Amit Singhal S/O Late Shri Purushottam Singhal vs. The Joint Commissioner

Held

The Court held that there were no grounds to interfere at this stage, as the proceedings before the competent authority were at a nascent stage. The Court observed that the petitioner had already joined these proceedings by submitting a reply to the impugned Show Cause Notice. While not quashing the SCN, the Court made a significant observation that it expected the competent authority to supply the material relied upon by it to the petitioner, as sought in the reply, before taking a final decision. The Court also noted that the petitioner had filed an application seeking cross-examination of witnesses, and appropriate orders would be passed on pending applications, either way, in accordance with law. The writ petition was disposed of with these observations.

Facts

The petitioner, Amit Singhal, an accountant and tax-return preparer, is challenging a Show Cause Notice (SCN) dated 21.04.2026 issued by the Joint Commissioner, State Tax, Rajasthan. The SCN proposes a penalty of ₹47,64,95,447/- under Section 122(1A) of the Rajasthan Goods and Services Tax Act, 2017 (RGST Act) for alleged wrongful availment and passing of input tax credit (ITC) by twenty-three firms. The petitioner claims he merely assisted clients with GST registration and returns and has no proprietary interest in these firms. He was arrested on 26.11.2024 under Section 69 of the RGST Act, and criminal proceedings are pending. The SCN relies on statements recorded under Section 70 of the RGST Act in the petitioner's absence, without affording him cross-examination. The petitioner's preliminary objections challenging jurisdiction, denial of cross-examination, non-supply of documents, and limitation were rejected by the respondent's communication dated 15.06.2026.

Key Issues

1. Whether the Show Cause Notice dated 21.04.2026, issued under Section 122(1A) of the RGST Act, is liable to be quashed on the grounds of alleged lack of jurisdiction, denial of cross-examination, non-supply of relied-upon documents, and limitation, thereby violating principles of natural justice. Petitioner's arguments: The petitioner contended that the SCN and the subsequent rejection of preliminary objections were illegal as he was not provided an opportunity to cross-examine the individuals whose statements were used against him. He argued that the relied-upon documents were not supplied, and the officer issuing the SCN was the same officer who conducted the investigation, raising concerns about bias. The petitioner also raised objections regarding jurisdiction, limitation, and the applicability of Section 122(1A) of the RGST Act. Respondent's arguments: The respondents did not record any specific arguments in the judgment regarding the petitioner's preliminary objections. However, the Court noted that the petitioner had joined the proceedings by submitting a reply to the SCN.