TMI Blog2023 (6) TMI 1300X X X X Extracts X X X X X X X X Extracts X X X X ..... ature is to make Section 74 bound by Section 61 and 65 alone, that fact would have been clearly depicted in Section 74. In Doypack Systems Pvt Ltd. V. Union of India [ 1988 (2) TMI 61 - SUPREME COURT] the Apex Court observed thus In the present case as already stated supra the phrase where it appears is a free, unfettered and unbound usage made by legislature and therefore in our view, the source for the proper officer to proceed under this provision can be held to be either under Section 61 or 65 or some other information but cannot be constricted to Section 61 or 65 alone to reach Section 74 cannot be accepted. The decision of High Court of Madras (Madhurai Bench) in Vadivel Pyrotech Private Limited s case [ 2022 (10) TMI 784 - MADRAS HIGH COURT] cited by the petitioner can be distinguished on facts. In that case the writ petitioner filed his return for the Assessment Year 2018-19 and later it was taken up for scrutiny by the proper officer u/s 61 of Tamil Nadu Goods and Services Taxes Act (TNGST Act) by issuing notice in Form ASMT 10 dated 22.12.2021 by pointing out certain discrepancies between GSTR3B GSTR 1 and GSTR 2A returns filed by the petitioner calling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thirmai Pratapa For the Petitioners : B. Abhay Siddanth Mootha For the Respondents : learned Government Pleader for Commercial Taxes Sri Y.N. Vivekananda ORDER: PER HON BLE SRI JUSTICE U. DURGA PRASAD RAO Petitioner prays for writ of mandamus declaring the show cause notice dated 06.07.2022 in Form GST DRC-01-A issued under Section 74(1) r/w Rule 142(1)(a) of A.P. Goods and Services Act, 2017 (for short APGST Act) by the 3rd respondent and consequent attaching of bank account of the petitioner maintained with 4th respondent bank without at first issuing notice under section 61 of APGST Act calling for explanation of the petitioner and even without passing final assessment order u/s 74 of APGST Act is illegal, arbitrary and without jurisdiction and contrary to the provisions of APGST Act and consequently to set aside the show cause notice dated 06.07.2022 and direct the respondents to release the petitioner s bank account. 2. Petitioner s case succinctly is thus: (a) Petitioner was trading in groundnut and registered under the rolls of 3rd respondent having GST identification No.37DPKPB1913PIZM. The petitioner was regularly filing return till August, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 83 of APGST Act by the Commissioner of Taxes only. Such a provisional attachment order was also not passed and communicated to the petitioner. It is not known whether any final assessment order has been passed by the 3rd respondent. (e) Further case of the petitioner is that as per AP GST Act, GST is a self assessment regime where under, every taxable person has to submit his monthly /annual income in relevant forms, basing on which the extent of tax liability will be determined by the authorities. If the proper officer comes to opinion that return filed by the assessee was faulty or there was discrepancy or he claimed excessive ITC than entitled or claimed fraudulent ITC, the proper officer has the power to scrutinize returns u/s 61 of the APGST Act and issue notice to the taxable person to furnish explanation. On receiving explanation the proper officer shall pass order either accepting or rejecting the return filed by the assessee. If satisfactory explanation is not provided by the assessee, proceedings under Section 73 or 74 of the APGST Act can be initiated. In the instant case even without calling for any explanation from the petitioner in terms of Section 61 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 61 of the Act will be issued. On the other hand, where ITC has been wrongly availed or utilized by reason of fraud or any wilful mistake or suppression of facts to evade tax, then the notice u/s 74(1) will be issued as to why the assessee should not pay amounts specified in the notice along with the interest and penalty. (e) It is further submitted that the petitioner before vacating the register premises did not inform to the proper officer and not fulfilled obligation of filing closing letter and also not filing return as per Section 45 r/w Rule 81 of the APGST Act, 2017. (f) Finally it is submitted that it would only to protect revenue of the State the impugned provisional attachment order was issued. Respondent thus prayed to dismiss the writ petition. 4. Heard arguments of learned counsel for the petitioner Sri B. Abhay Siddanth and learned Government Pleader for Commercial Taxes Sri Y.N. Vivekananda. 