M/S. Mrjs Lead Private LTD. vs. The Assistant Commissioner Of State Tax And Ors

Held

The Court held that the writ petitions were not maintainable. Regarding Issue 1, the Court found that the petitioners had already invoked the alternative statutory remedy by filing appeals against the adjudication orders, and these appeals were pending. The Court cited decisions emphasizing the need to exhaust alternative remedies, especially in fiscal matters. Regarding Issue 2, the Court held that the mere quotation of an incorrect section (Section 74) does not render a notice without jurisdiction if it can be sustained under the correct provision (Section 73), especially when issued within the three-year period prescribed by Section 73(10). The absence of allegations of fraud, willful misstatement, or suppression of facts does not invalidate a notice issued under Section 73. Regarding Issue 3, the Court stated that the contention regarding the State Authority's jurisdiction to issue notices under Section 73 could be examined by the Appellate Authority. The Court found no exceptional case to bypass the alternative remedy. The Court dismissed the petitions, leaving it open for the petitioners to pursue their pending appeals. All contentions of the parties were left open to be decided by the appellate authority. No observations in the order were intended to influence the appellate authority.

Facts

The petitioners, M/s. MRJS Lead Private Limited, filed three writ petitions challenging show cause notices and adjudication orders issued under Section 74 of the Central Goods and Service Tax Act, 2017 (CGST Act). The respondents are the Assistant Commissioner of State Tax and other Central and State authorities. The petitioners argued that the notices lacked allegations of fraud, willful misstatement, or suppression of facts, making them incompetent. They also contended that State Authorities lacked the authority to issue such notices. The revenue argued that the notices were issued within the three-year period prescribed by Section 73(10) of the CGST Act and could be sustained under that provision, and that the petitioners had already invoked the alternative appellate remedy. The petitioners had indeed filed appeals against the adjudication orders, which were pending.

Key Issues

1. Whether the writ petitions are maintainable despite the existence of an alternative and efficacious statutory remedy of appeal, which the petitioners have already invoked? 2. Whether the impugned show cause notices issued under Section 74 of the CGST Act are liable to be declared without jurisdiction due to the alleged absence of allegations of fraud, willful misstatement, or suppression of facts? 3. Whether the State Authorities lacked the jurisdiction to issue the impugned show cause notices under Section 73 of the CGST Act? Petitioner's arguments: The notices under Section 74 were incompetent and without jurisdiction in the absence of allegations of fraud, willful misstatement, or suppression of facts. The State Authorities lacked the authority to issue the notices, constituting a jurisdictional error. The alternative remedy should not be a bar when jurisdiction is in question. Reliance was placed on M/s. Magadh Sugar & Energy Ltd. and Armour Security (India) Ltd. Revenue's arguments: The petitioners have alternative and effective remedies by way of appeal. The show cause notices were issued within three years from the due date of furnishing annual returns, as provided under Section 73(10), and thus could be sustained under Section 73 without allegations of fraud, etc. The Central Authorities denied admitting that State Authorities lack jurisdiction.