Rinku Kumar vs. The Union Of INDIA Through The Commissioner Central Goods And Services Tax And Central Excise

Facts

The petitioner, Rinku Kumar, filed a writ petition before the Jharkhand High Court challenging a Show Cause-cum-Demand Notice dated September 28, 2020, issued by the Deputy Commissioner, Central Goods and Services Tax and Central Excise (Respondent No. 2). The notice pertained to alleged tax liabilities for the financial years 2014-15 and 2015-16. The petitioner argued that the authorities lacked jurisdiction to issue the notice as Chapter V of the Finance Act, 1994, under which the proceedings were initiated, had been omitted by Section 173 of the CGST Act, 2017, and the proceedings were not saved by Section 174 of the CGST Act. Additionally, the petitioner contended that Respondent No. 2 was not a 'Proper Officer' under the Finance Act, 1994. However, the petitioner's counsel, on instruction, informed the court that a reply had been submitted to the adjudicating authority and prayed for disposal of the writ petition with a direction for a timely decision.

Held

The Court disposed of the writ petition without delving into the merits of the case. This decision was based on the statement made by the learned counsel for the petitioner that the petitioner had submitted a reply to the show cause notice before the adjudicating authority, thereby submitting to its jurisdiction. The Court noted that the petitioner had approached the Court with prayers to declare that the respondent authorities had no jurisdiction to initiate proceedings under the omitted Chapter V of the Finance Act, 1994, and to quash the show cause notice. However, given the petitioner's subsequent submission to the adjudicating authority, the Court found it appropriate to dispose of the writ petition. The Court directed the adjudicating authority to take a decision in accordance with the law within a reasonable time. The ratio decidendi is that when a party submits to the jurisdiction of an adjudicating authority after initiating writ proceedings challenging that jurisdiction, the High Court may dispose of the writ petition by directing the authority to proceed, without adjudicating the jurisdictional issue.

Key Issues

1. Whether the Respondent-authorities have the jurisdiction, competence, and authority to initiate proceedings under the omitted Chapter V of the Finance Act, 1994, given its omission by Section 173 of the CGST Act, 2017, and whether such proceedings are saved by Section 174 of the CGST Act? 2. Whether the Show Cause-cum-Demand Notice dated September 28, 2020, issued by Respondent No. 2 for the financial years 2014-15 and 2015-16 is illegal and without jurisdiction, considering the alleged lack of saving provisions under Section 174 of the CGST Act and the issuance by an incompetent authority? Petitioner's contentions: The petitioner argued that the omission of Chapter V of the Finance Act, 1994, by Section 173 of the CGST Act, 2017, divested the authorities of their jurisdiction to initiate fresh proceedings. They further contended that Section 174 of the CGST Act did not save these proceedings. The petitioner also asserted that Respondent No. 2, the Deputy Commissioner, was not a 'Proper Officer' under the Finance Act, 1994, rendering the notice illegal. Revenue's contentions: The learned counsel for the respondent did not object to the petitioner's prayer for disposal of the writ petition with a direction to the adjudicating authority.