Mahima Life Sciences PVT. LTD. & Anr. vs. Union Of INDIA & Ors.

Held

The Court held that it possesses territorial jurisdiction to entertain the petition, as a part of the cause of action clearly arose within its territorial limits. This was based on the petitioners' registered office being in New Delhi, investigations and searches conducted in New Delhi, recording of statements in New Delhi, and the show cause notice directing response to an authority in New Delhi. Regarding the issue of limitation, the Court found that the petitioners had indeed raised the contention that a portion of the proposed demand related to a period prior to five years from the date of the show cause notice, and this question was not considered by the Adjudicating Authority. Consequently, the impugned order was set aside, and the matter was remanded to the Adjudicating Authority to decide the question of whether any part of the demand is barred by limitation. The Adjudicating Authority was directed to pass an order within four weeks. The Court explicitly stated that it had not expressed any opinion on the merits of the petitioners' contentions.

Facts

The petitioners, Mahima Life Sciences Pvt. Ltd. & Anr., challenged an Order-in-Original dated 31.01.2023 passed by the Principal Commissioner, CGST, Rohtak (Respondent no.3). This order confirmed a differential duty demand of ₹26,47,54,520/- and imposed a penalty of ₹26,47,54,520/- on each petitioner, pursuant to a show cause notice dated 22.05.2019. The petitioners contended that the impugned order erroneously adjudicated demand of differential duties beyond the five-year limitation period for issuing a show cause notice. They argued that this specific issue of limitation was not decided by the Adjudicating Authority. The respondents raised a preliminary objection regarding the territorial jurisdiction of the Delhi High Court.

Key Issues

1. Whether this Court has the territorial jurisdiction to entertain the present writ petition, considering the show cause notice was issued by the Directorate General of GST Intelligence, Gurugram, and the impugned order was passed by the Principal Commissioner, Rohtak, though the petitioners' registered office is in New Delhi and the show cause notice directed response to an authority in New Delhi? Petitioner's Argument: The petitioners argued that a part of the cause of action arose within the territorial jurisdiction of this Court, as their registered office is in New Delhi, their premises in New Delhi were searched, documents were recovered, statements were recorded in New Delhi, and the show cause notice required them to respond to an authority located in New Delhi. Revenue's Argument: The respondents contended that the Court lacks jurisdiction as the show cause notice was issued by the DGGI, Gurugram, the impugned order was passed by the Principal Commissioner, Rohtak, and the EOU Unit is located in Sonipat. 2. Whether the Adjudicating Authority failed to decide the issue of limitation raised by the petitioners regarding the demand of differential duties pertaining to a period beyond five years from the date of issuance of the show cause notice? Petitioner's Argument: The petitioners asserted that they had raised the issue of limitation before the Adjudicating Authority, but this question was not decided in the impugned order. Revenue's Argument: Not recorded.