Sri Govindaraj vs. Assistant Comnmissioner Of State Tax Near Indus School

Held

The Court held that the subsequent development of the final order of confiscation and imposition of tax, penalty, and fine had rendered the initial challenge to the show-cause notice infructuous. The Court reasoned that the petitioners' grievance could now be addressed through the appellate mechanism. The petitioners were granted liberty to assail the final order before the appellate forum. The Court directed the respondent to upload the final order on the official website forthwith to enable the petitioners to pursue their appellate remedy. The Court clarified that the petitioners would be at liberty to raise all available issues, including the validity of the show-cause notice, during the appeal proceedings. The issue of whether the initial show-cause notice was validly issued was not decided on merits, as the subsequent order made it infructuous.

Facts

The petitioners assailed a GST MOV 10 Notice dated 03.02.2021, seeking the release of seized goods (105 kgs of silver biscuits and kacha silver articles) and cash amounting to Rs. 2,05,000/-. The goods were intercepted by police on 03.02.2021 while being transported without requisite invoices/challans. The tax authorities subsequently issued the show-cause notice. The petitioners participated in the proceedings before the Assistant Commissioner (ST), Kurnool-II Circle, but also filed a writ petition challenging the show-cause notice, alleging non-service of detention orders (GST MOV-6) and specification of tax (GST MOV-7). The department, in its counter, admitted typographical errors regarding detention order particulars but asserted no jurisdictional error. It also informed the court that a final order (No. 001/2020, dated 08.03.2021) had been passed, directing confiscation of goods and imposing tax, penalty, and fine totaling Rs. 39,20,000/-.

Key Issues

1. Whether the writ petition challenging the GST MOV 10 show-cause notice is maintainable in light of the subsequent passing of the final order of confiscation and imposition of tax, penalty, and fine? Petitioner's contention: The petitioners argued that the writ petition was maintainable as they had challenged the initial show-cause notice on the grounds of procedural irregularities, specifically the non-service of mandatory detention orders (GST MOV-6) and specification of tax (GST MOV-7). They also submitted that they were unable to file an appeal against the final order as it had not been uploaded to the official portal. Revenue's contention: The department contended that while there were inadvertent typographical errors regarding the detention order particulars, the factual matrix provided reasonable belief of tax evasion, thus validating the issuance of the show-cause notice. They further submitted that a final order had been passed, rendering the challenge to the show-cause notice infructuous.