Diamond Beverages Private Limted And Anr. vs. Assistant Commissioner Of CGST And Cx Taratala Division Ii Kolkata South Commissionerate And Ors.

Held

The Court disposed of the writ petition by directing the petitioners to file a reply to the impugned show-cause notice within seven days from the date of the order. The adjudicating authority is directed to consider and dispose of this reply/objection in accordance with the law. Crucially, the authority must pass a reasoned and speaking order, taking into account the Division Bench judgment in Suncraft Energy Private Limited & Anr. (supra). The petitioners are to be given an opportunity for a personal hearing within four weeks of receiving their reply. Until a final order is passed on the petitioners' objection, no further proceedings will be initiated based on the impugned show-cause notice. The Court did not decide the substantive validity of the show-cause notice, but rather established a procedural path for its adjudication.

Facts

The petitioners, Diamond Beverages Private Limited & Anr., have filed a writ petition challenging a show-cause notice dated August 16, 2023, issued under Section 73(1) of the CGST Act, 2017, by the Assistant Commissioner of CGST CX, Taratala Division II, Kolkata South Commissionerate. The petitioners have not yet filed a response to this notice. They contend that the show-cause notice is not legally sustainable, citing a previous judgment by a Division Bench of the same High Court in the case of Suncraft Energy Private Limited & Anr. vs. Assistant Commissioner, State Tax, Ballygunge Charge & Ors. The dispute pertains to the validity of the show-cause notice itself, rather than a specific monetary amount.

Key Issues

1. Whether the impugned show-cause notice dated August 16, 2023, issued under Section 73(1) of the CGST Act, 2017, is sustainable in law without the petitioners having filed a response thereto? Petitioner's Contention: The petitioners argue that the show-cause notice is not sustainable in law. They rely on the judgment of the Division Bench of this Court in Suncraft Energy Private Limited & Anr. – Vs – Assistant Commissioner, State Tax, Ballygunge Charge & Ors. (2023 SCC OnLine Cal 2226), suggesting that the notice may be procedurally flawed or otherwise invalid based on this precedent. Revenue's Contention: The judgment does not record any specific arguments or contentions made by the respondent revenue authorities. It only notes their appearance through learned advocates.