SCN Can Be Issued by GST Authority Even With Regard to Dealings of Company in Other States | HC

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GST jurisdictional error

Case Details: Ethos Limited v. Additional Commissioner, CGST Audit - [2024] 167 taxmann.com 122 (Punjab & Haryana)

Judiciary and Counsel Details

  • Sanjeev Prakash Sharma & Sanjay Vashisth, JJ.
  • Sujit Gosh, Sr. Adv., Abhinav Sood, Ms Mannat Waraich, Ms Anishka Aggarwal, Ms Anmol Gupta, Sayyam Garg & Jaywardhan, Advs. for the Petitioner.

Facts of the Case

The Petitioner challenged the SCN issued by the GST authorities under Section 74 of the Central Goods and Services Tax Act, 2017 (‘CGST’), contending that the notice was issued by the State GST officer of Punjab, while the supply had taken place not only in Chandigarh but also in other states. The petitioner argued that there was a jurisdictional error in issuing the notice, as the supply occurred in multiple states, including Assam, New Delhi, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal.

The petitioner claimed that the notice had been issued erroneously by the Punjab GST officer, who assumed jurisdiction over supplies made in other states, and that they had already paid tax in these other states. Therefore, they contended that the Punjab GST officer did not have the authority to demand tax or initiate proceedings in this matter.

High Court Held

The High Court rejected the petitioner’s claims, stating that the SCN was based on an audit report for the periods 2017-18, 2018-19, and 2019-20, conducted under Section 65 of the CGST Act. According to Sections 4, 5, and 6 of the CGST Act, the powers of State GST officers and Central GST officers are the same. Once a notice is issued by a State GST officer, no other officer from another state can initiate proceedings on the same subject matter. The court also noted that the petitioner had not submitted any reply to the SCN and had instead directly approached the court.

Therefore, the court held that there was no jurisdictional error in the issuance of the SCN by the Punjab GST officer, and it allowed the petitioner to present its objections and arguments in response to the SCN before the authority, who would then consider and pass appropriate orders.

List of Cases Reviewed

  • Stalwart Alloys India Pvt. Ltd. v. Union of India & Ors., CWP No. 1661 of 2022, decided on 28-8-2024, relied on.

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