M/S Chimney Hills Education Society vs Additional Commissioner Of Central Tax
2024 Latest Caselaw 22002 Kant

Karnataka High Court

M/S Chimney Hills Education Society vs Additional Commissioner Of Central Tax on 30 September, 2024

Author: S.R.Krishna Kumar

Bench: S.R.Krishna Kumar

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                                                       NC: 2024:KHC:40718
                                                   WP No. 26164 of 2024




                 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                   DATED THIS THE 30TH DAY OF SEPTEMBER, 2024

                                       BEFORE
                   THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
                       WRIT PETITION NO. 26164 OF 2024 (T-RES)
            BETWEEN:

            M/S CHIMNEY HILLS EDUCATION SOCIETY
            REPRESENTED BY ITS SECRETARY
            SHRI MARISWAMYG
            AGED ABOUT 60 YEARS
            SON OF SHRI GANGADHARIAH M
            SY NO.15, CHIKKASANDRA
            HESARAGHATTA MAIN ROAD
            BENGALURU URBAN,
            KARNATAKA - 560 090.
            ALSO AT: R/AT # 59,
            NEAR SRS WOOD INDUSTRIES
            KEREGUDDEDAHALLI, CHIKKABANAVARA
            BENGALORE NORTH
            BENGALURU - 560 090.

                                                              ...PETITIONER
            (BY SRI. A. SHANKAR, SENIOR ADVOCATE FOR
                SRI. PRANAY SHARMA Y, ADVOCATE)
Digitally
signed by
            AND:
Vandana S
Location:
HIGH        1.     ADDITIONAL COMMISSIONER OF CENTRAL TAX
COURT OF           ANTI EVASION, BENGALURU NORTH
KARNATAKA          WEST DIVISION , 2ND FLOOR,
                   SHIVAJINAGAR BMTC BUS STAND
                   BENGALURU - 560 051.

            2.     COMMISSIONER OF CENTRAL TAX
                   BENGALURU NORTH WEST DIVISION
                   2ND FLOOR, SHIVAJINAGAR BMTC BUS STAND
                   BENGALURU - 560 051.
                                                            ...RESPONDENTS
            (BY SRI. ARAVIND V CHAVAN, ADVOCATE)
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                                                  NC: 2024:KHC:40718
                                              WP No. 26164 of 2024




      THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI
OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING
THE SHOW CAUSE NOTICE DATED 05.08.2024 ISSUED UNDER SECTION
74 OF THE ACT FOR THE TAX PERIOD JULY 2017- 2023 BY THE
RESPONDENT NO.1 20240857YX0000424474, HAVING BEARING DIN
FILED NO. NO. GEXCOM/AE/INV/GST/4583/2022-AE AND SCN REF NO.
34/2024-25 HEREIN MARKED AS ANNEXURE - A. B) ISSUE A WRIT OF
CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI
QUASHING THE DRC-01 DATED 05.08.2021 CONTAINING THE SUMMARY
OF THE SHOW CAUSE NOTICE BEARING DIN NO20240857YX0000424474
ISSUED BY THE RESPONDENT NO.1.

     THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:



CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR


                           ORAL ORDER

In this petition, petitioner seeks for the following reliefs:-

"a) Issue a writ of Certiorari or direction in the nature of quashing the Show Cause Notice dated:

05.08.2024 issued under Section 74 of the Act for the tax period July 2017-2023 by the Respondent No.1 bearing DIN No. 20240857YX0000424474, having filed no.

GEXCOM/AE/INV/GST/4583/2022-AE and SCN Ref No. 34/2024-25 herein marked as Annexure-A.

b) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the DRC-01 dated; 05.08.2024 containing the summary of the show cause notice bearing DIN No. 202408577YX0000424474 issued by the Respondent No.1.Copy of the DRC-01 dated: 05.08.2021 is enclosed and marked as Annexure-B.

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c) Issue a writ of Certiorari or direction in nature of a writ of certiorari quashing the Notice of personal hearing dated: 21.08.2024 bearing DIN No.2024857YX0000888C3F. A copy of the notice of personal hearing dated; 21.08.2024 is enclosed and marked as Annexure-C.

d) Issue a writ of certiorari or direction in nature of a writ of certiorari quashing the summons dated:

16.05.2024 bearing DIN No. 20240557YX00003833C6. a copy of the notice of personal hearing dated: 16.05.2024 is enclosed and marked as Annexure-D.

e) And pass such other orders as this Hon'ble court deems fit and proper in the interest of justice and equity."

