M/S.Sreenidhi International PVT. LTD vs. The Joint Commissioner Of Central Tax

Held

The Court held that a writ petition can be entertained despite the availability of an alternative remedy if there is a breach of the principles of natural justice or if the order is passed by an authority lacking jurisdiction. On the first issue, the Court found that the learned Senior Standing Counsel for CBIC could not point out any finding in the impugned order where the petitioner's submissions regarding previous dropped notices were considered. The Court emphasized that quasi-judicial authorities must consider and decide relevant objections, especially when they pertain to prior favorable treatment for similar activities. The Court also noted that the petitioner's objection regarding exemption under Notification No. 12 of 2017 went to the root of the matter, affecting the authority's competence to impose tax. On the second issue, the Court agreed with the petitioner that findings in a show-cause notice cannot be treated as conclusive proof and that the statement in paragraph 17.3(i) of the OIO was erroneous. Consequently, the impugned OIO was set aside, and the matter was remitted back to the original authority for a fresh hearing and order in accordance with the law. The Court explicitly stated it had not expressed any views on the merits of the matter.

Facts

The petitioner, M/s. Sreenidhi International Pvt. Ltd., filed a writ petition challenging an Order-in-Original (OIO) dated June 28, 2024, issued by the Joint Commissioner of Central Tax. This OIO was passed pursuant to a show-cause notice dated May 31, 2022, issued by the Directorate General of GST Intelligence for the period July 2017 to March 2019. The petitioner had filed a detailed reply to the show-cause notice on October 17, 2022. The petitioner contended that for similar business activities in a previous year, a similar notice was dropped after considering their reply. They also relied on Notification No. 12 of 2017, dated June 28, 2017, which they claimed exempted their activities. The OIO was passed without considering these submissions, leading to the challenge.

Key Issues

1. Whether the impugned Order-in-Original (OIO) No. 54/2024-25-SEC-ADJN-JC(GST) dated 28.06.2024 is illegal, without jurisdiction, arbitrary, and violative of the principles of natural justice for failing to consider the petitioner's submissions regarding prior dropping of similar notices and the applicability of exemption Notification No. 12 of 2017. (Petitioner's contention: The OIO failed to consider the petitioner's categorical stand in paragraphs B.16 and C.11 of their reply, which detailed how similar notices for previous periods were dropped. They argued that the nature of their activity had not changed, making the current treatment disadvantageous and the decision-making process polluted. They also asserted that the OIO was passed without jurisdiction as their activities are exempted under Notification No. 12 of 2017. Revenue's contention: The petitioner has a statutory alternative remedy of appeal under Section 107 of the GST Act, 2017, and thus the writ petition is not maintainable. 2. Whether the findings in paragraph 17.3(i) of the impugned OIO, stating that the acceptable contents of the taxpayer's submission have already been taken into account in the notice, are erroneous. (Petitioner's contention: Show-cause notices are tentative, and their allegations cannot be treated as conclusive findings without proper consideration of the reply.)