Case Details: Sri Ram Stone Works Versus State of Jharkhand (2025) 30 Centax 196 (Jhar.)
Judiciary and Counsel Details
- M.S. Ramachandra Rao, CJ. & Deepak Roshan, J.
- S/Shri Sumeet Kumar Gadodia, Mrs Shilpi Sandil Gadodia, Ranjeet Kushwaha, Ms Shruti Shekhar, Ms Sanya Kumari & Ms Nidhi Lall, Advs. for the Petitioner.
- S/Shri 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 for the Respondent.
Facts of the Case
The petitioners, registered dealers engaged in the sale of stone boulders and stone chips, were issued notices in Form GST ASMT-10 under Section 61 of the Jharkhand GST Act. The notices did not point out discrepancies in the returns filed by the petitioners but instead compared the sale price of goods declared in their returns with the prevailing market price, alleging under-valuation. The petitioners contended that such a comparison was beyond the scope of scrutiny under Section 61, which is limited to detecting discrepancies in the returns themselves.
Despite some petitioners submitting replies to the notices, fresh notices were issued on similar grounds. Aggrieved by these actions, the petitioners filed writ petitions challenging the jurisdiction of the authorities in issuing such notices under Section 61.
High Court Held
The High Court allowed the writ petitions, holding that the object of Section 61 is to enable the proper officer to scrutinise returns and point out discrepancies therein, not to conduct a market price valuation. It was observed that initiating proceedings under Section 61 merely on the basis of a difference between the sale price and market price, without alleging the transactions to be sham or fraudulent, was beyond jurisdiction and contrary to law.
Accordingly, the impugned notices were quashed. However, the Court clarified that if there are genuine discrepancies in the returns, the authorities are at liberty to issue fresh notices confined to those discrepancies, but no proceedings can be initiated solely on the ground of price variation from market value.
