M/S Kaushal Pharma vs. Chief Commissioner

CW/10722/2023HC RajasthanGSTCNR RJHC02055143202330 January 2025Bench: AVNEESH JHINGAN,SHUBHA MEHTA2 pages

AI SummaryRemanded

Facts

The petitioner, M/s Kaushal Pharma, challenged a show cause notice (SCN) dated May 29, 2023, issued by the Joint Commissioner, Business Audit I Zone IV, Jaipur. The primary ground for challenge was that an Audit Officer cannot function as an Assessing Officer. The petitioner also challenged a clarification dated October 18, 2022, and a communication dated October 13, 2022. The court noted that preliminary objections regarding the jurisdiction of the authority issuing the SCN had already been decided by an adjudicating authority via an order dated July 6, 2023. The respondents indicated that interim protection had been in place for the petitioner during the pendency of the writ petition.

Held

The Court held that the petitioner's preliminary objections regarding the jurisdiction of the authority issuing the show cause notice had already been decided by an adjudicating authority on July 6, 2023. The Court found that the petitioner has a statutory remedy of appeal under Section 107 of the Central Goods and Services Tax Act, 2017, against this order. Consequently, the writ petition was disposed of by relegating the petitioner to this appellate remedy. The Court clarified that the challenge to the communication dated October 13, 2022, and the clarification dated October 18, 2022, were kept open for the petitioner to pursue before the appellate authority. The Court directed that if the petitioner files an appeal with a stay application within four weeks, it shall be considered within limitation, and the interim protection shall continue until the appellate authority decides the stay application. The ratio decidendi is that where a statutory remedy of appeal is available against an order deciding preliminary objections, a writ petition should ordinarily be relegated to that remedy.

Key Issues

1. Whether the Audit Officer can be considered an Assessing Officer, thereby questioning the jurisdiction of the authority issuing the show cause notice under the Central Goods and Services Tax Act, 2017? The petitioner argued that an Audit Officer lacks the statutory power to issue a show cause notice, as this function is typically reserved for an Assessing Officer. The petitioner contended that the SCN was therefore invalid. The respondents did not record any specific arguments on this point in the judgment. 2. Whether the clarification dated October 18, 2022, and the communication dated October 13, 2022, are legally tenable and applicable to the petitioner's case? The judgment does not detail the petitioner's arguments against these specific documents, nor does it record any arguments from the respondents regarding them.

Sections Cited

Section 107

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[2025:RJ-JP:4277-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 10722/2023 M/s Kaushal Pharma, Through Its Proprietor Mr. Mahesh Kumar Gupta S/o Rurmal Gupta Age 58 Years (Approx) R/o 187 Lane No 4 Padmawati Colony- A Nirman Nagar Jaipur 302019. ----Petitioner Versus 1. Chief Commissioner, Commercial Taxes Department Jaipur 2. Joint Commissioner, Business Audit I Zone Iv Jaipur ----Respondents For Petitioner(s) : Mr. Jatin Harjai Mr. Rohan Aggarwal with Ms. Yashvini Chechani For Respondent(s) : Mr. Sandeep Taneja, AAG with Mr. Aditya Sharma HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MRS. JUSTICE SHUBHA MEHTA

Order 30/01/2025 AVNEESH JHINGAN, J(ORAL):

The challenge in the petition is to quash the show cause notice (for brevity, ’SCN’) dated 29.05.2023 inter alia on the ground that the Audit Officer cannot be an Assessing Officer. Further challenge to the clarification dated 18.10.2022 and communication dated 13.10.2022. 2. After hearing learned counsel for the parties at some length, it revealed that the preliminary objections raised by the petitioner with regard to juri iction of the authority issuing SCN have been decided vide order dated 06.07.2023. The adjudication of the preliminary objection is an order passed by adjudicating authority

[2025:RJ-JP:4277-DB] (2 of 2) [CW-10722/2023] and the petitioner has a remedy of appeal under Section 107 of the Central Goods and Services Tax Act, 2017. 3. Learned counsel for the respondents submits that during pendency of the petition, interim protection was operating in favour of the petitioner.

This petition is disposed of relegating the petitioner to remedy of appeal.

It is clarified that at this stage, the petitioner has been relegated to the remedy of appeal, the issue of challenge to the communication dated 13.10.2022 and clarification dated 18.10.2022 is kept open.

In the eventuality of the petitioner filing an appeal accompanied by a stay application before the appellate authority within four weeks from today, the same shall be considered to be within limitation. The interim protection shall continue till the appellate authority takes up the stay application. (SHUBHA MEHTA),J (AVNEESH JHINGAN),J MONIKA-LAKSHYA/26

Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.