Prolific Systems And Technologies PVT. LTD. And Ors vs. Union Of INDIA Thr. Secretary Ministry Of Finance Dpet. And Ors

Facts

The petitioners, Prolific Systems and Technologies Pvt.Ltd. & Ors., filed a writ petition before the Bombay High Court. During the pendency of the petition, the respondent-revenue issued a show cause cum demand notice dated March 16, 2023. The petitioners submitted a preliminary reply on June 20, 2023, and indicated their intention to file a detailed reply within two weeks. The petitioners also highlighted that they had deposited an amount of Rs. 3 crores with the respondent-revenue in 2020 and intended to seek a refund of this amount. The Court noted that the show cause notice needed to be adjudicated to its logical conclusion.

Held

The Court held that further adjudication of the writ petition was not called for at this stage, given the issuance of the show cause cum demand notice and the petitioners' intention to file a detailed reply. All contentions raised by the petitioners in the writ petition were kept open to be agitated during the adjudication of the show cause notice. Similarly, all issues of law were preserved for assertion as and when the need arose. The Court directed that if the petitioners intended to make an application for the refund of the Rs. 3 crores deposited, they should do so within two weeks, and the respondents should consider such an application and pass appropriate orders. The Court also directed that the show cause notice be adjudicated within six months from the date the final reply is filed, considering the peculiar facts and circumstances. The Court expressed no opinion on the rival contentions.

Key Issues

1. Whether the High Court should adjudicate the writ petition when a show cause cum demand notice has been issued and the petitioners intend to file a detailed reply, considering the principle that alternative remedies should be exhausted? Petitioner's Contention: The petitioners argued that their contentions in the writ petition should be kept open to be agitated during the adjudication of the show cause notice. They also highlighted a deposit of Rs. 3 crores made in 2020 and their intention to apply for a refund, referencing the High Court's order in "Vidhata Metal Pvt. Through Ishwar G. Samota & Anr. Vs. Union of India, through its Secretary & Ors.". Respondent's Contention: The respondents fairly pointed out the issuance of the show cause cum demand notice and the petitioners' preliminary reply, suggesting that further adjudication of the petition was not immediately necessary. They also indicated that the show cause notice needed to be taken to its logical conclusion.