Dismissed

M/s Krishna Enterprises (Amba 70MM) v. Union of India and 4 Others

Telangana HC10 Mar 2021WP/18660/2020

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging notices issued under the CGST Act by the National Anti-Profiteering Authority and others. Instead of quashing the notices, the Court directed the respondent to give the petitioner an opportunity to submit an explanation, noting that personal appearance was no longer mandatory.

What did the court decide?

Directing the respondent authority to permit the petitioner to submit an explanation to the notice within four weeks and pass a reasoned order.

M/s Krishna Enterprises (Amba 70MM) Vs Union of India… — GST and Indirect Tax | Telangana HC (2021)

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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(Special Original Jurisdiction)

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WEDNESDAY, THE TENTH DAY OF MARCH TWO THOUSAND AND TWENTY ONE

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PRESENT

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THE HON'BLE SRI JUSTICE M. S. RAMACHANORA RAO AND

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THE HON'BLE SRI JUSTICE T. VINOD KUMAR

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WRIT PETITION NO: 18660 OF 2020

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Between:

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I.4/s Krishna Enterprises (Amba 70tt/lt/), D.No. 12-2-82611 Gudimalkapur l\ilehdipatnam, Hyderabad -500 028 Rep. by its Proprietor t.

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AND

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^r,"nnu..X?11{,o*.*

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'1 , Union of lndia, Rep by Department of Revenue Ministry of Finance, New Delhi 2. Directoiate General of Anti-Profiteering, (Central Board of lndirect Taxes and Customs) Department of Revenue, tVinistry of Finance Second Floor, Bhai Vir Singh Sahitya Sadan Bhai Vir Singh Marg, Gole Market New Delhi

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Principal Commissioner of Central Tax, Hyderabad Commissionerate, Hyderabad GST Bhavan Basheerbagh, Hyderabad

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National Anti-Profiteering Authority (GST), (Deptt. of Revenue, Ministry of Finance Government of lndla), 6th Floor, Tower-1 Jeevan Bharti Building, Connaught Place New Delhi^{-1 '10} 001

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Commissioner of Police and Licensing Authority, Hyderabad

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..,RESPONDENTS

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Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be^pleased to issue any appropriate Writ, Order or direction more particularly one in the nature of Writ of Mandamus declaring the Notice / summon in F. No.2201 1/NAA/143/Krishna (Amba 70MM)/2020 dated OGlO3l2020 of the 4th Respondent and consequentially declare the notice F.No.220111APll14512019/S93 DT. 2211012019 of 2nd Respondent as illegal, null, void and arbitrary

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lA NO:^'1 OF 2020

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be^pleased to stay all further proceedings pursuant to the Notice / summon in F.No.2201 1/NAA/143/Krishna (Amba70 MIU) /2020 dated 06/03/2020 of the 4th Respondent, pending disposal of the present Writ Petition

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lA NO: 1 OF 2021:

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Between:

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1, Union of lndia, Rep by Department of Revenue, lr,4inistry of Finance, New Delhi 2. Directorate General of Ant^{j-Profiteering,} (Central Board of lndirect Taxes and Customs) Department of Revenue, Ministry of Finance Second Floor, Bhai Vir Singh Sahitya Sadan Bhai Vir Singh Marg, Gole Market New Delhi

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Principal Commissioner of Central Tax, Hyderabad Commissionerate, Hyderabad GST Bhavan Basheerbagh, Hyderabad

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National Anti-Profiteering Authority (GST), (Deptt. of Revenue, Ministry of Finance Government of lndia), 6th Floor, Tower-1 Jeevan Bharti Building, Connaught Place New Delhi -'1 10 001

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....PETITIONERS/RESPONOENTS 1 TO 4

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AND

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M/s Krishna Enterprises (Amba 70MM), D.No. 12-2-82611 Gudimalkapur Mehdipatnam, Hyderabad -500 028 Rep. by its Proprietor B. Krishna Reddy

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...RESPONOENT/PETITIONER

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Commissioner of Police and Licensing Authority, Hyderabad

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.,.RESPONDENT/RESPONDENT

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim order dated 2111012020 extended time to time 1211112020, O3l12l2O2O, 1711212020 and 2110112021 in lA No 1 of 2020 in WP No 18660 of 2020 and dismiss the Writ Petition

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Counsel for the Petitioner: SRI K. DURGA PRASAD

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Counsel for Respondent Nos. 1 to 3: SRI ZOHEB HUSSAIN, SENIOR STANDING COUNSEL FOR CENTRAL GOVERNMENT FOR SRI B JITHENDER

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SC FOR CENTRAL GOVT. COUNSEL

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Counsel for Respondent No. 4: GP FOR HOME

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The Court made the following: ORDER

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THE HONOURABLE SRT JUSTICE M.S.RAMACHANDRA^RAO AND

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THE HONOURABLE SRI JUSTICE T.VINOD^KUMAR

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WRIT PETITION No.18660 of 2020

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ORDER : (Per Hon'ble Sri Justice^{M.S. Ramachandra Rao)}

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The petitioner has challenged in this^{Writ Petition,a} notice/summon in F.No.220l^{lA.IAA/143/Krishna (Amba70MM) /} 2020 dt.06-03-2020 issued by^{4'r' respondentand also a priornotice} dt.22-10-201g issued by the^{2"'r respondent.}

