Jharkhand High Court
M/S Sri Sarang Steel vs The State Of Jharkhand on 13 July, 2022
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(T) No. 2762 of 2021
With
W.P.(T) No. 2798 of 2021
M/s Sri Sarang Steel, a proprietorship firm, having its principle place
of business at 337, ITI More, Chas, P.O. and P.S. Chas, Bokaro, through
its proprietor Manoj Kumar. ...... Petitioner
(in both the cases)
Versus
1.The State of Jharkhand, through the Secretary-cum-commissioner,
Department of State Tax, having its office at Project Building,
Dhurwa, P.O. and P.S. Dhurwa, Ranchi.
2.Joint Commissioner of State Tax, Dhanbad Division, Dhanbad,
Having its office at Luby Circular Road, P.O. and P.S.-Dhanbad,
District-Dhanbad.
3.Deputy Commissioner of State Tax, Bokaro Circle, Bokaro, having
its office at Sector-1, Bokaro Steel City, P.O. and P.S.-Bokaro Steel
City, District-Bokaro.
4.State Tax Officer, Bokaro Circle, Bokaro, having its office at Sector-1,
Bokaro Steel City, P.O. and P.S.-Bokaro Steel City, District-Bokaro.
......... Respondents
(in both the cases)
--------
CORAM: Hon'ble Mr. Justice Aparesh Kumar Singh
Hon'ble Mr. Justice Deepak Roshan
--------
For the Petitioner : Ms. Amrita Sinha, Adv.
(in both the cases)
For the Respondents : Mr. Ashok Kr. Yadav, G.A.-I
Mr. P.A.S.Pati, G.A.-II
Mr. Amit Kumar, Adv.
--------
08/13.07.2022
Per Deepak Roshan, J: Heard learned counsel for the parties.
2. Since both these writ applications are interconnected and common
issue is involved, as such both are being heard together and disposed of by
this common judgment. W.P.(T) No. 2762 of 2021 is with respect to the
Tax period from April 2018 to March 2019 whereas W.P.(T) No. 2798 of
2021 is with respect to the Tax period from July 2017 to March 2018.
3. The writ applications have been preferred by the petitioner for
quashing and setting aside show cause notices, both dated 23.07.2020,
(Annexure-3 in both applications) issued under section 73(1) and Rule
142(1) of the Jharkhand Goods and Services Taxes, (JGST) Act and also
for quashing and setting aside the adjudication orders, both dated
19.10.2020, issued under section 73(9) of the JGST Act and DRC-7, both
dated 19.10.2020 (Annexure-4 & 4/1 respectively in both cases).
The petitioner has further prayed for a direction to the respondents
for unblocking credit ledger which was blocked on 17.02.2020 and on
18.02.2020 to the tune of Rs. 47,38,408/-; however, during pendency of
these applications, the credit ledger has been unblocked though the
amount has been realized.
4. The case of the petitioner is that that it is engaged in trading of
Railway scraps and is duly registered under the provision of GST Act. An
inspection was carried out at the business premises of the petitioner at the
instance of administrative direction dated 25.06.2019 issued by JCST
based on one intelligence note dated 13.06.2019 alleging therein that the
petitioner is engaged in availing ineligible credit of input tax under fake
invoices by engaging himself in bill trading/circular trading without
physical movement of goods. No inspection report, whatsoever, has ever
been served upon the petitioner nor the documents relied upon has ever
been supplied to the petitioner. Further, without any information/notice
the respondent-Department suo moto blocked the credit ledger account of
the petitioner and the petitioner was in receipt of DRC-01A being
intimation of liability under section 74 (5) of JGST Act asking him to pay
the amount to the tune of Rs. 1,35,40,420.60/- failing which SCN will be
issued under section 74(1) of the JGST Act, and if the petitioner wished to
file the written submissions, same can be filed by 12.03.2020. Pursuant
thereto, the petitioner accordingly filed written submission alongwith all
the documentary proof that the transactions have actually taken place and
it is not a sham transaction. The respondent although dropped the
proceeding under section 74(1) of the JGST Act, however, initiated
proceedings under section 73(1) of the JGST Act and straightaway issued
show cause notices, without issuing DRC-01A. From perusal of SCN, it is
clear that all the submissions and documents produced therein being copy
of invoices, e-way bills, measurement slips, proof regarding payment
against good transport agency, etc. were duly verified and found genuine.
