Khokan Motors Works Private Limited Vs Senior Joint Commissioner of State Tax (Calcutta High Court)
The Calcutta High Court, in the case of Khokan Motors Works (P.) Ltd Vs Senior Joint Commissioner of State Tax, addressed a challenge by the petitioner, Khokan Motors, against an adjudication order, a subsequent appellate order, and a consequential demand notice issued by the State Tax authorities under the CGST and WBGST Acts. The core issue before the court was the violation of the principle of natural justice during the initial stages of the tax evasion proceedings.
Factual Background
The proceedings began with a pre-show cause notice dated August 24, 2023, alleging tax evasion for the period of April 2018 to March 2019, with a total demand of over crore. This notice was followed by a show cause notice on August 31, 2023, increasing the alleged evasion to over crore.
The petitioner submitted that neither the pre-show cause notice nor the show cause notice disclosed the detailed materials or description of the discrepancies, providing only cryptic allegations and the quantum of alleged tax evasion. The petitioner chose not to reply to these notices due to the lack of detail.
Subsequently, the adjudicating authority passed an order on October 4, 2023, fixing the liability at over crore. The petitioner applied for rectification, which led to a rectification order on October 16, 2023, drastically reducing the total demand to a final sum of .
