HC Directed Dept. to Produce SCN Records for Verification of Reasons to Believe for Notice Issuance

Case Details: Marjit Basumatary v. Union of India - [2023] 151 taxmann.com 423 (Gauhati)

Judiciary and Counsel Details

• • Kalyan Rai Surana, J.
  • A.M. Baruah for the Petitioner.
  • DY. S.G.I. for the Respondent.

Facts of the Case

The petitioner was engaged in works contract services by way of construction of roads and bridges of Government bodies. The department issued show cause notice and alleged that correct turnover in GSTR-3B for financial years 2017-18 and 2018-19 was not declared and tax on machinery rental income and on royalty paid to forest department had not been paid.

The petitioner filed writ petition challenging the legality and validity of show cause notice and submitted that the issue of levy of GST on mining lease and/or royalty paid to the State Government is the subject matter of decision by a larger Bench of the Supreme Court of India.

High Court Held

The Honorable High Court noted that in the instant case, the demand for GST was not only based on mining lease and/or royalty paid to State Government which was before Larger Bench of Supreme Court but also based on other claims. Therefore, it was held that before issuance of notice, the Court was inclined to examine records relating to show cause notice to examine whether ‘reasons to believe’ existed or it was mere pretence. The Court directed department to produce records relating to SCN for perusal of the instant Court, however copy of same was not to be made available to petitioner.