M/S Namdhari Motors Khatima Road Nanakmatta District Udham Singh Nagar vs. Superintendent Central Goods And Services Tax
Held
The Court held that the writ petition was disposed of with liberty to the petitioner to file a properly articulated show cause reply before the respondent within seven days. The Court noted that while the notice indicated the Superintendent's prima facie satisfaction that the petitioner had availed ineligible tax credit, the matter was still to be decided finally by the Authority. Therefore, the Court directed that upon the petitioner filing the reply, the respondent authority shall hear the matter, consider all legal and factual objections raised by the petitioner, and dispose of the case by a reasoned and speaking order. The Court did not quash the show cause notice but allowed the petitioner to present their case fully.
Facts
The petitioner, Mr. Aditya Singh, filed a writ petition before the High Court challenging a show cause notice dated 21.09.2022 issued by the Superintendent, CGST, Range V, Tanakpur Division, Rudrapur. The notice, issued under Rule 142(1) of the CGST Rules read with Section 74(1) of the CGST Act, 2017, proposed recovery of tax credit and penalty. The revenue, represented by Mr. Shobhit Saharia, raised an objection regarding the maintainability of the writ petition, arguing that the petitioner should first respond to the show cause notice. The petitioner contended that the notice was already reasoned and indicated a pre-determined decision to levy recovery and penalty.
Key Issues
1. Whether the writ petition is maintainable challenging a show cause notice issued under Rule 142(1) of the CGST Rules read with Section 74(1) of the CGST Act, 2017, when the matter is still pending adjudication by the authority. Petitioner's contention: The petitioner argued that the show cause notice was not a mere preliminary step but was already reasoned and indicated a pre-determined decision to levy recovery of input tax credit and penalty, thereby making it amenable to challenge. The petitioner relied on the principle that a reasoned notice, suggesting a final decision, can be challenged. Revenue's contention: The revenue contended that the writ petition was not maintainable as the petitioner had not yet availed the opportunity to respond to the show cause notice. They argued that the proper course of action was for the petitioner to file a reply to the notice before the issuing authority. The revenue's objection was based on the procedural stage of the proceedings.
Sections Cited
Section 74(1), Rule 142(1)
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SL. No Date Office Notes, reports, orders or proceedings or directions and Registrar’s order with Signatures COURT’S OR JUDGES’S ORDERS
WPMS No. 2748 of 2022
Hon’ble S.K. Mishra, J.
Mr. Aditya Singh, the learned counsel for the petitioner.
Mr. Shobhit Saharia, the learned counsel for the respondent.
Heard.
By filing this writ petition, the petitioner has prayed as follows:- i) Issue a writ, order or direction in the nature of certiorari quashing the impugned show cause notice dated 21.09.2022 issued by the Superintendent. CGST, Range V, Tanakpur Division, Rudrapur, U.S. Nagar, contained as Annexure no. 1 to the writ petition.
At the time of fresh admission the learned counsel for the revenue Mr. Shobhit Saharia would raise objection regarding maintainability of the writ petition in view of the fact that petitioner has prayed for quashing of the notice under Rule 142(1) of the CGST Rules read with Section 74 (1) of the CGST Act, 2017. Mr. Aditya Singh, the learned counsel for the petitioner would submit that though the notice reflects that the petitioner is required to show cause to the Superintendent, CGST, Range-V
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