Jindal Metal Co. Through Its Proprietor Narender Jindal vs. Directorate General Of GST Intelligence Delhi Zonal Unit And Ors

Facts

The petitioner, Jindal Metal Co., through its proprietor Narender Jindal, filed a writ petition challenging a Show Cause Notice (SCN) dated May 31, 2024, issued by the Directorate General of GST Intelligence, Delhi Zonal Unit. The petitioner's primary contention was that the SCN relied on material gathered during a search, including data extracted from electronic devices, without adhering to the procedure mandated by Section 145 of the Central Goods and Services Tax Act, 2017. Specifically, the petitioner highlighted the absence of a certificate identifying the documents proposed to be relied upon, as required by Section 145(2) of the Act. The revenue was represented by the Directorate General of GST Intelligence and others.

Held

The Court held that it was not appropriate to entertain the challenge to the Show Cause Notice (SCN) at this stage. The Court reasoned that it would be open for the writ petitioner to raise the contention regarding the inadmissibility of the evidence relied upon in the SCN during the adjudication proceedings. Therefore, there was no cause for the High Court to interdict the SCN proceedings. The Court dismissed the writ petition, explicitly stating that all rights and contentions of the writ petitioner were kept open to be asserted before the adjudicating authority. No specific finding was made on the validity of the SCN itself, as the Court declined to adjudicate on the merits of the procedural challenge at this juncture.

Key Issues

1. Whether the Show Cause Notice dated May 31, 2024, is invalid due to the alleged non-compliance with the procedure under Section 145 of the Central Goods and Services Tax Act, 2017, particularly concerning the extraction and reliance on data from electronic devices without a proper certificate as required by Section 145(2)? Petitioner's contention: The petitioner argued that the SCN is invalid because it relies on evidence (data from electronic devices) obtained without following the mandatory procedure under Section 145 of the Act, specifically the requirement for a certificate identifying the documents under Section 145(2). They contended that this procedural lapse renders the evidence inadmissible and, consequently, the SCN unsustainable. Revenue's contention: The judgment does not record any specific arguments made by the revenue or respondents. However, the Court's decision implies that the revenue likely contended that procedural objections should be raised during the adjudication of the SCN rather than in a writ petition.