However, merely for the reason that a proceeding under section 74 of the
JGST Act has been initiated against the supplier of the petitioner namely
M/s Jai Jawan Khastha Bhandar and M/s Priti Enterprises, liability has
been fastened upon the petitioner under section 73(1) of the JGST Act.
Petitioner again submitted a detailed reply alongwith the proof of the
transactions entered into with its suppliers but without considering the
submissions and even without giving the opportunity of hearing to the
petitioner, the respondent authority passed the adjudication order under
section 73 of the JGST Act merely on the ground as mentioned in the
SCN that as the supplier of the petitioner has utilised its ITC in order to
discharge its tax liability, there is no actual payment of tax and thus the
condition as stipulated under section 16(2)(c) of the JGST Act has not
complied with.
5. Learned counsel for the petitioner submits that the main cause of
action for initiating proceeding under section 73 of the JGST Act does not
survive as this Court in the matter of suppliers of the petitioner being
W.P.(T) No. 3153 of 2020 and another analogous matters vide order dated
21.06.2022 has been pleased to set aside the show cause notice,
adjudication order and summary of order/demand notice in DRC-07.
Although a liberty has been given to the Revenue to initiate fresh
proceedings by issuing a proper show cause notice and to take a decision
thereupon in accordance with law. She further submits that although such
liberty has been given to the Respondent department but the fact remains
that at the present there is no proceeding against the suppliers of the
petitioner meaning thereby; the main cause for initiating proceeding
against the petitioner no longer survives as on date. She contended that
merely by keeping the present proceedings pending on the ground that the
department might initiate a fresh proceeding against the suppliers of the
petitioner is not justified. She further submits that the law casts an
obligation upon the parties to serve the documents/inspection report which
has been relied upon by either of the parties in a proceedings, however in
this case no inspection report has ever been served upon the petitioner
and/or no opportunity has been given to cross examine witnesses who
has supported the inspection report and intelligence note and the same is
in violation of Principles of Natural Justice.
Learned counsel relied upon the decision of the Hon'ble
Supreme Court delivered in the case of Ayaaubkhan Noorkhan Pathan
Versus State of Maharashtra & Ors., reported in (2013) 4 SCC 465 and
submits that in a case where the respondents have relied upon the
documents obtained during inspection in the premises of the Assessee on
the basis of intelligence note the same should be given to the Assessee to
enable them to properly answer to the charges pressed upon. Petitioner
being the purchaser has duly discharged its liability and had paid the tax.
It is not the case of respondent department that the petitioner has not
discharged its liability under the provisions of GST Act. The intent of the
legislation cannot be to punish the dealer acting in a bona fide manner.
She further relied upon the judgment passed by this Court in the
case of M/S Tarapore Company, Jamshedpur Versus State of
Jharkhand &Ors., being W.P.(T) No. 773 of 2018 and submits that in
similar facts and circumstances, this Court has been pleased to quash the
assessment order in following manner: "we are satisfied due to bona fides
on part of the Petitioner, no punitive action was required to be taken, or
warranted against the Petitioner. The selling dealer which had defaulted
in filing its return or depositing the tax collection from the petitioner in
the Government treasury, how the punitive action would be taken against
the Petitioner firm, only for the reason that JVAT Act provided for such
actions against both the dealers. We are not entering into the question of
vires. Certainly any punitive action is warranted only against the
defaulting dealers and not against the dealers acting in bona fide
manner."
