M/S. Kausalya Infra Projects Private Limited vs. Additional Director And 6 Others

Held

The High Court declined to entertain the writ petition at the stage of a show cause notice. The Court held that at this preliminary stage, when the statute provides for adequate and efficacious alternative remedies, a writ court should not interfere. The petitioner would have ample opportunities to raise all contentions, including the question of jurisdiction of the 2nd Respondent, in the proceedings that would follow the show cause notice. The Court explicitly stated that it was not expressing any opinion on the merits of the case. Therefore, the writ petition was dismissed without prejudice to the petitioner's right to raise all available contentions before the appropriate authorities.

Facts

M/s. Kausalya Infra Projects Private Limited (the petitioner) filed a writ petition challenging a show cause notice dated July 29, 2022, issued by the Additional Director, Directorate General of Goods and Services Tax Intelligence (1st Respondent). The notice directed the petitioner to submit a reply before the Additional/Joint Commissioner, Central Tax (2nd Respondent). The petitioner contended that the 2nd Respondent lacked jurisdiction to adjudicate the matter, arguing that jurisdiction vested with the Assistant Commissioner of State Tax (3rd Respondent). The petitioner also raised grievances regarding the validity of the show cause notice and its issuance, citing procedural irregularities and alleged violations of relevant notifications and circulars. The show cause notice was issued following a search and intelligence gathering by the GST Intelligence officials regarding alleged non-discharge of tax liability.

Key Issues

1. Whether the Additional/Joint Commissioner, Central Tax (2nd Respondent) has the jurisdiction to adjudicate the show cause notice dated July 29, 2022, issued by the Directorate General of GST Intelligence (1st Respondent), considering the petitioner's contention that jurisdiction vests with the Assistant Commissioner of State Tax (3rd Respondent)? (Question of law) 2. Whether the show cause notice, by notifying the 2nd Respondent as the Adjudicating Authority, is without jurisdiction and contrary to Notification No. 2 of 2022, Central Tax dated March 11, 2022? (Question of law) 3. Whether Circular No. 169/10/2022-GST dated March 12, 2022, issued by the Central Board of Indirect Taxes and Customs (5th Respondent), is contrary to Notification No. 2 of 2022, Central Tax dated March 11, 2022? (Question of law) 4. Whether the show cause notice dated July 29, 2022, issued by the 1st Respondent, violates Rule 142 of the CGST Rules, 2017, due to the absence of a mandatory notice in DRC-01 and its failure to be uploaded on the portal? (Question of mixed law and fact) Petitioner's Arguments: - The 2nd Respondent lacks jurisdiction to hear the reply, as jurisdiction is vested with the 3rd Respondent. - No notification has been issued by the Central Government under Section 6 of the CGST Act, 2017, entrusting the 2nd Respondent as the competent authority. - The show cause notice is contrary to Notification No. 2 of 2022 and Circular No. 169/10/2022-GST. - The show cause notice violates Rule 142 of the CGST Rules, 2017, due to the absence of DRC-01. Revenue/State's Arguments: - The judgment records no specific arguments made by the respondents.