to Rs. 3,84,40,935.81.
According to submissions made during the proceedings, the petitioner firm, Jindal Communication, registered under the GST Act since October 15, 2019, operates in the business of telephone sets and SIM cards. A separate, pre-existing firm, M/s Jindal Marketing Company, which migrated from the VAT regime to GST, deals in wholesale FMCG goods. A key point of contention was that both firms were registered under the GST using the same Permanent Account Number (PAN).
The petitioner argued that the turnover difference identified by the authorities for Jindal Communication was, in fact, the turnover belonging to Jindal Marketing Company. It was submitted that returns for Jindal Marketing Company reflecting this identical turnover had been duly filed. The petitioner contended that the demand notice against Jindal Communication arose solely due to the shared PAN causing a mix-up in attributing the turnover. Upon discovering the final order and demand in January 2025, the petitioner attempted to seek rectification under Section 161 of the Act, but the application was reportedly rejected on grounds of being time-barred.
During the court hearing, counsel for the respondents reviewed material presented by the petitioner, including returns filed for Jindal Marketing Company. Based on this evidence, which indicated that the alleged turnover difference matched the turnover reported for Jindal Marketing Company, the respondents’ counsel was reportedly unable to dispute the petitioner’s assertion that the show cause notice and final order resulted from the two firms sharing the same PAN. The court found that, given this factual situation, the demand against Jindal Communication could not be sustained.
Consequently, the Allahabad High Court allowed the writ petition. The court quashed and set aside both the show cause notice dated May 27, 2024, and the final order dated August 8, 2024. The judgment did not reference specific judicial precedents but appeared to rest on the factual finding that the turnover discrepancy was attributable to the administrative issue of two entities operating under a single PAN, rather than an actual under-reporting by Jindal Communication.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
This writ petition has been filed by the petitioner, aggrieved of show cause notice dated 27.05.2024 and final order dated 08.08.2024 whereby notice under Section 73 of the U.P. Goods and Services Tax Act, 2017 (for short ‘the Act’) on account of difference in GST turnover and PAN turnover, was issued and a demand to the tune of Rs.76,11,305/- has been created respectively.
2. Submissions have been made that petitioner firm is duly registered under the Act since 15.10.2019 and is in the business of Telephone Sets and Sim Card. Another firm under the name and style of M/s Jindal Marketing Company which was pre existing, migrated from VAT regime to GST regime, which firm was engaged in the business of trading of wholesale FMCG (biscuits). The show cause notice dated 28.12.2021 was issued to the petitioner Jindal Communication on the ground that Bank details were not updated. Where after on 29.01.2022, the registration was cancelled with effect from the same date. It is submitted that in January, 2025, the petitioner was informed about passing of the final order dated 08.08.2024 and the demand raised therein. When the petitioner checked the portal, he became aware of the issuance of the notice and passing of the final order.
3. Submissions have been made that the notice under Section 73 of the Act for the period from April, 2019 to March, 2020, alleged a difference of turnover to the extent of Rs.3,84,40,935.81. It is submitted that the issue apparently arose on account of the fact that the registration of two firms of the petitioner, i.e. Jindal Communication and Jindal Marketing Company are both registered through the same PAN number and while in relation to Jindal Marketing Company, the petitioner had filed all the returns based on the identical turnover as reflected in the show cause notice, for the present petitioner, i.e. Jindal Communication, the respondents were seeking the same turnover and tax over it. On coming to know of the same, the petitioner immediately moved application seeking rectification under Section 161 of the Act, however, the application came to be rejected as barred by limitation.
4. Feeling aggrieved, the present petition has been filed.
5. Learned counsel for the respondents based on the material produced by the petitioner, indicating the return filed in relation to Jindal Marketing Company wherein the return etc. have been shown identical to the difference which was alleged in relation to the petitioner firm, i.e. Jindal Communication, is not in a position to dispute the plea raised by the petitioner regarding issuance of show cause notice and passing of the final order on account of the fact that both the firms were registered under the GST through the same PAN number.
6. In view of the above fact situation, the issuance of show cause notice and raising of the demand against the petitioner firm cannot be sustained.
7. Consequently, the writ petition is allowed.
8. The show cause notice dated 27.05.2024 and final order dated 08.08.2024 (Annexure Nos. 6 and 8 to the writ petition) are quashed and set aside.
Order Date :- 10.3.2025
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