Learned counsel further submits that Section 76 of the JGST Act
deals with the situation wherein the tax is collected by a person but not
paid to the Government. Further, Section 76(2) states that the proper
officer may serve on the person liable to pay such amount, a notice
requiring to show cause as to why the said amount as specified in the
notice, should not be paid by him to the Government and why a penalty
equivalent to the amount specified in the notice should not be imposed on
him. Thus, section 76 casts a duty upon the respondent department to
initiate a proceeding against the person who has collected the tax but not
paid the same to the Government exchequer and not against the bona fide
person. She contended that twice the amount cannot be recovered on the
same transaction and if a proceeding has already been initiated against the
defaulting dealers and if they are found defaulters, recovery proceedings
can be initiated against them and tax along with interests and penalty be
recovered from them and the petitioner cannot be charged against the
same transactions.
6. Learned counsel for the respondents submits that the Ministry of
Finance, Department of Revenue, Central Board of Indirect Taxes and
Customs GST-Investigation Wings, Government of India, referring to
GST Council Letter No. F No. 96/GCG-offence case date/GSTC/2019
dated 18.03.2019 issued 'Standard Operating Procedure' (SOP) vide
office memorandum dated 12.05.2019. This memorandum was issued to
curb the wrong availment/Forward Transaction of Input Tax Credit
(hereinafter ITC) by the registered person under the Goods and Services
Tax Act, 2017.
Learned counsel further submits that the State Taxes Department,
Government of Jharkhand while scrutinizing the registered
persons/dealers as directed by the State Taxes Department HQ, it was
detected that many tax payers under GST are though physically
nonexistent but had filed GSTR-1 and allowed the other dealers to utilize
the said ITC. The Head Quarter accordingly vide letter Va.Kr./GST Int.
cell/122/2019-2247 dated 25.06.2019 sent the Intelligence Note No. 30
dated 13.06.2019 to the concerned field office. He further submits that
based upon the aforesaid Intelligence Note No. 80 dated 13.06.2019, the
State Taxes Joint commissioner, Dhanbad Division, Dhanbad directed the
concerned officials to proceed and investigate in accordance with law.
During investigation of the business premise of the petitioner, no material
whatsoever was found available, even though as per the registration
certificate of the petitioner under GST it was shown as dealer of Iron, Iron
scrap etc. On demand of the records/documents related to the business
carried out by the representative of the petitioner, only few documents i.e.
few invoices and eway bills were produced.
He further submits that through the said inspection report dated
11.07.2019 the petitioner was directed to produce all the requisite records
on 17.07.2019; however, he did not turn up on 17.07.2019 before the
authority. As such, summon (reference no. 4129 dated 24.01.2020) under
Section 70 of the GST was issued to the petitioner. The proprietor
appeared on the date fixed and requested for some time to produce the
documents. The time was granted and the petitioner was directed to
produce the documents by 04.02.2020. The proprietor of the petitioner
produced the invoice related to inward/outward supplies, related Eway
bills, few slip of weighing bridge and pages of the ledger accounts. During
scrutiny of the documents/registers produced on behalf of the petitioner, it
was found that the petitioner had grossly violated section 35 of the JGST
Act read with Rule 56 of JGST Rule.
On the basis of facts determined as per Intelligence notes no. 80
dated 13.06.2019, inspection report dated 11.07.2019 and after
scrutinizing the documents/register produced by the petitioner, intimation
under Section 74(5) of the JGST Act, 2017 was issued vide order dated
25.02.2020; however, despite the above intimation, the petitioner did not
pay the tax liability as determined. As such a detailed show cause notice
dated 23.07.2020 was issued to the petitioner under Section 73(1) of the
GST Act and Rule 142(1) of the GST Rules and after giving due
opportunity to the petitioner, an order under Section 73(9) of the JGST
Act was passed and issued on 19.10.2020 for financial year 2017-18 &
2018-19 wherein it was categorically indicated that the petitioner had
availed the ITC passed by the dealers (M/s. Jai Jawan Kastha Bhandar,
M/s. Priti Enterprises) involved in fraudulent passing of ITC. It was found
that the ITC so forwarded by the dealers (M/s. Jai Jawan Kastha Bhandar,
M/s. Priti Enterpirses) to the petitioner had not actually paid tax to the
Government and had shown its tax liability paid to the Government by
availing the fraudulent ITC as available in ITC ledger.
