Calcutta High Court (Appellete Side)
Ideal Unique Realtors Private ... vs The Union Of India & Ors on 22 April, 2022
Item No.1.
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
HEARD ON: 22.04.2022.
DELIVERED ON:22.04.2022
CORAM:
THE HON'BLE MR. JUSTICE T. S. SIVAGNANAM
AND
THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA
FMA 297 of 2022
With
I.A. No.CAN 1 of 2022
Ideal Unique Realtors Private Limited & Anr.
VERSUS
The Union of India & Ors.
Appearance:-
Mr. Sandip Choraria,
Mr. Rajarshi Chatterjee,
Mr. Himangshu Kr. Ray .....for the appellants.
Mr. Vipul Kundalia,
Mr. Sukalpa Seal,
Mr. Anurag Roy .. for the respondent nos.2 & 3.
JUDGMENT
(Judgment of the Court was delivered by T.S. SIVAGNANAM, J.)
1. This intra Court appeal is directed against the order dated
22nd November, 2021 in W.P.A. No.15695 of 2021. The
appellants /writ petitioners challenged the jurisdiction of the
7th respondent, the Sr. Audit Officer / SSCA-FAP-4 in issuing two
communications both dated 22nd March, 2021 enclosing a memo
called as "spot memo". The appellants questioned the action of
the 7th respondent in the writ petition, firstly, on the ground
that there is no jurisdiction for the audit department to issue
such a notice and in this regard, places reliance on the
decision of the High Court of Bombay in Kiran Gems Private
Limited - Vs. - Union of India reported in 2021 SCC OnLine Bom
98. This decision was relied on for the proposition that the
Central Excise Revenue Audit (CERA) cannot conduct audit of
records of a private entity apart from stating that the
appellants have pointed out that for the self-same reason three
earlier proceedings were commenced firstly by CGST Department,
Park Street Division, Kolkata vide letter dated 15 th May, 2018
for which the appellants had submitted their reply on 15th June,
2018 along with the documents called for. For the very same
purpose, the Director General of Goods and Services Tax, DGGI,
Kolkata, Zonal Unit had issued summons dated 11th July, 2018 for
which the appellants had submitted their reply on 24 th July,
2018. Thereafter, DGGI issued notice dated 15 th November, 2019
and thereafter another notice dated 18th November, 2019 was
issued by the 5th respondent and summons dated 2nd January, 2020
for which the appellants have responded and submitted the
requisite documents.
2. The appellants appeared before the authority in response to
the summons on 14th January, 2020 and stated to have submitted
the requisite documents. In spite of the same, the
Superintendent, Range - III, Park Street Division, CGST & CX,
Kolkata South Commissionerate had issued two communications
dated 22nd March, 2021 enclosing two spot memos.
3. The question would be whether the appellants can be dealt
with in such a fashion by the respondents department. From the
records placed before us, we find that none of the proceedings
initiated by the department has been shown to have been taken to
the logical end. If, according to the respondents department,
there is an irregularity in the availabilment of credit, then
appropriate proceedings under the Act should be initiated and
after due opportunity to the appellants, the matter should be
taken to the logical end.
4. We find that such a procedure had not been adopted in the
instant case and the appellants appears to have been dealt with
in a most unfair manner in the sense that from the year 2018 for
the very same TRAN - 1 issue the appellants have repeatedly been
summoned, issued notices etc. The spot memos, which have been
communicated to the appellants along with the communications
dated 22nd March, 2021 is also for the very same purpose.
5. Thus, it is not clear as to why different wings of the very
same department have been issuing notices and summons to the
appellants without taking any of the earlier proceedings to the
logical end.
6. Therefore, on that ground, we are of the view that the spot
memos, which have been furnished along with the communications
dated 22nd March, 2021 cannot be enforced. However, we make it
clear that the issue whether CERA audit can be conducted against
a private entity as contended by the appellants is not gone into
as this Court is of the view that it is too premature for the
Court to give a ruling on the said issue. This is more so
because the authorities have not taken forward the proceedings,
which they have initiated earlier from May, 2018.
7. Therefore, it is appropriate for the concerned authority to
take the proceedings to the logical end after affording an
opportunity of personal hearing to the appellants.
8. From the records placed before us, we find that there is no
allegation against the appellants that they have not cooperated
with the department in not responding to the summons issued
earlier. Conveniently, the communications dated 22nd March, 2021
issued by the Superintendent, Range - III, Park Street Division,
CGST & CX does not refer to any of the earlier proceedings,
which have been initiated against the appellants.
9. For the above reasons, the writ appeal is allowed to the
extent indicated. The spot memos enclosed with the
communications dated 22nd March, 2021 are quashed and there will
be a direction to the 5th respondent, namely, Additional
Assistant Director, DGGI, Kolkata, Zonal Unit to consider the
reply submitted by the appellants dated 14th January, 2020 along
with the earlier reply given by the appellants dated 15 th June,
2018 and 24th July, 2018. The authorised representative of the
appellants shall be afforded an opportunity of personal hearing
and a decision be taken on merits and in accordance with law.
10. The appeal along with connected application are disposed
of.
11. No costs.
12. Urgent photostat certified copy of this order, if applied
for, be furnished to the parties expeditiously upon compliance
of all legal formalities.
(T.S. SIVAGNANAM, J)
I agree,
(HIRANMAY BHATTACHARYYA, J.)
NAREN/PALLAB(AR.C)
