M/S Suprada Construction Company vs. The Commissioner

Held

The Court held that entertaining a writ petition challenging a show cause notice, rather than an adverse order, was not proper at this stage. The Court reasoned that the petitioner had not yet availed the opportunity to reply to the show cause notice and present their case before the respondent authority. Therefore, exercising discretion under Article 226 of the Constitution of India to consider the show cause notice on merits would be inappropriate. The petitions were dismissed as not maintainable. However, considering the petitioner's submission that the last date for reply was imminent, the Court granted an extension of two more weeks for the petitioner to submit their reply, specifically on or before July 11, 2018. The respondent was directed to consider the reply in accordance with law and pass a speaking order. No coercive action was to be taken against the petitioner until then.

Facts

The petitioner, M/s Suprada Construction Company, represented by its partner Sri Bhujang, filed two writ petitions before the Karnataka High Court, Dharwad Bench. The petitions challenged a show cause notice dated April 16, 2018, issued by the Commissioner of Central Tax (CGST) and Central Excise, Belgaum. This notice was issued under Section 73 of the Finance Act, 1994, for the tax periods 2015-16 and 2016-17. The petitioner sought to quash this notice, contending it was not in accordance with law and principles of natural justice. The petitioner also sought an extension of time to submit their reply to the show cause notice.

Key Issues

1. Whether the High Court should entertain a writ petition challenging a show cause notice at this stage, or if it is premature. The petitioner argued that the show cause notice was illegal and not in accordance with law and principles of natural justice, implying a need for immediate intervention. The respondent, the Commissioner of Central Tax, did not present any arguments as the matter was at the stage of a show cause notice and the court did not call for their response on merits. The court's primary consideration was whether to exercise its extraordinary writ jurisdiction under Article 226 of the Constitution of India when the petitioner had not yet responded to the notice.