7. Having heard learned counsel for the parties and after going
through the documents available on record, it appears that an inspection
was carried out at the business premises of the petitioner at the instance of
administrative direction dated 25.06.2019 issued by JCST based on one
intelligence note dated 13.06.2019 alleging therein that the petitioner is
engaged in availing ineligible credit of input tax under fake invoices by
engaging himself in bill trading/circular trading without physical
movement of goods. Thereafter, the Respondent department also blocked
the credit ledger account of the petitioner and the petitioner was in receipt
of DRC-01A being intimation of liability under section 74(5) of JGST Act
asking him to pay the amount to the tune of Rs. 1,35,40,420.60/- failing
which SCN will be issued under section 74(1) of the JGST Act. The
petitioner duly filed written submission along with all the documentary
proof that the transactions have actually taken place and it is not a sham
transaction. however, during pendency of these applications, the credit
ledger has been unblocked though the amount has been realized.
The respondent although dropped the proceeding under section
74(1) of the JGST Act, however, initiated proceedings under section 73(1)
of the JGST Act and straightaway issued show cause notices, without
issuing DRC-01A under Section 73(5) of the Act.
8. At this stage, it pertinent to mention here that the respondent-
Department has duly accepted all the contentions of the petitioner and also
the documents produced by him being copy of invoices, e-way bills,
measurement slips, proof regarding payment against good transport
agency, etc. and after verification and re-verification found them to be
genuine. However, merely for the reason that the Assessee had entered
into certain transactions with some of those companies especially M/s Jai
Jawan Kastha Bhandar and M/s. Priti Enterprises, upon whom
proceedings has been initiated under Section 74 of the Act for passing on
input tax credit through fraudulent method, the claim of Input Tax credit
of the petitioner has been rejected and accordingly the petitioner have
been asked for reversal of the same along with interest and penalty.
For ready reference relevant part of the impugned order is quoted
hereinbelow:-
Þ5- dj&ns; O;fDr }kjk lefiZr vH;[email protected]@lk{;ksa ds vkyksd esa iwjh dk;Zokgh dh iquZleh{kk dh xbZ]
rkfd U;k;iw.kZ fu"d"kZ ds vk/kkj ij vxzsrj dkjZokbZ gks ldsA
(i) iquZ tkap esa dj&ns; O;fDr }kjk lefiZr lHkh E-way bill lgh ik;k x;kA
(ii) Computer generated dkaVk iphZ dks muds }kjk iqu% lR;kfir fd;k x;k gSA
(iii) vH;kosnu esa ;gh Hkh lqfpr fd;k x;k gS fd dj&ns; O;fDr us ITC Mismatch ds fo:} iwoZ esa
Hkqxrku fd;k gS ,oa mDr dk lk{; Hkh izLrqr fd;k x;kA
(iv) GTA lsok ij fd;s x;s O;; ds fo:} RCM ds Hkqxrku djus dh Liability ij Lo;a Lohdkj djrs
