Point of Law - Section 74 of the CGST Act deals with determination of tax not paid, or short paid, or erroneously refunded, or input tax credit wrongly availed, or utilized by reason of fraud, or any willful misstatement, or suppression of facts.

ORDER :

Ujjal Bhuyan, J.

Heard Mr. Srinivas Chaturveduala, learned counsel for the petitioner and Mr. B.Narasimha Sarma, learned Senior Standing Counsel for Central Goods and Services Taxes.

2. By filing this petition under Article 226 of the Constitution of India, petitioner has challenged legality and validity of the show cause notice dated 12.04.2021 issued by Additional Commissioner of Central Taxes and Customs, Hyderabad, Audit –I Commissionerate, Hyderabad.

3. By the impugned show cause notice, Additional Commissioner i.e., the respondent No.4 has called upon the petitioner to show cause as to why the product manufactured and supplied to various customers during the period from July, 2017 to March, 2019 should not be classified under the tariff heading 21069099 of Customs Tariff Act, 1975 made applicable to the Central Goods and Services Tax Act, 2017 (briefly ‘the CGST Act’ hereinafter).

3.1. By the said notice, petitioner has been called upon to show cause as to why an amount of Rs.79,95,295.00 (Rupees seventy nine lakhs, ninety five thousand, two hundred and ninety five only) being the CGST not paid, should not be demanded under Section 74(1) of the CGST Act.

3.2. That apart, petitioner has also been called upon to show cause as to why an amount of Rs.3,08,73,057.00 (rupees three crores, eight lakhs, seventy three thousand, and fifty seven only) being the Integrated Goods and Services Tax (IGST) not paid, should not be demanded and recovered from the petitioner under Section 74(1) of the CGST Act read with Section 20 of the Integrated Goods and Services Tax Act, 2017 (briefly ‘the IGST Act’).

3.3. In addition, petitioner has been show caused as to why interest and penalty under the provisions of the aforesaid Acts should not be levied and imposed.

3.4. The impugned show cause notice has been issued under Section 74(1) of the CGST Act.

4. Basic contention of learned counsel for the petitioner is that it is the sine qua non that the officer who issues the show cause notice under Section 74(1) of CGST Act, has to be perforce a ‘proper officer’. He has referred to various provisions of the CGST Act and the documents annexed to the writ petition to contend that Additional Commissioner is not a ‘proper officer’ having jurisdiction to issue the impugned show cause notice. In support of his submissions, learned counsel for the petitioner has also placed reliance on a recent decision of the Supreme Court in CANON INDIA PRIVATE LIMITED vs. COMMISSIOENR OF CUSTOMS, AIR 2021 SC 1699 which was in the context of the Customs Act, 1962.

5. On the other hand Mr. B. Narasimha Sarma, learned Senior Standing Counsel for respondents has also referred to various provisions of the CGST Act, as well as circular dated 05.07.2017 of the Central Board of Excise and Customs (briefly ‘the Board’ hereinafter), and circular dated 09.02.2018 of the said Board, to contend that Additional Commissioner i.e., the respondent No.4 is indeed the ‘proper officer’ in the present case, and therefore, there should be no interference with the impugned show cause notice on the ground that the notice issuing authority is not the ‘proper officer’.

6. We have given our due consideration to the respective submissions made at the Bar.

7. As already pointed out earlier, the impugned show cause notice has been issued by respondent No.4 alleging contravention of various provisions of the CGST Act, as well as the IGST Act, where-after, petitioner has been called upon to show cause as to why the quantified amount of CGST as well as Telangana Goods and Services Tax, besides IGST should not be recovered from the petitioner; in addition, as to why interest and penalty should not be levied and imposed on the petitioner.

8. Section 74 of the CGST Act deals with determination of tax not paid, or short paid, or erroneously refunded, or input tax credit wrongly availed, or utilized by reason of fraud, or any willful misstatement, or suppression of facts.

8.1. As per sub-section (1) thereof, wh