M/S Rajkonwar And Sons And Anr vs. The Union Of INDIA And 6 Ors

Held

The Court held that the challenge to the show cause notice dated 01.04.2022 had become infructuous due to the subsequent passing of the Order-in-Original dated 12.02.2026. Therefore, the reliefs sought in the writ petition concerning this notice could not be granted. The Court further held that the collateral challenge to the Order-in-Original dated 12.02.2026 via an interlocutory application was misconceived, as there was no jurisdictional error committed by the Proper Officer in passing the said order. The Court acknowledged that the petitioners had approached the court on mistaken legal advice and had been diligently pursuing the proceedings. Consequently, the Court granted liberty to the petitioners to avail their appellate remedy under Section 107 of the CGST Act against the Order-in-Original dated 12.02.2026. The Appellate Authority was directed to consider the appeal on merits without insisting on the question of limitation, provided it was filed within 30 days from the date of the order.

Facts

The petitioners, M/s Rajkonwar and Sons and its proprietor Sanjib Rajkonwar, challenged a show cause notice dated 01.04.2022 issued under Section 74 of the Assam Goods and Service Tax Act, 2017 (AGST Act). Initially, this Court granted interim protection against coercive action. Subsequently, a show cause notice dated 23.09.2025 was issued under Section 74 of the Central Goods and Service Tax Act, 2017 (CGST Act) by respondent No.3. Following this, respondent No.3 passed an Order-in-Original dated 12.02.2026, demanding Rs.1,36,96,200/- as short-paid tax, interest, and a penalty of Rs.1,36,96,200/- under Section 74(9) of the CGST Act and AGST Act. This Order-in-Original was collaterally challenged in the present writ proceeding via an interlocutory application, despite the availability of an appellate remedy under Section 107 of the CGST Act.

Key Issues

1. Whether the challenge to the show cause notice dated 01.04.2022 issued under Section 74 of the AGST Act has become infructuous in light of the subsequent Order-in-Original dated 12.02.2026 passed under the CGST Act? The petitioner argued that the initial challenge was valid, and the subsequent order should not render their petition moot. The revenue contended that the original challenge was superseded by the later order. 2. Whether the collateral challenge to the Order-in-Original dated 12.02.2026 by way of an interlocutory application in a writ petition is maintainable, considering the statutory remedy of appeal under Section 107 of the CGST Act? The petitioner admitted to approaching the court on mistaken advice and sought relief due to the expiry of the limitation period for appeal. The revenue argued that the writ petition was misconceived, and the petitioner should have availed the appellate remedy. The court also considered whether there was any jurisdictional error in the Order-in-Original.