M/S Central Arya Road Transport An Unit Of M/S Cart Infralog LTD And Anr. vs. Union Of INDIA And Ors.

Facts

The petitioner, M/s. Central Arya Road Transport, an Unit of M/s. Cart Infralog Ltd. & Anr., filed a writ petition challenging an adjudication order dated March 31, 2023, passed by the Principal Commissioner of CGST & CX, Kolkata, South. The petitioner contended that the order was procedurally irregular because a pre-show cause notice, as per a relevant circular, was not issued. Additionally, the petitioner raised an issue regarding the invocation of the extended period of limitation for initiating the proceedings. The respondent CGST authority argued that the writ court should not interfere as the order is appealable and that the extended period of limitation was correctly invoked under Section 73(1) of the Finance Tax Act, 1994, making the pre-show cause notice non-mandatory in this case.

Held

The Court dismissed the writ petition. It held that the impugned adjudication order is appealable under the statute, and a writ court should not scrutinize the facts on which the respondent authorities concluded that the petitioner's case fell within the exceptions under Section 73(1) of the Act. The Court also noted that the petitioner had not approached the court immediately after receiving the show-cause notice, if there was any procedural irregularity in its issuance by not issuing a pre-show cause notice. Furthermore, the Court observed that the petitioner had contested the show-cause notice and participated in the proceedings, and therefore, could not turn around after the adjudication order was passed to challenge it on the ground of non-issuance of a pre-show cause notice. The Court also found that the judgments relied upon by the petitioner did not involve cases where the petitioner approached the writ court challenging the non-issuance of a pre-show cause notice immediately after the issuance of the show-cause notice, but rather after the final adjudication order was passed. The ratio decidendi is that a writ petition challenging an adjudication order on grounds of procedural irregularity, such as non-issuance of a pre-show cause notice, is not maintainable when the order is appealable, the petitioner has participated in the proceedings, and has not approached the court promptly after the show-cause notice.

Key Issues

1. Whether the impugned adjudication order dated March 31, 2023, passed by the Principal Commissioner of CGST & CX, Kolkata, South, is vitiated by procedural irregularity due to the non-issuance of a pre-show cause notice, as contended by the petitioner, and if so, what is the consequence, particularly in light of the petitioner's reliance on relevant circulars and decisions? 2. Whether the extended period of limitation for initiating proceedings was validly invoked by the respondent CGST authority under Section 73(1) of the Finance Tax Act, 1994, and if the petitioner's case falls within the exceptions provided therein, rendering the pre-show cause notice non-mandatory, as argued by the revenue? Petitioner's Contentions: The petitioner argued that the adjudication order suffered from procedural irregularity due to the absence of a pre-show cause notice and intended to rely on several decisions supporting this proposition. They also raised the issue of the improper invocation of the extended period of limitation, asserting their case did not fall within the exceptions under Section 73(1). Revenue's Contentions: The respondent CGST authority argued that the writ court should not interfere as the adjudication order is appealable. They further contended that the petitioner's allegation regarding the extended period of limitation was unsustainable, as the case fell within the exceptions under Section 73(1) of the Finance Tax Act, 1994, making the pre-show cause notice not mandatory.