gSA ,oa fu;ekuqlkj Hkqxrku djus dks rS;kj gSA¼ dj$C;kt$n.M dk fu/kkZj.k visf{kr gSA½
(v) dk;Zokgh dh iquZleh{kk esa ;g Hkh ik;k x;k fd dafMdk&3 esas lwfpc} vkiwfrZdÙkkZvksa esa ls dqN ,sls
vkiwfrZdÙkkZ Hkh gS] ftlds fo:} jkT;&dj vapy] cksdkjks }kjk tkWapksijkar ¼ Fraudulent Method ls
ITC dk nkok [email protected] ¼ pass on ½ djus ds vkjksi esa /kkjk&74 vUrxZr½ dkjZokbZ gqbZ gSA Li"Vr%
bu dj&ns; O;fDr ls izkIr vkiwfrZ ds vk/kkj ij M/s Sarang Steel ds }kjk nkokd`r ITC Lohdkj ugha
fd;k tk ldrk gSA
¼gkykafd mDr lwph esa lfEefyr vU; vkiwfrZdÙkkZ ds laca/k esa bl izdkj dk dksbZ vkjksi ugha gSa] vr%
muls izkIr vkiwfrZ esa lfUufgr ITC dks vekU; fd;s tkus ds [email protected]; dks rRdky la'kksf/kr djuk
U;k;laxr izrhr gksrk gSA½
bl izdkj] fuEukafdr ¼vkjksi fl} dj&ns;½ O;fDr;[email protected] a vkiwfrZdÙkkZvksa ls pass on fd;s x;s ITC ds
ykHkkFkhZ ds :i esa M/s Sri Sarang Steel ds fo:} ITC Reversal dh dkjZokbZ visf{kr gksxhaA
M/s Sri Sarang Steel (GSTIN- 20AKLPK 4147M1Z2) us Fradulent Method ls
ITC Pass on djus okys ¼dj&ns; O;fDr;ks½a ls fuEuor~ ITC izkIr fd;k gS] tks fd rRdky vekU; gSa gksus
ds dkj.k Reversible gS%&
fofÙk; o'kZ & 2018&19
d vkiwfÙkdÙkkZ GSTIN Taxable IGST CGST SGST CESS
z- izfr'Bku Value
l dk uke
a-
1- M/s Jai Jawan 20AERPR 9597930.0 0.00 863813.70 863813 0.00
Kastha 7894A1Z7 0 .70
Bhandar
2- M/s Priti 20AETPR7 39517775. 0.00 3556599.7 355659 0.00
Enterprises 652A1ZH 00 5 9.75
Total 49115705. 0.00 4420413.4 442041 0.00
00 5 3.45
mijksDr lHkh vkiwfÙkdÙkvksa us M/s Sri Sarang Steel dkss GSTR-1 ds ek/;e ls ITC dks
pass on fd;k gS ,oa Lo;a ds ikl QthZ :i ls l`ftr ,oa lafpr ITC dk iz;ksx dj GSTR-3B esa dj
ds Hkqxrku dks n"kkZ;k x;k gSA bl izdkj] M/s. Sri Sarang Steel us ftl ITC dk [email protected]
fd;k gS] mlds fo:} vkiwfrdÙkkZ us ljdkj dks okLrfod :i [email protected](Actually)] dj dk Hkqxrku ugha fd;k
gS (Condition of Section 16(2) (c) of GST Act 2017 is not satisfied; hence such ITC is
reversible as per law)
6. iwoksDZ r dafMdk 5(iv)/(v) ds vk/kkj ij dj&ns; O;fDr M/s Sri Sarang Steel ds fo:} la"kksf/kr
:i esa] /kkjk& 73 ds vUrxZr fuEuor~ dj] C;kt ,oa n.M vf/kjksfir fd;k tkrk gS%&
F.Y. Liability Tax Tax Interest Penalty Total
against Head
2018- Reversal CGST 4420413.45 1060899.23 442041.35 5923354.03
19 of ITC SGST 4420413.45 1060899.23 442041.35 5923354.03
Total 8840826.90 2121798.46 884082.70 11846708.06
Non CGST 4368.73 1048.50 10000.00 15417.23
Payment SGST 4368.73 1048.50 10000.00 15417.23
of RCM Total 8737.46 2097.00 20000.00 30834.46
Total 8849564.36 2123895.46 904082.70 11877542.52
vr^% fu;ekuqlkj /kkjk 73 (1) ,oa fu;e 142 (1) ds }kjk fofgr izko/kkukuqlkj O;olk;h dks dkj.k
i`PNk uksfVl (SCN) ds ek/;e ls iqu% i`PNk fd;k x;k fd D;ksa ugha mijksDr vuqlkj dj&ns; O;fDr ds
fo:} C;kt lfgr ITC ds Reversal dk vkns"k ikfjr fd;k tk;A SCN izkfIr ds 30 fnuksa ds vUnj
