The Andhra Pradesh High Court observed that the Scrutiny of Returns not an essential condition for initiating proceedings to demand tax under Andhra Pradesh Goods and Services Act, 2017 (APGST Act).
The petitioner, M/s Devi Traders, was trading in groundnut and was regularly filing return till August, 2019 and when the petitioner suffered huge loss, he wound up his business in August, 2019 and consequently his GST registration was cancelled w.e.f August, 2019.
The petitioner’s case is that he received above show cause notice on 16.07.2022 i.e., after the expiry of time granted for submitting explanation. Therefore, the petitioner personally approached the GST Department.
The petitioner brought to the notice of the Department that all the business transactions of the petitioner firm were covered by e-way bills generated for each supply with the vehicle numbers and concerned locations and the purchasers were genuine traders situated in the State of Telangana and supplies were made to them during the course of inter-state supply and that he has not committed any fault. The Department however, informed the petitioner that the final assessment order would be issued in due course.
The petitioner’s grievance is that though final assessment order was not yet passed, in the meanwhile, the salary account of the petitioner was attached and from out of the salary credited to the said account, amounts are being deducted towards recovery of the tax amount. Such recovery shall not arise till passing of the final assessment orders but the attachment was made prior to the final assessment order which is a provisional attachment. A provisional attachment can be made under Section 83 of APGST Act by the Commissioner of Taxes only. Such a provisional attachment order was also not passed and communicated to the petitioner.
The division bench of Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa said, “Sections 73 and 74 of APGST Act are not controlled by section 61 as reference to the same is absent. Section 74 uses “where it appears” conferring wide scope as information may be from any credible source. Proper officer may proceed under Section 74 of APGST Act based on action under Section 61 of APGST Act on scrutiny of returns or section 65 on audit or some other fact.”
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