Proper officer has no jurisdiction to issue SCN on a person whose taxable turnover is less than threshold limit: Delhi HC

Recently, in the case of Kishore Kumar Arora v. Union of India 2022, the High Court has held that the proper officer has no jurisdiction to issue SCN on a person whose taxable turnover is less than threshold limit.

 

Let us have a short overview of the case:

1. The petitioner was engaged in business of tobacco products.
2. A show-cause notice was issued against the petitioner and based on an incorrect advice rendered by the petitioner’s Chartered Accountant, it deposited amount determined in the notice.
3. It filed writ petition against the notice on the ground that the show cause notice issued, order-in-original and order-in-appeal passed were outside the jurisdiction of proper officers.
4. The Honorable High Court observed that the taxable turnover of petitioner after excluding taxes and cesses was less than threshold limit of Rs. 20,00,000 fixed for tobacco products and the same was evident from the annexure-1 appended to impugned notice.
5. Therefore, the concerned officer did not have jurisdiction to issue show cause notice or pass orders as the taxable turnover was less than the threshold limit.
6. Thus, the impugned show cause notice, order-in-original and order-in-appeal were set aside and the department was directed to refund amount deposited along with interest at 6%.