muls Li'Vhdj.k lefiZr fd;k tkuk @fu/kkZfjr C;kt lfgr ITC dk Reversal fd;s tkus gsrq funs"k
Hkh fn;k x;kA
mijksDr SCN ds fo:} O;olk;h us Form GST DRC-06 esa viuk tokc nkf[ky fd;k ,oa
O;fDrxr :i ls vius i{k dks j[kk A muds }kjk vius i{k esa lefiZr fd;s x;s leLr [email protected]{;ksa dk
[email protected]{kk fd;k x;kA muds }kjk iwoZ esa lefiZr [email protected] lk{;ksa dks orZeku SCN ds lanHkZ iqu%
nksgjk;k x;k gSA O;olk;h us E-way bill, Transport bilty ,oa vkiwfrZdŸkkZ dks fd;s x;s Hkqxrku bR;kfn
dk lk{; izLrqr fd;k x;kA fdUrq O;olk;u ds }kjk bl vk"k; dk lk{; izLrqr ugha fd;k tk ldk]
ftlls ;g lkfcr gks lda dh tkap/khu vkiwfrZdŸkkvksa ¼ftuds vkiwfrZ ds fo:} ITC vekU; fd;k x;k gS%&
lEcfU/kr vkiwfrZdŸkkvksa ds fo:} Fake invoice ds vk/kkj ij ITC Claim djus ,oa pass on djus ds vk/kkj ij
dkjZokbZ gqbZ gS] ,oa esllZ Jh lkjax LVhy Hkh muds }kjk pass on ITC ds ykHkkFkhZ gSa½ ds }kjk okLrfod (Actual)
:i esa dj dk Hkqxrku fd;k x;k gSaA
pfpZr vkiwfrZdŸkkvksa us GSTR-1 dks nkf[ky fd;k gS ,oa mDr ds ek/;e ls M/s Sri Sarang
Steel dks ITC Pass on Hkh fd;k gS] lkFk gh GSTR-1 ds vuqlkj ns; dj ds Hkqxrku dks GSTR-
3B (Return) esa nf"kZr Hkh fd;k gS] fdUrq GSTR-3B esa nf"kZr fd;k x;k leLr Hkqxrku ITC dk
mi;ksx djrs gw, fd;k x;k gSA pwWafd dj&ns; vkiwfrZdŸkkZ Fake Invoice ds vk/kkj ij ITC Claim
djus ,oa pass on djus ds vkjksfir gS ,oa muds Credit Leger esa lafpr ITC] tkWap esa vekU;
(invalid) ik;k x;k gS] vr% mDr vekU; ITC dk iz;ksx djrs gq, fd;k x;k Hkqxrku okLrfod
(Actual) ugha gks ldrk gSA bl izdkj] M/s Sri Sarang Steel us vkjksfir dj&ns; O;fDr;ksa ls tks
Hkh vkiwfrZ izkIr fd;k gS] mlds fo:} mu vkiwfrZdŸkkvksa ds }kjk ljdkj dks dj dk Hkqxrku okLrfod :i
esa fd;k tkuk LFkkfir ugha gksrk gS [Condition 16(2) (c) is not satisfied]A/kkjk& 16¼2½¼c½ dh "krZ ds
vuqlkj izkIrdŸkkZ O;olk;h dks ITC dk ykHk rHkh fn;k tk ldrk gS] tcfd og /kkjk&155 ds vuqlkj
;g lkfcr dj ldsa fd ftl vkiwfrZ ds fo:} og ITC dk nkok dj jgsa gSa mlesa lfUufgr dj dk Hkwxrku
okLrfod :i esa ljdkj dks fd;k tk pqdk gS (,sls djus esa O;olk;h loZJh lkjax LVhy vlQy jgsa )A
lkFk gha Non payment of RCM ds fo:} fu/kkZfjr nsunkjh dk iz"u gS] O;olk;h ds }kjk fn;k x;k
Li'Vhdj.k larks'ktud ugha gksus ds dkj.k Lohdkj ;ksX; ughs gSA
vr% SCN ds ek/;e ls fu/kkZfjr dj&C;kt&n.M dh jkf"k dks ;Fkkor j[krs gq, vafre :i ls
esllZ Jh lkjax LVhy ds fo:} nsunkjh dk fu/kkZj.k fuUeuor~ fd;k tkrk gS%&
F.Y. Tax Tax Interest Penalty Total
Head
CGST 4424782.18 1061947.73 452041.35 5938771.26
2018-19 SGST 4424782.18 1061947.73 452041.35 5938771.26
Total 8849564.36 2123895.46 904082.70 11877542.52
bl vkns"k dks GST Portal ij GST DRC-07 lfgr fuxZr fd;k tkrk gSAß
9. After going through paragraphs 5 and 6 of the impugned
adjudication order dated 19.10.2020 it clearly transpires that the
respondent No.4 at paragraph 5 & 6 of its order had admitted that upon re-
verification, it was found that e-way bills and computer generated
