Jharkhand High Court: In a series of writ petitions filed against the GST-ASMT-10 notices issued under Section 61 of Jharkhand Goods and Services Tax Act, 2017 (‘JGST Act’) to the petitioners for selling their goods at prices lower than the prevalent market prices, the Division Bench of M.S. Ramachandra Rao, C.J. and Deepak Roshan, J*., quashed the notices holding that no action under JGST Act can be taken merely because of difference in transaction value at which the petitioners have sold the goods with that of prevalent market value of goods.
Background
The petitioners are working as mining lessees/dealers, registered under the provisions of the JGST Act, engaged in the business of selling stone boulders, stone chips and other related goods. Notices were issued to the petitioners under Section 61 of the JGST Act, stating that they have sold stone boulders/stone chips at prices less than the prevalent market price and were accordingly directed to show cause as to why not the proceedings under Section 73 or 74 of the JGST Act be initiated against them.
The petitioners in their reply to the said notices stated that the notices under Section 61 of the JGST Act read with Rule 99 of Jharkhand Goods and Services Tax Rules, 2017 (‘JGST Rules’) were limited to discrepancies occurring in the returns and the actions of the petitioners selling their goods at prices less than the market prices were outside the purview of Section 61 of the JGST Act. Subsequent notices in Form GST ASMT-10 were issued again. All these notices were challenged by the petitioners in the present writ petitions.
Issue
Whether GST-ASMT-10 notices issued by respondents purporting to invoke power under Section 61 JGST Act by alleging that petitioners, in their returns filed under the Act, quoted lower market price than the actual market price and asking the petitioners to explain the same, are wholly without jurisdiction and beyond the scope of Section 61 of the Act since the issue raised does not relate any discrepancy in the returns filed by petitioners.
Analysis and Decision
The Court, after pursuing Section 61 of the JGST Act, noted that the provisions are set out with a clear objective to enable an Assessing Officer to point out the discrepancies and errors that occur while filing of a return by a registered person with that of the related particulars. The Court further noted that if despite pointing out the discrepancies the registered person does not take any corrective measures then appropriate action can be taken by the proper officer under Sections 65 to 67 and 73 or 74 of the JGST Act.
The Court noted that under the scheme of the GST Act, three separate enabling provisions are notified:
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At the preliminary stage of filing a return, the scrutiny provision under Section 61
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At the investigation stage, the investigation provisions from Sections 65 to 69 and Section 71
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At the adjudication stage, the adjudicatory provisions Sections 73 and 74
The Court observed that in the present cases, while issuing notices under Section 61 of the JGST Act the competent officer had embarked upon the exercise of comparing the selling prices of stone boulders/stone chips with their prevalent market prices. No discrepancies were pointed out in the returns filed by writ petitioners. The petitioners were asked to show cause why proceedings should not be initiated against them for recovery of tax and dues.
The Court opined that notices issued comparing the selling prices of the petitioners’ goods with that of the prevalent market rates, were issued without jurisdiction and were beyond the scope of Section 61 of the JGST Act. The Court further stated that unless it is shown that the sale transactions are sham, the mere fact that the goods were sold at concessional rates would not entitle the Revenue to assess the differences in the market prices and the price paid by the purchaser as transactional value.
The Court for the aforesaid reasons quashed the notices under Section 61 of the JGST Act issued to the respective petitioners holding them to have been issued without jurisdiction.
[Sri Ram Stone Works v. State of Jharkhand, W.P. (T) No. 5535 of 2024, decided on 09-05-2025]
*Judgment Authored by: Justice Deepak Roshan
Advocates who appeared in this case :
For the petitioners: Sumeet Kumar Gadodia, Shilpi Sandil Gadodia, Ranjeet Kushwaha, Shruti Shekhar, Sanya Kumari, Nidhi Lall, Advocates
For the respondents: Sachin Kumar, A.A.G.-II, Ashok Kumar Yadav, Sr. S.C.-I, Piyush Chitresh, A.C. to A.G. Gauraav Raj, A.C. to A.A.G.-II, Aditya Kumar, A.C. to Sr. S.C.-I, Sahbaj Akhtar, A.C. to A.A.G.-III
