M/S Kison vs. The Union Of INDIA

Facts

The petitioner, M/s Kison, a sole proprietorship firm, filed a writ petition before the Patna High Court. The petitioner challenged a show-cause notice dated April 8, 2019, issued by the Additional Commissioner, CGST, Patna Central Division. The petitioner argued that this notice was issued in disregard of the Master Circular on Show Cause Notice dated March 10, 2017, and indicated a pre-determined notion to adjudicate the matter against them. The respondents are the Union of India and various CGST authorities. The specific tax period and the amount in dispute were not explicitly recorded in the judgment.

Held

The Court disposed of the writ petition with specific directions. It directed the appropriate authority to positively consider and decide the issue in accordance with law, giving due regard to circulars issued by the Central Board of Excise and Customs, including the Master Circular dated March 10, 2017. The Court expressed hope that the appropriate authority (Respondent No. 3) would take an appropriate decision expeditiously and strictly in accordance with law. Liberty was reserved for the petitioner to place all relevant materials in response to the show-cause notice. The authority was directed to pass a reasoned and speaking order after considering all materials. No coercive steps were to be taken against the petitioner during the pendency of the proceedings. The authority was to pass a fresh order after affording adequate opportunity to all concerned, including the petitioner, and to decide the case on merits within two months. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open. The proceedings were to be conducted through digital mode if possible during the pandemic.

Key Issues

1. Whether the show-cause notice dated April 8, 2019, issued by the Additional Commissioner, CGST, Patna Central Division, was in disregard of the Master Circular on Show Cause Notice dated March 10, 2017, thereby indicating a pre-determined notion of adjudication against the petitioner? Petitioner's Contention: The petitioner argued that the impugned show-cause notice was issued by Respondent No. 3 in violation of the Master Circular on Show Cause Notice dated March 10, 2017, suggesting a pre-determined decision against them. The petitioner relied on the Master Circular as evidence of procedural impropriety. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or state in response to the petitioner's contention regarding the Master Circular. However, the Court observed that the apprehension expressed by the petitioner was unfounded on facts as emanating from the record.