AMP Motors (P). Ltd. VS Central Board Of Indirect Taxes And Customs

The proceedings commenced with the presentation of comprehensive arguments by the esteemed counsels representing both parties, addressing various facets of the case, particularly during the admission phase and the subsequent plea for interim relief. Central to the challenge laid forth is the issuance of a show cause notice dated 18.01.2022. The crux of this challenge revolves around the contention that the act of issuing the notice itself is contentious and warrants scrutiny.

The matter at hand concerns the challenge to the issuance of a show cause notice dated 18.01.2022, with arguments presented by both parties’ learned counsel during the admission process and the prayer for interim relief. The crux of the challenge lies in the contention that the issuance of the notice lacks jurisdiction. This argument is grounded in the division of jurisdiction among taxation authorities, asserting that the respondents’ issuance of notice is impermissible when the assessment pertaining to the petitioner-assessee is under the purview of the Central Taxation Authority.

An additional issue raised is that of cross empowerment, citing Section 6 of the Rajasthan Goods and Services Tax Act, 2017. It is contended that without proper notification, the State authorities are precluded from issuing a show cause notice for tax imposition under the Act of 2017.

The petitioner’s counsel further argues that cross empowerment, as outlined in Section 6 of the Act of 2017, is specifically for refund purposes and does not extend to initiating assessment proceedings. Moreover, it is asserted that the impugned notice under Section 73 of the Act of 2017 fails to comply with mandatory provisions and violates Section 73(3) of the Act.

Regarding previous proceedings and notices, it is highlighted that the authority initially limited the subject matter to the tax liability on logistic and handling charges, to which the assessee responded accordingly. However, the impugned notice expanded the scope to include discrepancies in Input Tax Credit between GSTR-2A and claimed Input Tax Credit in yearly GSTR-3B, a matter not addressed in earlier proceedings.

In summary, the petitioner contends that the issuance of the show cause notice lacks jurisdiction, is not supported by proper cross empowerment provisions, and fails to comply with mandatory legal provisions. Additionally, there are concerns regarding the expansion of the notice’s scope beyond previous proceedings.

The matter before the court pertains to the challenge against the issuance of a show cause notice dated 18.01.2022 by the tax authorities. The primary argument raised by the petitioner is that the issuance of the notice lacks jurisdiction, contending that under the division of jurisdiction of taxation authorities, the respondents, in this case, are not empowered to issue the notice since the assessment of the petitioner-assessee falls under the purview of the Central Taxation Authority.

A crucial aspect of contention revolves around the concept of cross-empowerment, specifically citing Section 6 of the Rajasthan Goods and Services Tax Act, 2017. The petitioner contends that without proper notification, the State authorities are not authorized to issue show cause notices for tax imposition under the Act of 2017. Additionally, it is argued that cross-empowerment, as outlined in Section 6, is intended for the limited purpose of refunds and not for initiating assessment proceedings.

Further arguments center around procedural irregularities in the issuance of the impugned notice under Section 73 of the Act of 2017. The petitioner highlights discrepancies between earlier proceedings and the impugned notice, specifically regarding the inclusion of discrepancies in Input Tax Credit that were not previously addressed. It is contended that the authorities failed to comply with mandatory provisions, such as Rule 71 of the Central/State Goods and Services Tax Rules, 2017, which require notifying discrepancies to the petitioner before issuing a show cause notice.

The petitioner invokes the principles of natural justice, arguing that the deviation from prescribed procedures amounts to a violation of these principles. Reference is made to relevant case law, such as Hukam Chand Shyam Lal v. Union of India and Others, emphasizing the importance of adhering to legal procedures.

Moreover, the petitioner asserts that the actions of the authorities are in contravention of Rule 142(1)(a) and Rule 142(1A) of the Rules of 2017, as these provisions were not duly complied with. The petitioner also cites a post-legislation circular issued by the GST Council, clarifying certain issues, which, according to the petitioner, underscores the erroneous nature of the authorities’ actions.

In summary, the petitioner contends that the actions of the authorities lack jurisdiction, violate statutory provisions, and contravene principles of natural justice. The argument is supported by references to relevant legal provisions, case law, and procedural irregularities.

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