M/S Akshat Enterprizes vs. The Commissioner, State Goods And Service Tax,U.P. Lucknow

Facts

The petitioner, M/s Akshat Enterprizes, is aggrieved by a notice issued under Section 74(1) of the U.P. State Goods and Service Act, 2017, dated 01.11.2022. The petitioner contends that an intimation under Section 74(5) was issued, to which a reply was submitted under DRC 01-A, Part-B. However, the show cause notice was issued based on previous terms without adjudicating the petitioner's reply. The respondent, The Commissioner, State Goods And Service Tax, U.P. Lucknow, argued that the writ petition is not maintainable as the intimation under Section 74(5) is not a final notice and a show cause notice under Section 74(1) is required if the department is not satisfied. All issues can be raised in reply to the show cause notice, and the court should not entertain the petition before the GST proceedings conclude.

Held

The Court held that a show cause notice had admittedly been issued to the petitioner, providing an opportunity to submit a reply. The Court reasoned that further proceedings would only be initiated upon the petitioner's failure to submit a reply. Therefore, the Court was of the view that the petitioner's remedy lay in submitting a reply to the notice. The Court explicitly stated that the various submissions raised by the petitioner on the merits of the matter were not required to be commented upon at this stage. Accordingly, the writ petition was dismissed. The Court did not decide on the merits of the petitioner's contentions regarding the adjudication of their reply to the Section 74(5) intimation.

Key Issues

1. Whether the writ petition is maintainable at this stage, given that a show cause notice has been issued under Section 74(1) of the U.P. State Goods and Service Act, 2017, and the petitioner has not yet filed a reply to it? Petitioner's Contention: The petitioner argues that the show cause notice was issued without adjudicating their reply to the intimation under Section 74(5), thus challenging the procedural fairness. Respondent's Contention: The respondent contends that the intimation under Section 74(5) is not a final order and a show cause notice under Section 74(1) is the prescribed procedure. They argue that all issues raised by the petitioner can and should be addressed by the petitioner in their reply to the show cause notice. The respondent relies on the Supreme Court's order in State of Punjab Vs. M/s Shiv Enterprises Civil Appeal No.359 of 2023, asserting that the court should not entertain the writ petition until the proceedings under the GST Act are concluded.