Narayan Pradhan Vs Asst. Commissioner (Orissa High Court)
Orissa High Court recently set aside an order issued under Section 74(1) of the Central Goods and Services Tax (CGST) Act, 2017, citing a jurisdictional error. The case, Narayan Pradhan Vs Assistant Commissioner, revolved around a show-cause notice dated February 19, 2024, which alleged tax underpayment through misstatement. However, the petitioner, represented by Advocate Harichandan, argued that the notice lacked any explicit allegation of misstatement, rendering the invocation of the extended limitation period under Section 74(1) invalid.
Advocate Harichandan contended that the absence of specific allegations in the show-cause notice meant the authority acted beyond its jurisdiction, making the subsequent order legally untenable. He sought quashing of the order and interim protection during the proceedings. The respondent, represented by Senior Standing Counsel Mr. Satapathy, argued that there was clear evidence of the petitioner willfully applying a lower tax rate, which justified invoking the extended limitation period.
The court observed that the issue of jurisdictional error went to the core of the case. It emphasized that a show-cause notice under Section 74(1) must clearly articulate allegations such as misstatement or fraud to justify the extended period of limitation. In the absence of such allegations, the proceedings initiated under Section 74 become legally unsustainable. The court, therefore, deemed the petition worthy of a full hearing.
