2025 (5) TMI 548 - HC - GST

Rejection of reply without the authority of law - alleged undisputed arrears of tax or interest cannot be demand under Chapter XV of the GST Acts when express provisions are available in law in Section 75 (12) of GST Acts - HELD THAT - It is relevant to state that the Amnesty Scheme passed under Section 128 (A) of the CGST Act is for the years 2017-18 2018-19 and 2019-20. Under these circumstances in view of the specific submission made on behalf of the petitioner that they would intend to avail the benefit of Amnesty Scheme it is deemed just and appropriate to set aside the impugned order passed by the 3rd respondent and remit the matter back to the 3rd respondent for reconsideration of the matter afresh by issuing certain directions in accordance with law. Petition allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court are:

(a) Whether the impugned Order-in-Original dated 22.11.2023 passed under Section 73 of the CGST Act, which encompasses multiple financial periods including 2017-18 to 2020-21, is valid and sustainable in law.

(b) Whether the petitioner is entitled to the benefit of the Amnesty Scheme introduced under Section 128(A) of the CGST Act, applicable to the financial years 2017-18, 2018-19, and 2019-20, notwithstanding the impugned order covering those periods.

(c) Whether the impugned notification No. 9/2023 dated 31.03.2023 is ultravires the Constitution of India and the provisions of the CGST Act, 2017.

(d) Whether the impugned order should be quashed and set aside and the matter remitted back for fresh consideration, including passing separate orders for each financial period and allowing the petitioner to avail the Amnesty Scheme benefits.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Validity of the impugned Order-in-Original covering multiple financial periods

The impugned order was passed under Section 73 of the CGST Act, 2017, which deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized. The order covered the financial years 2017-18, 2018-19, 2019-20, and 2020-21.

The Court examined whether passing a consolidated order covering multiple financial years is permissible or whether separate orders should be passed for each period. The petitioner contended that the impugned order is flawed as it lumps together multiple years without considering the applicability of the Amnesty Scheme for certain years.

The Court noted the legal framework under Section 73 and the procedural requirements for issuance of orders. While Section 73 does not explicitly prohibit consolidated orders, the Court emphasized the need for clarity and fairness, especially when different legal provisions (such as an Amnesty Scheme) apply to different periods.

Accordingly, the Court reasoned that passing separate or individual orders for each financial year would ensure proper consideration of the legal provisions applicable to each period and safeguard the petitioner's rights.

Issue (b): Entitlement to Amnesty Scheme benefits for certain financial years

The Amnesty Scheme under Section 128(A) of the CGST Act was introduced with effect from 01.11.2024, allowing taxpayers relief for certain periods, specifically the years 2017-18, 2018-19, and 2019-20.

The petitioner sought to avail the benefit of this scheme for these years, arguing that the impugned order, which includes these periods, did not consider the Amnesty Scheme and is therefore liable to be set aside or modified.

The Court acknowledged that the Amnesty Scheme explicitly covers these years and that the petitioner is entitled to avail its benefits. The Court found merit in the petitioner's submission that the impugned order should be reconsidered to factor in the Amnesty Scheme relief.

The Court thus directed that separate orders be passed for each financial year and that the petitioner be permitted to apply for and avail the Amnesty Scheme benefits for the applicable years.

Issue (c): Validity of impugned notification No. 9/2023 dated 31.03.2023

The petitioner challenged the notification as ultravires the Constitution and the CGST Act. However, the Court did not delve into detailed analysis or express any opinion on this contention in the present order, focusing primarily on the issues relating to the impugned order and the Amnesty Scheme.

Issue (d): Quashing the impugned order and remitting the matter for fresh consideration

Considering the above, the Court found it just and appropriate to set aside the impugned Order-in-Original dated 22.11.2023 and remit the matter to the 3rd respondent for fresh consideration in accordance with law.

The Court directed that the 3rd respondent shall pass separate orders for each financial year, specifically 2017-18, 2018-19, 2019-20, and 2020-21, taking into account the petitioner's entitlement to the Amnesty Scheme for the first three years.

Liberty was reserved to the petitioner to pursue remedies in relation to the period 2020-21, with no opinion expressed on the merits of the contentions relating to that period.

The Court's approach balances procedural fairness, statutory interpretation, and the petitioner's rights under the Amnesty Scheme, ensuring compliance with the legal framework.

3. SIGNIFICANT HOLDINGS

The Court held:

"The impugned Order-in-Original dated 22.11.2023 at Annexure-B passed by the 3rd respondent is hereby set aside."

"The matter is remitted back to the 3rd respondent for reconsideration afresh, in accordance with law."

"The 3rd respondent shall pass separate / individual orders for each of the aforesaid periods i.e., 2017-18, 2018-19, 2019-20, 2020-21, in accordance with law."

"The petitioner is permitted to avail the benefit of Amnesty Scheme for the financial years 2017-18, 2018-19 and 2019-20."

"In so far as the periods 2020-21 are concerned, liberty is reserved in favour of the petitioner to take recourse to such remedies as available in law, including approaching this Court, subsequently and no opinion is expressed on the merits / demerits of the rival contentions."

Core principles established include the necessity for separate adjudication of tax demands for distinct financial years when different legal provisions or schemes apply, and the recognition of the petitioner's right to avail statutory relief schemes such as the Amnesty Scheme under the CGST Act.