Calcutta High Court stays coercive steps on GST final intimation over jurisdictional and procedural lapses

Background of the dispute

In Chatterjee Constructions Vs State of West Bengal & Ors., the Calcutta High Court examined a challenge to a final intimation issued in GST proceedings, raising significant questions on both jurisdiction and procedural compliance under the West Bengal GST Act, 2017 and corresponding Rules.

The impugned document was a final intimation dated 18 March 2021, issued by the Assistant Commissioner, State Tax, Bureau of Investigation (South Bengal), arrayed as respondent no. 3. The assessee approached the High Court through a writ petition, taking objection to the legality of this intimation and seeking protection from coercive recovery based on it.

Core grounds of challenge

The assessee’s challenge was principally anchored on two major planks:

  1. Lack of jurisdiction of the issuing authority

    The assessee contended that the Assistant Commissioner, State Tax, Bureau of Investigation (South Bengal) did not possess the requisite jurisdiction to issue the final intimation in the form in which it had been issued. The grievance was that the Bureau of Investigation officer, acting as respondent no. 3, had exceeded his legal authority under the West Bengal GST Act, 2017, thereby rendering the impugned intimation without jurisdiction.

  2. Non-compliance with statutory procedure under GST law

    The assessee further asserted that the entire process culminating in the final intimation dated 18 March 2021 suffered from serious procedural defects and was contrary to the mandatory requirements laid down in:

    • Section 61 read with Rule 99 of the West Bengal GST Acts and Rules, and
    • Sections 73, 74, and 75 of the West Bengal GST Act, 2017.

    Specifically, it was argued that:

    • The prescribed procedure for scrutiny of returns under Section 61 and Rule 99 had not been complied with.
    • The adjudication framework under Sections 73 and 74, including issuance of proper show cause notice, opportunity of hearing, and a speaking order, had not been followed.
    • The manner and form in which the final intimation had been issued did not conform to the procedural safeguards envisaged by Section 75.

According to the assessee, these lapses went beyond mere technical irregularities and struck at the root of the validity of the impugned final intimation.

Stand of the State at the interim stage

At the stage when the writ petition came up for consideration, learned counsel appearing for the State respondents was unable to contest or refute the specific allegations advanced by the assessee.

The Court recorded that the allegations regarding lack of jurisdiction and non-observance of statutory procedures were supported by material already on record, which formed part of the writ proceedings. In other words, on a prima facie reading, the pleadings and documents placed by the assessee found no immediate rebuttal from the respondents at that juncture.

Court’s prima facie view

Upon hearing both sides and examining the documentation placed before it, the Calcutta High Court formed a prima facie opinion that:

  • The assessee had made out a sufficiently strong case warranting grant of interim protection; and
  • The questions raised in the writ petition involved substantial issues of jurisdiction and statutory compliance, which could not be decided without calling for a detailed response through affidavits.