Notice/Order under section 74 cannot be initiated once proceedings under section 61 have been dropped. - Punjab and Haryana High Court
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GST – Scrutiny of return, Notice under Section 61, initiation of proceedings under 74 of CGST Act, 2017 - Scrutiny of ITC claimed on purchases from firms whose registrations had been cancelled - petitioner submitted its reply was found satisfactory and no further action was to be taken - later Dept issued notice under Section 74 for the same reasons, and an order was passed imposing a penalty and interest -
Whether the proceedings under Section 74 could have been initiated after the proceedings under Section 61 of the CGST Act, 2017 were dropped – HELD - once the proceedings under Section 61 were dropped, the Proper Officer could not have initiated proceedings under Section 74 as it would amount to a contradiction - the proceedings under Section 74 initiated after the order under Section 61 were dropped were vitiated in law.
Further, the provisions of Section 75(4) of the CGST Act are mandatory and the petitioner should have been provided an opportunity of personal hearing - the order passed under Section 74 and the notice issued under Section 74(1) are quashed and set aside – the writ petition is allowed.
Title: M/s J.S.B. Trading Co. vs State of Punjab
Court: Punjab and Haryana High Court
Dated: 04-Nov-2024
Citation: CWP-14843-2023 (O&M)
Other Citations: 2024-VIL-1190-P&H :: 2024-TIOL-1936-P&H-GST
Abhishek Raja "Ram"
@abhishekrajaram
MEC, STBA Delhi || Speaker and Author on GST. Life dedicated towards Tax and Economic Reforms & Simplification