5. The main plank of argument of learned counsel for the petitioner is that in terms of Section 61 of APGST Act, the proper officer has to first of all conduct scrutiny of return submitted by the petitioner for the relevant period with reference to records produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted the discrepancies, if he fails to rectify such discrepancies, then the proper officer may initiate appropriate action u/s 65 or 66 or 67 or proceed to determine tax and other dues u/s 73 or 74. Learned Government Pleader would strenuously argue that in the circumstances stated in Section 61, the proper officer may treat un-answered or un-rectified discrepancies as willful mis-statements or suppression of facts to evade tax or wrongly availed ITC by fraud in terms of Section 74 and may proceed further and issue show cause notice as to why action cannot be initiated. Learned Government Pleader would thus submit that one of the channels to initiate proceedings u/s 74 is to commence the scrutiny proceedings u/s 61 and culminate with Section 74. However, proceedings u/s 61 is not the only way to lead to Section 74. On the other hand, learned Government Pleader would argue, in a given case, basing on the information available, if it appears to the proper officer that the registered person has not paid the due tax or short paid or tax was erroneously refunded or ITC was wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts was made to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Then Sub Section 9 of Section 39 gives scope for rectification of defects occurred in the returns. It lays down that if a registered person after furnishing return discovers any omission or incorrect particulars thereon other than as a result of scrutiny audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars within time permitted, subject to payment of interest. Thus Section 39 speaks about filing of monthly return and rectification of mistakes by self-disclosure of the registered person. (d) Then Section 61 of APGST Act speaks of scrutiny of returns. It should be noted that since self-assessment method is followed under this Act, the department sometimes may take up random scrutiny of returns. In that context Section 61 says the proper officer may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and if he notices any discrepancy, he will seek explanation from the registered person. In case explanation is found acceptable no further action be initiated. However, in case no satisfactory explanation is furnished within the stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geable with the tax to show cause as to why he should not pay the amounts specified in the notice. 9. It should be carefully observed that Section 74 starts with the clause where it appears to the proper officer that any tax has not been paid . The word appears has a wider amplitude subsuming in it not only Section 61 and 65 but also any other credible information from a different source. If the intendment of legislature is to make Section 74 bound by Section 61 and 65 alone, that fact would have been clearly depicted in Section 74. However, we will not find any specific reference to Section 61 or 65 in Section 74 except the usage where it appears (a) It should be noted that literal or strict interpretation is essential for fiscal, tax and penal laws and the Court cannot abridge or elongate the meaning of those statutory provisions, particularly, when the language employed therein is plain, unambiguous and simple. The apex Court has reiterated the strict rule of interpretation in a slew of decisions. In Union of India v. Deoki Nandal Aggarwal [AIR 1992 SC 96 = MANU/SC/0013/1992] the apex Court observed thus: 14.xxxxx. It is not the duty of the Court either to enl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinguished on facts. In that case the writ petitioner filed his return for the Assessment Year 2018-19 and later it was taken up for scrutiny by the proper officer u/s 61 of Tamil Nadu Goods and Services Taxes Act (TNGST Act) by issuing notice in Form ASMT 10 dated 22.12.2021 by pointing out certain discrepancies between GSTR3B GSTR 1 and GSTR 2A returns filed by the petitioner calling upon him to pay the tax of Rs.13,54,250/- along with interest. The petitioner submitted his explanation in Form ASMT 11 by furnishing relevant details. Then his grievance is that six months thereafter respondent officer enquired the petitioner over pone as to whether the petitioner had paid the tax, interest and penalty demanded vide order dated 09.05.2022. Till then except issuing notice u/s 61 of the Act no further proceedings were taken up to his knowledge and no order was passed. Thereafter on enquiry by the petitioner, he came to know that an order dated 09.05.2022 was passed by the respondent and summary notice in GST DRC 01 and order in GST DRC 07 were uploaded in the GST portal. In GST DRC 01 show cause notice certain defects/ discrepancies were pointed out which are different from the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons/ reply to the notice, at this juncture it cannot be concluded that the attachment is illegal. 13. Thus on conspectus of facts and law, we find no merits in the writ petition. However, since it is the submission of the petitioner that he received impugned show cause notice only on 16.07.2022 i.e., after expiry of time granted for submitting explanation which was dated 13.07.2022 and though this fact was brought to the notice of the 3rd respondent he refused to receive the explanation and relevant documents, we, in the interest of justice, considered it apposite to permit the petitioner to submit his explanation along with relevant material. 14. Accordingly, this writ petition is disposed of giving liberty to the petitioner to file his explanation / objections along with the relevant materials before the 3rd respondent within three (3) weeks from the date of receipt of copy of this order, in which case the 3rd respondent shall receive the said explanation and material and consider the same after affording an opportunity of personal hearing to the petitioner and pass appropriate order in accordance with governing law and rules expeditiously. No costs. 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