Morlatis Engineering and Construction Private Limited Vs Union of India (Patna High Court)
The Patna High Court dismissed a writ petition challenging multiple summons issued under the Central/Bihar Goods and Services Tax Act, 2017, holding that the summons were issued by competent officers under Section 70 of the Act and that interference at the inquiry stage would amount to obstructing an ongoing investigation.
The petitioner, a registered private limited company under the GST Act, sought quashing of multiple summons issued by various GST authorities on the ground that they were contrary to Section 6(2) of the Act and relevant CBIC circulars. The petitioner also sought directions restraining the authorities from recovery of disputed tax demand through GST DRC-03 or any other mode until completion of proceedings and determination of tax liability by the competent authority.
According to the petitioner, several notices and summons had been issued over a long period in connection with supply of goods and input tax credit claims. The petitioner submitted that it had already been subjected to assessment proceedings by the State authorities and challenged the propriety of issuance of repeated notices and summons.
The petitioner referred to notices issued under Section 74(5) of the Act alleging excess availment of input tax credit based on comparison of GSTR-3B and GSTR-2B returns. For the period April 2023 to March 2024, the alleged excess ITC under CGST, SGST, and IGST amounted to Rs. 34,77,301.90, while interest and penalty increased the total demand to Rs. 71,21,250.87. Another notice for the period 2024-25 worked out tax liability of Rs. 87,08,413/-, with interest and penalty increasing the total amount to Rs. 1,75,45,662.80. The petitioner also stated that show cause notices had been issued and orders under Section 74 had been passed confirming the findings in the notices despite explanations submitted during assessment proceedings.
