Ks Fibtech Private Limited vs. Additional Director

Held

The Court held that the judgment in Supermax Personal Care Pvt. Ltd. Vs. Union of India was not applicable to the present case because suspicious materials were found at the petitioners' premises, indicating their clandestine involvement in the manufacturing of cigarettes and supply of related goods. The Court reiterated the principles from M/S Radha Krishan Industries Vs. State of Himachal Pradesh & Ors., emphasizing that while High Courts have discretion under Article 226, they should generally decline jurisdiction when an effective alternate remedy is available and disputed questions of fact exist. The Court found that the petitioners were allegedly involved in clandestine supply of goods to cigarette manufacturers in Bihar, thus implying their involvement in manufacturing. Although the petitioners disputed this, they were advised to raise all objections before the Competent Authority in response to the show cause notice. The Court also noted that contentions regarding the demand being raised elsewhere and excise duty already paid by manufacturers could not be examined at this stage and should be raised before the concerned authority. Consequently, the Court was not inclined to entertain the writ petition.

Facts

The petitioners, KS Fibtech Private Limited and its director Kamal Chand Bothra, filed a Civil Writ Petition challenging a show cause notice dated March 18, 2024, issued under Section 11-A of the Central Excise Act. The petitioners argued they were not manufacturers and thus the notice was wrongly issued to them by Jaipur authorities, as the main manufacturers were located in Bihar and had already deposited the excise duty. They contended that the issuance of the notice was without jurisdiction. The respondents (Directorate General of Goods and Service Tax Intelligence and others) opposed the petition, stating that only a show cause notice had been issued and the case involved disputed questions of fact, making it unsuitable for writ jurisdiction, and that an alternate remedy was available.

Key Issues

1. Whether the writ petition is maintainable when a show cause notice has been issued and disputed questions of fact are involved, particularly concerning the petitioners' alleged involvement in clandestine manufacturing and supply of cigarettes, and the jurisdiction of the Jaipur authorities. Petitioner's arguments: The petitioners contended that the show cause notice was issued without jurisdiction as they were not manufacturers and the actual manufacturers were in Bihar, who had already paid the excise duty. They relied on Supreme Court judgments in M/S Radha Krishan Industries Vs. State of Himachal Pradesh & Ors., M/S Godrej Sara Lee Ltd. Vs. The Excise And Taxation Officer cum Assessing Authority & Ors., and a Bombay High Court decision in Supermax Personal Care Pvt. Ltd. Vs. Union of India, Commissioner CGST & CEX Audit-Thane. They argued that a writ petition is maintainable when proceedings are wholly without jurisdiction. Revenue's arguments: The respondents argued that only a show cause notice had been issued, and the case involved disputed questions of fact that could not be adjudicated in writ jurisdiction. They asserted that an alternate statutory remedy was available to the petitioners. They relied on Supreme Court judgment in Commissioner of Central Excise, Haldia Vs. Krishna Wax Private Limited and a Rajasthan High Court decision in M/S. Hero Motocorp Limited Vs. Union of India & Ors.