measurement slip are true and genuine documents and the petitioner in the
past has duly discharged its liability towards any mismatch in ITC.
10. At this stage it is relevant to mention here that the said M/s. Jai
Jawan Kastha Bhandar and M/s. Priti Enterprises with whom it was
alleged that the petitioner was having transactions had filed writ
application before this Court being W.P.(T) No. 3153 of 2020, 154 of
2020 and 3179 of 2020 (M/s. Jai Jawan Kastha Bhandar) for three
respective assessments years and W.P.(T) No. 3210 of 2010 and 3211 of
2020 (M/s. Priti Enterprises Vs. The State of Jharkhand and Ors.) for the
respective two assessment years and those writ applications were partly
allowed by this court and the respective impugned show cause notices, the
adjudication orders and the summary of the order/demand notices in
DRC-07 in the case of those petitioners were set aside and the matter was
remitted back to the concerned authority/adjudicating officer to proceed
with the matter in accordance with law vide order dated 21.06.2021.
11. In view of the aforesaid facts and circumstances when the
respondent-Department has duly accepted all the contentions of the
petitioner and found the e-way bills and computer generated measurement
slip to be correct and genuine documents and the sole reason for initiating
the proceedings against this petitioner and passing of the impugned
adjudication orders was due to his transaction with M/s Jai Jawan Kastha
Bhandar and M/s. Priti Enterprises and when the cases of those assesses
have been remanded to the adjudicating authority to pass fresh order in
accordance with law; interest of justice demands that the case of this
petitioner should also be remitted back to the adjudicating authority,
inasmuch as, the sole cause of action does not survives.
12. Consequently, show cause notices, both dated 23.07.2020,
(Annexure-3 in both applications) issued under section 73(1) and Rule
142(1) of the Jharkhand Goods and Services Taxes, (JGST) Act and also
the adjudication orders, both dated 19.10.2020, issued under section 73(9)
of the JGST Act and DRC-07, both dated 19.10.2020 (Annexure-4 & 4/1
respectively in both cases); are hereby quashed and set-aside.
13. It is made clear that we have not gone into the merits of the case,
however, the respondents are directed to proceed in the matter from the
stage of show cause notice after following principle of natural justice
keeping in mind the ratio decided in the case of M/s. Tarapore &
Company, Jamshedpur Versus The State of Jharkhand being W.P.(T)
No. 773 of 2018 and also in the case of D.Y.Beathel Enterprises Versus
State Tax Officer (Data Cell), Tirunelveli, reported in [2021] 127
taxmann.com 80 (Madras).
14. With the aforesaid directions, both these writ applications stand
disposed of.
(Aparesh Kumar Singh, J.)
(Deepak Roshan, J.)
Amardeep/AFR