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The petitioner is the^{proprietorof a movie theater by name} Krishna Theater^(Amba 70MM)^{in Mehdipatnam, Hyderabad.}

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The petitioner has a vaiid^{licence under A.P.Cinemas} (Regulation) Act and Rules, and^{was earlier payingentertainment tax} under Section 5 and 4 of^{the A.P' EntertainmentTax Act. After} introduction of the Goods and^{Services Tax Act,2017 (for short'the} Act'), tax slabs were^{fixed under the said statuteat 18% for tickets} upto Rs. I 00/- and 28nh^{for tickets costingaboveRs.100i-.}

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Therealter fiom^{0 I -01-2019, therewas a reduction in the rate of} tax i.e. in regard to^{tickets uptoRs.l00/-,tax was reducedfrom18%} to l2o/o, and in regard to^{tickets above Rs.l00/-,tax was reducedfrom} 28% to l8o/o.

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i\lSR.J& TVK,J wp_18660-2020

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Letters were issued by 2nd respondent to petitioner on 22-102019, 04-ll-2019 and 20-12-2019 requesting for tumishing of information on suspicion that the benefit of reduction of tax was not being passed on by petitioner to the customers, and contemplating initiation of action against petitioner under Section i7l of the Central Goods and Services Tax Act, 2017. When the petitioner did not respond, the 4'h respondent issued the notice dt.06-03-2020 after obtaining a report dt.03-03-2020 from the 2"d respondent that there is prima facie evidence of profiteering amounting to Rs.7,19, 187/indicating that measures under Section 171 of the said Act need to be taken; and asking the petitioner to attend a hearing in person before the 4th respondent on 24-03-2020 at I I a.m. to show cause why the report dt.03-03-2020 ofthe 2nd respondent should not be accepted and petitioner's liability for profiteering should not be determined under Section 171 of the Act. Copy of the report dt.03-03-2020 was also supplied to the petitioner along with notice d1.06.03.2020..

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However, on account of Covid-l9 pandemic, a lockdown was imposed by the State and Central Governments making it impossible for anybody to travel within the counrry from 22-03-2020.

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Therefore, anticipating that coercive measures would be .initiated against the petitioner if the petitioner did not appear, and also raising certain other contentions, the instant Writ petition has been filed in October, 2020.

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MSR,J& TVK.J wp 18660 2020

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Interim stay was granted ol all further^{proceedings pursuant to} notice/summon dt.06.03.2020 issued by 2nd respondent, pending disposal of the Writ Petition and the said order was extended^from tin-re to time.

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Now, counter-affidavits have been filed by respondent^{Nos.1 to} 4 as well as 5'r'respondent, and I.A.No.l of 2021^is also^{filed to vacate} the said interim order

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10, Sri Zoheb Hussain, learned Senior Standing^{Counsel for Central} Govemment appearing for^{respondentNos.2 to 4 drewour attentionto} Rule Ii3 of the Rules framed under the^{Act,and pointed out that the} said Rules contenrplate eiving an oppoftunity^{of hearing to all} interested parties, il they make a request^{in writing, and there is no} threat of any measures such as arrest of^{petitioner and onlyone of} several consequences mentioned in^{Rule133 follow, in the event} adverse inference is drawn against the^{petitioner by 4th respondent.}

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lf. Having regard 1o the said submission^made by^{Sri Zoheb} Hussain, leamed Senior Standing Counsel^{for CentralGovemment} appearing for respondent Nos.2 to^{4, and also having regard to the fact} that lockdown imposed by the State^{and CentralGovemment has now} been lifted and inter-State travel is^{now possible,and since} vaccination fbr Covid- 19 virus is also being^{administered, and since} personal appearance of the petitioner is not necessary^{having regard to} sub-rule⁽²⁾ ol Rule 133, we dispose^{of tl.ris Writ Petition directingthe}

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MSR,J& TVK,J v/p_18660_2020

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petitioner to submit explanation to the notice dt.06-03-2020 to the 46 respondent within four (04) weeks from today. It is open to the petitioner to take all defences available to him at law in the said explanation, and the 4tr' respondent is directed to consider the explanation submitted by petitioner and pass a reasoned order in accordance with law and communicate it to the petitioner. In the event petitioner seeks a hearing either vir-tually or physically before the 4'l' respondent, such request be considered by 4'r' respondent.

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We make it clear that we have not made any observations on the contentions of either of the parties.

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The Writ Petition is disposed of with the above directions. No costs.

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As a sequel, miscellaneous petitions pending if any, shall stand

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closed.

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Sd/- M. MANJULA ASSISTANT REGISTRAR //TRUE COPY' Gb SECTION OFFICER

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To,

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The Commissioner of Police^{and Licensing Authority,Hyderabad} 2. One CC to Sri K Durga Prasad^Advocate IOPUC] J, One CC to Sri B Jithender,^{SC for Central Government} [OPUC] 4. Two CCs to GP For Home,^{High Court for the State of Telangana.} [OUT] 5. Two CD Copies IVBC

HIGH COURT

MSR,J & TVK,J

DATED: 1010312021

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ORDER

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WP.No.18660 of 2020