Jharkhand High Court
M/S Unity Infraprojects Ltd vs The State Of Jharkhand Through The ... on 14 March, 2022
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(T) No. 985 of 2022
M/s Unity Infraprojects Ltd. --- --- Petitioner
Versus
1. The State of Jharkhand through the Commissioner
of State Taxes, Ranchi.
2. The State Tax Officer, Urban Circle, Dhanbad. -- --- Respondents
---
CORAM: Hon'ble Mr. Justice Aparesh Kumar Singh
Hon'ble Mr. Justice Deepak Roshan
---
For the Petitioner : M/s. Kartik Kurmy, Nitin Kr. Pasari
Sidhi Jalan, Naveen Toppo, Advs.
For the State : Mr. Rahul Saboo, S.C.-I
---
03/14.03.2022 Learned counsel for the petitioner Mr. Kartik Kurmy submits
that upon scrutiny of the petitioner's return for the period April 2018 to March
2019 certain discrepancies / mismatch were noticed in Form GST ASMT-10
vide reference no.5104 dated 11.02.2021 (Annexure-1). Petitioner furnished a
reply in Form GST ASMT-11 on 16.03.2021 (Annexure-2) inter-alia taking a
number of pleas through the annexed reply. However, an intimation of tax
payable under Section 73(5)/74(5) of the JGST Act, 2017 was issued in Form
GST DRC-01A (Annexure-3) dated 03.04.2021 by the State Tax Officer
indicating the total amount of tax, interest under Section 50 of the JGST Act
and penalty @ 10% amounting to Rs.3,84,11,318.04 asking the petitioner to
pay the same by 19th April 2021 failing which show-cause would be issued
under Section 73(1) of the Act issued. Petitioner duly replied to the
communication in Part-B of the Form DRC-01A in terms of Rule 142(2A) of
the JGST Rules 2017 on 13th April 2021 taking a plea that it was only
pursuant to the amendment in Rule 61(5) that GSTR-3B became a return for
the first time within the meaning of Section 39 of the JGST Act and the
provisions of Section 16(4) w.e.f. 1st January 2021. Therefore, the allegations
on interpretations of Section 16(4) of the JGST Act and the consequent denial
of ITC of Rs. 2,66,26,906/- is based on a misconception of law. The noticee
cannot be denied the right to avail ITC under Section 16 of the Act on any
technical or venial breaches. It is submitted that under Section 16(4) of the
Act a registered person shall not be entitled to take ITC in respect of any
invoice or debit note for supply of goods or services or both after the due date
of furnishing of the return under Section 39 for the month of September
following the end of the financial year to which such invoice or the date of
invoice relating to such debit note pertains or the date of furnishing of the
relevant annual return, whichever is earlier. Petitioner also cited a number of
judgments in his support.
In respect of the levy of the interest a plea was taken that no
rules have been prescribed for computation thereof in absence of which it is
unworkable. A plea has been taken that levy of interest would start only after
adjudication of the demand as the noticee has disputed the liability. Further
penalty under Section 73(8)/(9) would be attracted only after demand is
adjudicated upon a proper show-cause notice under Section 73(1) of the Act
and is not paid within 30 days of issuance thereof. It is the specific case of the
petitioner that no show-cause notice under Section 73(1) was issued after the
intimation under DRC-01A. Such categorical statement has been made at
paragraph 16 of the writ petition. However, the adjudicating authority has
proceeded to levy tax, interest and penalty by passing an Adjudication order
on 1st November 2021 (Annexure-5) to the tune of Rs. 3,84,11,318.04 and
directed for issuance of summary of show-cause notice under DRC-07.
Learned counsel for the petitioner submits that the adjudication
order is vitiated due to non-compliance of the principles of natural justice and
failure to follow the procedure prescribed under Section 73 of the Act. In this
regard he has placed reliance on the judgment rendered by this Court in the
case of M/s NKAS Pvt. Ltd Vrs. State of Jharkhand reported in 2022 VIL
139 JHR and also on the recent decision of this Court in the case of R.K.
Transport Pvt. Ltd. Vrs. The Union of India reported in 2022(2) TMI 1051.
It is pointed out that the Department has further proceeded to issue garnishee
notice in Form GST DRC-13 upon the petitioner's Bank i.e. Punjab National
Bank asking it to pay the sum of Rs.3,84,02,528/- to the Government
forthwith in terms of Section 79(1)(c) of the Act making it clear that failure to
do so shall render the bank to be a defaulter in respect of the amount specified
in the notice and face consequences as per the Act and Rules.
Learned counsel for the petitioner has relied upon the judgment
of a Coordinate Bench of this Court of which one of us (Deepak Roshan, J)
was a Member, Mahadeo Construction Company Vrs. Union of India & Ors.
W.P.(T) No.3517 of 2019 judgment dated 21st April 2020. He submits that this
Court has held that in the event the assesse disputes the leviability of interest,
no recovery proceeding under Section 79 of the Act can be initiated for
recovery of the interest amount without any initiation of any adjudication
proceedings. A perusal of the adjudication order dated 1 st November 2021
would itself show that no show-cause notice under Section 73(1) of the Act
was issued and petitioner denies issuance of any summary of show-cause
notice either. It is submitted that in those circumstances, the respondents may
be restrained from taking any coercive steps for realizing the amount in
question through the garnishee notice from the petitioner's bank Punjab
National Bank.
Learned counsel for the respondents-State seeks short time to
file a counter affidavit.
As prayed for by Mr. Rahul Saboo, learned S.C.-I, list the matter
on 22nd March 2022. Counter affidavit be filed by 21 st March 2022. In the
meantime, no coercive steps be taken against the petitioner pursuant to the
garnishee notice at Annexure-7 dated 25.02.2022. I.A. No.1759 of 2022
seeking stay of the proceedings stands disposed of.
(Aparesh Kumar Singh, J)
(Deepak Roshan, J)
Shamim/
