Sri Rahul Agarwal, learned counsel for the petitioner and Sri Ankur Agarwal learned Standing counsel for the State-respondents.
Written instructions supplied by Sri Ankur Agarwal is taken on record and a copy of the same has already been supplied to the counsel for the petitioner.
The challenge in the present petition is to show cause notice dated 25.5.2021 issued by respondent no. 3 under Section 74 of the U.P. GST/CGST Act, 2017 for the financial year 2018 -19.
Challenging the show cause notice, the learned counsel for the petitioner herein raises an issue with regard to the jurisdiction of the respondent no. 3 to proceed under Section 74 of U.P. GST/CGST Act, 2017 on the basis of a survey/SIB survey dated 13.9.2019.
It is argued that as a result of the said survey, two proceedings were conducted against the petitioner. With regard to blocking ITC under Rule 86-A of U.P. GST/CGST Rules 2017 and confiscation of seized goods under Section 130 of the Act. Against both the orders, the petitioner had filed appeals under Section 107 of the Act, 2017 and both the appeals have been allowed by the appellate authority. The appeal against the order under Rule 86-A has been allowed on 10.3.2021. The order passed by the appellate authority is annexed as Annexure No. ‘(4)’ to the writ petition. The appeal against the order under Section 130 of the Act has been allowed on 19.7.2022 and the order is annexed as Annexure No. ’12’ to the writ petition. It is argued by learned counsel for the petitioner that all the issues, which may arise during the assessment proceedings under Section 74 leading to the demand and notice, have already been dealt with by the appellate authority while passing the order dated 19.7.2022. The order which runs into more than 100 pages has been placed before us to demonstrate that each and every aspect of the matter relating to the violation or the contravention of the provisions of U.P. GST/CGST Act, 2017 has been taken into consideration by the appellate authority while setting aside the order passed under Section 130 of the Act, 2017.
It is, thus, argued that the basis of notice for initiation of the proceedings under Section 74 is the SIB survey dated 13.9.2019. The proceedings for demand and notice under Section 74 of the Act, 2017, thus, is a futile exercise. It is argued that the assessing authority under Section 74 cannot sit over the order of the appellate authority passed under Section 107 of the Act in relation to the same SIB survey.
The submission, thus, is that the proceeding initiated under Section 74 of U.P. GST/CGST are wholly without jurisdiction.
Sri Ankur Agrawal, learned counsel for the respondent-department submits that the Revenue is contemplating to challenge the order dated 19.7.2022 passed under Section 130 of the Act, 2017 before this Court as per the instructions received as on date.
Noticing the same, we find that the petitioner herein has come up against the show cause notice. All issues raised herein are still open to agitate before the Assessing Officer. We, therefore, do not find any good ground to entertain the writ petition.
However, the present writ petition is being disposed of with the observation that all the issues raised by the petitioner herein, especially the issue with regard to the jurisdiction of the Assessing Officer to proceed under Section 74, in view of the order of the appellate authority dated 19.7.2022, shall be raised before the Assessing Officer in reply to the show cause notice, the subject matter of challenge herein.
It is further submitted by the learned counsel for the petitioner that the reply to the show cause notice has already been filed and the issues have been agitated therein.
The petitioner is at liberty to add anything to the reply, as advised, to agitate the issues relating to the jurisdiction of the Assessing Officer.
In case, such a reply is given within a period of two weeks from today, the Assessing Officer shall be under obligation to deal with all the contentions of the petitioner made in the reply submitted on 5.8.2022 and the supplementary reply, if any, filed under the order of this Court and decide the same strictly in accordance with law. It goes without saying that the issue pertaining to jurisdiction of the Assessing Officer to initiate assessment proceeding under Section 74 of the Act shall be decided as a preliminary issue.