Calcutta High Court (Appellete Side)
Murshidabad Flour Mill Private Limited ... vs Union Of India & Ors on 19 January, 2021
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
42
19.01.2021
Ct. No.23
pg.
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
(Via Video Conference)
WPA 11700 of 2020
Murshidabad Flour Mill Private Limited & Anr.
Vs.
Union of India & Ors.
Mr. Amales Ray
Mr. Sabhro Kanti Roy Chowdhury
Ms. Mousumi Bhowal
... For the Petitioners
Mr. Siddhartha Lahiri
Ms. Rini Bhattachyarya
... For Union of India
Mr. Somnath Ganguli,
Ms. Manasi Mukherjee
... For the respondent nos.3, 7 and 10
Mr. Abhratosh Majuder, Ld. AAG Md. T.M. Siddiqui Mr. D. Ghosh .... For the State Mr. Sandip Chorasia Ms. Sukalpa Seal ... For the respondent no.6 Two supplementary affidavits respectively affirmed on 11th January, 2021 and 15th January, 2021 by the petitioners are taken on record.
After hearing the parties and considering the materials on record, it appears that the core issue in this petition relates to the dispute as to the classification of the entry under which the transaction made by the petitioner no.1 with the State of West Bengal will fall. 2 On perusal of the summons dated 14th December, 2020 issued against Baijnath Mittal under Section 70 of the Central Goods and Service Tax Act, 2017 (hereinafter referred to as the "CGST Act"). It appears that the said Baijnath Mittal was directed to provide evidence, tender statement and produce documents on 22nd December, 2020 before Ravindra Kumar Malik, Senior Intelligence Officer, who is conducting an inquiry about evasion and/or non-payment of GST by M/s. Baba Lokenath Flour Mills Pvt. Ltd., M/s. Murshidabad Flour Mills Pvt. Ltd., the petitioner no.1, M/s. Akash Foods Products Pvt. Ltd. and M/s. Haldia Agro Pvt. Ltd. The said Baijnath Mittal, however, did not appear on 22nd December, 2020. Another summons issued on 7th January, 2021 has been served on Samrat Mukherjee, the Director of M/s. Murshidabad Flour Mills Pvt. Ltd. directing him to give evidence and/or produce documents or things as indicated in Annexure 'A' to the said summons on 19th January, 2021. Today, is the date of appearance fixed for Samrat Mukherjee. The said Samrat Mukherjee has not appeared before the concerned officer at New Delhi in response to the summons.
According to the State GST authorities, the transaction can either fall under serial no.3A of Chapter 99 wherein the imposition of service tax is 'nil' or under entry 26 of Heading 9988 wherein the maximum levy is 5% comprising of 2.5% under SGST and 2.5% under 3 CGST. The maximum of 5% has been realised from the petitioner no.1, according to the State authorities.
The Central GST authorities, however, contend that the transaction comes within Entry No.26 under Heading 9988 of Notification No.11/2017 wherein imposition of GST has to be at the rate of 18%. Contending that 18% is the applicable rate, the Central GST authorities have alleged that there is an evasion and/or non-payment of GST and, as such, the Central GST authorities have proceeded to hold an inquiry under Section 70 of the CGST Act. The summons referred to hereinabove is in connection with the said inquiry.
At this stage, the only order that can be passed is directing the petitioners to cooperate with the Inquiry Officer by producing the documents as required for the purpose of inquiry. The petitioners are directed to produce those documents in terms of Annexure "A" to the summons dated 7th January, 2021 which are under the possession and control of the petitioners on 1st February, 2021 at 10 a.m. The petitioners should clearly indicate which are the documents out of the said list that are not in their possession or control. The production of the documents may be by either of the two named persons in the summons or through any other responsible officer of the petitioner no.1. The person who will produce the document shall be released after prima facie scrutiny of the documents on the date of production. 4
The Inquiry Officer after detailed scrutiny of the documents produced will be free to issue a further summons for any other document which he feels necessary to be produced for the purpose of inquiry. The petitioner no.1 and/or its officers shall be bound to produce such further documents which are under their possession and control. After the entire exercise as to production of the documents necessary for inquiry is complete, the Inquiry Officer may, if require, call for the attendance of the person or persons associated with the petitioner no.1 for giving evidence and/or recording of statement. This modification as to the procedure of enquiry is made owing to the present prevailing situation.
The writ petition is adjourned till 31st March, 2021 with liberty to the parties to mention in case of any difficulty.
(Arindam Mukherjee, J.)