2. Heard learned Senior counsel for the petitioner and

learned counsel for the respondents - revenue and perused the

material on record.

3. A perusal of the material on record will indicate that

though several contentions are urged by both sides in support of

their respective claims, the main / primary issue that arises for

consideration is, whether the impugned Notices at Annexures-A

and B both dated 05.08.2024 are vitiated on account of the fact that

the same purport to club / consolidate / group the demand for

more than one financial year i.e., for the tax period from 2017 to

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2023 and as to whether the impugned Notices deserve to be

quashed on this ground. The said issue came up for consideration

in the case of M/s. Bangalore Golf Club vs. Assistant

Commissioner of Commercial Taxes - W.P.No.16500/2024

dated 07.08.2024, in which, the co-ordinate Bench of this Court

held as under:-

" In this writ petition, the petitioner, a Club, challenges the impugned show cause notice dated 07.05.2024, as detailed in Annexure-F, and the summary of the show cause notice dated 08.05.2024, as outlined in Annexure-G, issued by the respondent for the tax periods 2019-20, 2020-21, 2021-22, 2022-23, and 2023-24. The petitioner contends that these notices, issued under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017, are flawed due to the improper consolidation of multiple tax periods into a single show cause notice.

2. The petitioner's primary argument is that the respondent cannot issue a common show cause notice by grouping the tax periods from 2019 to 2023-24. The petitioner asserts that under Section 73 of the CGST Act, a specific action must be completed within the relevant year, and the limitation period of three years applies separately to each assessment year. Consequently, the petitioner contends that clubbing multiple tax periods in a single notice is impermissible, and separate notices should have been

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issued for each assessment year under sub-Section (1) of Section 73.

3. The petitioner relies on the judgment of the Hon'ble Madras High Court in the case of M/s. Titan Company Ltd. vs. Joint Commissioner of GST1. The Madras High Court, while addressing a similar issue, relied on the Hon'ble Supreme Court's decision in State of Jammu and Kashmir and Others vs. Caltex (India) Ltd.,2. The Hon'ble Apex Court held that where an assessment encompasses different assessment years, each assessment order can be distinctly separated and must be treated independently.

4. This Court has reviewed the judgment of the Madras High Court and the scope of inquiry under Section 73 of the CGST Act. Based on the established legal principles and the precedent set by the Hon'ble Apex Court, this Court finds that the respondent erred in issuing a consolidated show cause notice for multiple assessment years, spanning from 2019 to 2023-24.

5. Section 73(10) of the CGST Act mandates a specific time limit from the due date for furnishing the annual return for the financial year to which the tax due relates. The law stipulates that particular actions must be completed within a designated year, and such actions should be executed in accordance with the law's provisions. The

AIR 1966 SC 1350

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principles enunciated in the judgment cited by the Hon'ble Supreme Court are directly applicable to the present case.

6. For the reasons aforementioned, this Court concludes that the show cause notices issued by the respondent are fundamentally flawed. The practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act and established legal precedents.

7. Accordingly, this Court proceeds to pass the following:

ORDER

(i) The writ petition is allowed;

(ii) The impugned show cause notice dated 07.05.2024 (Annexure-F) and the summary of the show cause notice dated 08.05.2024 (Annexure-G) issued by the respondent for the tax periods 2019-20, 2020-21, 2021-22, 2022-23, and 2023-24 are hereby quashed;

(iii) This order, however, does not preclude the respondent from issuing separate show cause notices for each assessment year in compliance with Section 73 of the CGST Act, 2017."

4. As is clear from the aforesaid judgment of this Court, the

issue in controversy involved in the present petition is directly and

squarely covered by the aforesaid judgment and consequently, the

impugned Notices deserve to be quashed by reserving liberty in

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favour of the respondents to issue separate / independent Notices

for each assessment year in terms of Section 73 of the CGST Act,

2017.

5. In the result, I pass the following:

ORDER

(i) Petition is hereby allowed and disposed of in terms of the

judgment of this Court in the case of M/s. Bangalore Golf Club vs.

Assistant Commissioner of Commercial Taxes -

W.P.No.16500/2024 dated 07.08.2024.

(ii) The impugned Notices at Annexures-A and B both dated

05.08.2024 and all further proceedings pursuant thereto are hereby

quashed.

(iii) Liberty is reserved in favour of the respondents to issue

separate / independent notices for each assessment year in terms

of Section 73 of the CGST Act, 2017 and proceed further in

accordance with law.

Sd/-

(S.R.KRISHNA KUMAR) JUDGE

RB/SRL