Kishore Kumar Aurora v/s Union of India
Introduction
The case of Kishore Kumar Aurora v/s Union of India is a Writ Petition filed to challenge a Show Cause Notice dated 21/2/2020, an original order dated 16/10/2020, and an order in appeal dated 3/8/2021. The main issue in this case was whether the respondent no.2 had the jurisdiction to issue the impugned Show Cause Notice. The petitioner’s counsel argued that the respondent no.2 wrongly assumed that the petitioner’s taxable turnover for the relevant period was above Rs. 20 lakhs, making him liable to be taxed, while the actual turnover was below the threshold.
What is Show Cause Notice Under GST?
A show cause notice is a formal written request issued by a government regulatory body to an individual or business, asking them to provide a satisfactory explanation or justification for a certain action or behavior. In the context of Indirect Taxation in India, a show cause notice under GST may be issued by the GST authorities to a business or individual for various reasons, such as non-compliance with GST laws and regulations, evasion of tax, or other suspected offenses. The purpose of a show cause notice under GST is to give the recipient an opportunity to explain their actions or provide any relevant information or documents that may support their case. The recipient is required to respond to the notice within the specified time frame, which is usually 30 days. If the recipient fails to respond or provide a satisfactory explanation, the GST authorities may proceed to take further action, such as imposing a penalty or initiating legal proceedings.
Facts of the Case:
The petitioner, Kishore Kumar Aurora, was served with a Show Cause Notice by respondent no.2, which claimed that his taxable turnover for the relevant period was Rs. 15, 28,468.00. Based on this assumption, the petitioner’s Chartered Accountant advised him to deposit Rs. 18, 69,400.00 with the respondents. However, the petitioner’s counsel argued that the actual turnover was below Rs. 20 lakhs per annum for the relevant period, and therefore, he was not liable to be taxed.
The respondent no.2 confiscated the petitioner’s goods, particularly tobacco products, and imposed a penalty of Rs. 18, 69,400.00. The petitioner contended that respondent no.2 acted without jurisdiction and authority of law in imposing the penalty and confiscating the goods.
Judgement:
The Court examined the provisions of Section 2(6) and found that the Show Cause Notice, the original order, and the order in appeal were all set aside. The Court ruled in favor of the petitioner and directed the respondents to refund the amount taken, along with interest at the rate of 6% per annum. The interest was applicable from the date of deposit until the amount was paid back. The Court further ordered that the refund process should be expedited and completed within two weeks. The Court also considered the petitioner’s request to unseal his premises, which had been sealed by the respondents. The Court granted most of the reliefs sought by the petitioner, disposing of the petition in the petitioner’s favor.
Observation:
The Court observed that the petitioner had a strong case, as the respondents acted beyond their powers and jurisdiction. The petitioner’s turnover was below the threshold of Rs. 20 lakhs, and therefore, the respondents should not have issued the Show Cause Notice in the first place. The imposition of the penalty and confiscation of goods were unwarranted due to the absence of any case against the petitioner, given his business turnover was below Rs. 20 lakhs.
Conclusion
In conclusion, the case of Kishore Kumar Aurora v/s Union of India resulted in a favorable judgment for the petitioner. The Court ruled in favor of the petitioner, setting aside the Show Cause Notice and related orders, and directed the respondents to refund the amount collected with interest. The Court observed that the respondents acted without jurisdiction and authority of law, and the petitioner’s business turnover was below the taxable threshold, making the case against the petitioner invalid.
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