Home GST GST Authority Can’t Travel Beyond SCN to Levy the Tax Penalty On Assessee

GST Authority Can’t Travel Beyond SCN to Levy the Tax Penalty On Assessee

GST Authority Can’t Travel Beyond SCN to Levy the Tax Penalty On Assessee
Allahabad HC's Order for M/S Associated Switch Gears and Projects Ltd

Authorities couldn’t journey past the present trigger discover to levy the penalty on the taxpayer, Allahabad Excessive Courtroom dominated.

The bench comprising Justice Shekhar B. Saraf acknowledged that,

“At its core, a present trigger discover represents the preliminary step in an administrative or authorized course of, whereby a person or entity is formally apprised of allegations or discrepancies attributed to them. This discover serves as a mechanism to permit the recipient to current their aspect of the story, present clarifications, or rectify any perceived errors earlier than any punitive motion is taken.”

The court docket sees that the problem of the present trigger discover is contemplating the precept of audi alteram partem guaranteeing due course of and equity in proceedings.

On the interception of the applicant was issued an SCN on the premise that the vacation spot the place the car was travelling was not specified within the bill. Nonetheless, the appellate authority saved the order of penalty on the muse that the GST E-way invoice having the products had lapsed. The applicant contested each the penalty order and the order of the primary appellate authority.

The Courtroom established reliance on the choices of the Supreme Courtroom in Commissioner of Customs, Mumbai v. Toyo Engineering Ltd., Commissioner of Central Excise, Bhubaneshwar v. Champdany Industries Ltd and Commissioner of Central Excise, Chandigarh v. Shital Worldwide whereby it has been dominated that the authorities couldn’t transcend the scope of SCN issued by them.

Learn Additionally: Allahabad HC: A Discover Should Be Served on Authorized Consultant of Deceased Earlier than GST Proceedings

The Courtroom adopted {that a} present trigger discover saved the rule of regulation and contained arbitrary apply of energy on the place of the authorities.

“Any motion taken by an authority past the scope outlined within the discover dangers transgressing the boundaries of legality and procedural equity. Such overreach not solely undermines the legitimacy of the authority but in addition compromises the rights of the people or entities concerned, doubtlessly resulting in authorized challenges and erosion of public belief.”

The court docket sees that the necessity to specify all of the allegations within the SCN emphasizes transparency and accountability because the similar permits the taxpayer to supply an knowledgeable reply. Past the realm of the SCN, the authority breaches the precept of particularity and deprives the taxpayer of an opportunity to disclaim the fees dropped in opposition to him.

Courtroom laid on the Allahabad Excessive Courtroom selections in Ramlala v. State of U.P. and Ors. and Jitendra Kumar v. State of U.P. and Anr. to take care of that on the time of the penalty, the council goes past the scope of SCN. Because the applicant didn’t have the prospect to reply the fees directing the levy of the penalty, the identical was a breach of the rules of pure justice.

Subsequently, the penalty order and additional order of the primary appellate authority have been suppressed.


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