M/S Baba Minerals vs. Union Of INDIA
Held
The Court held that the writ petition challenging the show cause notice was premature. The Court reasoned that the core of the petitioner's contention, that the DGGSTI cannot be an adjudicating authority, requires a factual determination of the allegations made in the show cause notice. Since the petitioner had not yet filed a reply to the show cause notice, and the allegations were fact-based, the appropriate course of action was to allow the adjudicatory process to proceed. The Court dismissed the writ petition on the grounds of prematurity, implying that the petitioner should first respond to the show cause notice and exhaust available remedies before approaching the High Court. The issue of whether DGGSTI can be an adjudicating authority was not decided on merits but was deferred due to the premature filing of the writ.
Facts
M/s Baba Minerals, a registered dealer under the Goods and Services Tax Act, 2017, filed a writ petition before the Rajasthan High Court challenging a show cause notice dated 31.07.2024. The notice was issued by the Deputy Director of the Directorate General of Goods and Services Tax Intelligence (DGGSTI), Jaipur Zonal Unit. The petitioner argued that its jurisdiction falls under the State, and the Deputy Director of DGGSTI is not an authorized Adjudicating Authority. The respondents contended that investigations revealed the petitioner was involved in generating fake Input Tax Credits through cash transactions and fake invoices. They relied on a circular dated 09.02.2018, asserting that Central Tax Officers of Audit Commissionerates and DGGSTI have the power to issue show cause notices. The petitioner had not yet filed a reply to the show cause notice.
Key Issues
1. Whether the Deputy Director of the Directorate General of Goods and Services Tax Intelligence (DGGSTI) is an authorized Adjudicating Authority to issue a show cause notice to the petitioner, considering the petitioner's allocation is under State jurisdiction, as per Section 6(1) of the Goods and Services Tax Act, 2017? Petitioner's contention: The petitioner argued that the Deputy Director of DGGSTI lacks the authority to issue the show cause notice because the petitioner falls under the State's jurisdiction, and Section 6(1) of the Act does not empower DGGSTI officers in this regard. Respondent's contention: The respondents argued that as per a circular dated 09.02.2018, Central Tax Officers of Audit Commissionerates and DGGSTI are empowered to issue show cause notices. They also asserted that the allegations against the petitioner regarding fake Input Tax Credits and invoices were based on intelligence inputs, investigations, and searches, necessitating factual determination.
Sections Cited
Section 6(1)
AI-generated summary — verify with the full judgment below
[2024:RJ-JP:47899-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 14894/2024 M/s Baba Minerals, Office No. 11, 4Th Floor, Alankar Plaza, Central Spine, Vidhyadhar Nagar, Jaipur - 302039, Rajasthan Through Its Proprietor Mr. Abhishek Goyal, S/o Mr. Shree Gopal Goyal, Aged About 39 Years, E-6, Laxmi Narayan Vihar Colony, Kishangarh, Ajmer, Rajasthan-305801. ----Petitioner Versus
Union Of India, Through The Secretary, Ministry Of Finance Department Of Revenue, New Delhi.
The Additional Director, Directorate General Of Goods And Service Tax Intelligence, Jaipur Zonal Unit, C-62, Sarojini Marg, C-Scheme, Jaipur-302001. 3. The Additional Commissioner/ Joint Commisioner, Of Central Excise And Goods And Services Tax Commissionerate, New Central Revenue Building, Statute Circle, C-Scheme, Jaipur- 302005. 4. State Of Rajasthan, Through The Chief Commissioner, Commercial Tax Department, Kar Bhawan, Jaipur-302004. ----Respondents For Petitioner(s) : Mr.Ravi Gupta, Adv. For Respondent(s) : Mr.Naresh Gupta, Senior Standing Counsel for DGGSTI. Mr.Kartikeya Sharma, Adv. for Mr.Sandeep Taneja, AAG. HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'
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