Benoy Bhushan Palit Memorial Education Society V/s Deputy Commissioner of State Tax {HIGH COURT OF CALCUTTA} :
Date of Order : 22 May 2024
simplified explanation of the High Court of Calcutta’s ruling in the case of Benoy Bhushan Palit Memorial Education Society v. Deputy Commissioner of State Tax:
Background:
- Benoy Bhushan Palit Memorial Education Society challenged a show cause notice issued on 8th December 2023 and an adjudication order dated 3rd April 2024 under Section 73(9) of the West Bengal Goods and Services Tax Act, 2017 (WBGST Act) and CGST Act for the tax period April 2018 to March 2019.
- The petitioner argued that ordinarily, proceedings for the mentioned tax period couldn’t have been initiated after three years from the due date for filing returns. However, the tax authorities relied on notifications issued by CBIC (Central Board of Indirect Taxes and Customs) to extend the time limit for issuing orders under Section 73(9).
Court’s Decision:
- The High Court considered the jurisdictional issue raised by the petitioner regarding the validity of initiating proceedings beyond the three-year limit.
- The court noted that notifications issued by CBIC extended the time limit for issuing orders under Section 73(9) beyond what was ordinarily permissible under the law.
- Since a prima facie case was made that the notifications might have been improperly relied upon, the court decided to stay the demand created by the adjudication order dated 3rd April 2024 until further orders.
- The court directed the respondents (tax authorities) to file an affidavit-in-opposition to the petition within three weeks and allowed the petitioner to file a reply within two weeks thereafter.
- Acknowledging a similar precedent set in a previous case, the court granted interim relief by staying the demand until the end of September 2024 or until further orders, whichever is earlier.
- The matter was listed for a hearing in the combined monthly list of August 2024 to further examine the issues raised.
Conclusion:
- This ruling highlights the court’s scrutiny over the extension of statutory time limits through notifications and ensures that jurisdictional issues are thoroughly considered before allowing tax demands to proceed.
- It emphasizes the principle of fairness and the need for proper legal grounds when extending deadlines that affect taxpayers’ rights and liabilities under GST laws.
Relevant Sections : 168A of CGST Act.
