M/S. Reliance Traders (Gstin 36Aabpq2677E1Z0) vs. Union Of INDIA

Held

The Court noted that none appeared for the petitioner. The learned Senior Standing Counsel for the respondents informed the Court about subsequent developments: a show cause notice was issued on 15.06.2021, and an order in original was passed on 12.11.2021. This subsequent order is being challenged in a separate writ petition, W.P.No.43619 of 2022, which is pending before the same High Court, and the department has filed its counter in that matter. In light of these subsequent developments, the Court found the present writ petition to have become infructuous. Therefore, the Court dismissed the writ petition. The ratio decidendi is that a writ petition that becomes infructuous due to subsequent events and the filing of a new petition challenging the later order will be dismissed. The operative direction was the dismissal of the writ petition as infructuous, with no order as to costs. No issue was expressly left undecided.

Facts

The petitioner, M/s. Reliance Traders, filed a writ petition challenging a communication dated 12.02.2021 issued by the Superintendent/Senior Intelligence Officer (Anti-Evasion), Secunderabad GST Commissionerate. The petitioner sought a direction to the respondents to follow the procedure under Section 74 of the CGST Act, 2017, for finalizing their assessment and to refrain from demanding tax payments without due process. The petitioner also sought a stay on proceedings pursuant to the impugned communication, which demanded reversal of Input Tax Credit (ITC) amounting to ₹87,37,000. During the pendency of this writ petition, the respondents issued a show cause notice on 15.06.2021 and subsequently passed an order in original on 12.11.2021. This subsequent order is now being challenged in a separate writ petition, W.P.No.43619 of 2022.

Key Issues

1. Whether the impugned communication dated 12.02.2021, which demanded reversal of Input Tax Credit without following the procedure prescribed under Section 74 of the CGST Act, 2017, is arbitrary, illegal, and violative of principles of natural justice? Petitioner's contention: The petitioner argued that the respondents failed to adhere to the mandatory procedure outlined in Section 74 of the CGST Act, 2017, before demanding tax payments and reversal of ITC. They contended that the impugned communication was coercive and unjust, depriving them of adequate opportunity to present their case. Respondents' contention: The respondents submitted that a show cause notice was issued on 15.06.2021, followed by an order in original on 12.11.2021. They further stated that this subsequent order is the subject matter of a different writ petition (W.P.No.43619 of 2022) which is currently pending before the High Court. The department has already filed its counter in that pending matter.