Hahnemanns Jac Olivol Group Of Products PVT.LTD. And Anr vs. The Deputy Commissioner Of State Tax Bureau Of Investigation S.B. Hq, And Ors

Facts

The appellants, JAC Olive Products Private Ltd. and Hahnemanns Jac Olivol Group of Products Pvt. Ltd., filed intra-court appeals against orders dated July 17, 2023, by a learned Single Bench. The Single Bench had dismissed their writ petitions as premature. The writ petitions challenged a preliminary report dated June 2, 2023, issued by the Deputy Commissioner of State Tax, Bureau of Investigation, South Bengal. The appellants argued that the report was flawed. However, a final report was drawn on July 24, 2023, and communicated to the appellants, who were given an opportunity to file a rebuttal. The appellants did not file a rebuttal, citing a pending application before the Special Commissioner. Subsequently, an intimation to show cause was issued in Form GST DRC-01A, followed by a show cause notice dated August 23, 2023.

Held

The Court agreed with the learned Single Bench that the initial writ petition challenging the preliminary report was premature. The Court noted that a final report was subsequently drawn on July 24, 2023, and a show cause notice was issued on August 23, 2023. The Court found that the show cause notice dated August 23, 2023, did not pre-judge the matter, as it considered the allegations in the final report. Regarding the authority of the Bureau of Investigation, the Court noted that the show cause notice was issued by an officer of the rank of Deputy Commissioner, State Tax, who is empowered to adjudicate. The Court held that the appellants should participate in the adjudicating proceedings by filing a reply to the show cause notice dated August 23, 2023. They are entitled to raise all factual and legal issues, including the authority of the Bureau of Investigation. The Court extended the time for filing the reply to October 16, 2023, and directed the authority to fix a date for personal hearing after the Puja Holidays, affording an effective opportunity. For MAT/1425/2023, where a show cause notice was yet to be issued, the Court directed its issuance and joint adjudication with MAT/1426/2023.

Key Issues

1. Whether the preliminary report dated June 2, 2023, and the subsequent intimation in Form GST DRC-01A constituted a pre-judging of the issue, thereby vitiating the proceedings, as argued by the appellants, who relied on Oryx Fisheries Private Limited v. Union of India? The appellants contended that a show cause notice should not pre-judge the issue. The State argued that the subsequent show cause notice dated August 23, 2023, did not pre-judge the matter and took into account the allegations in the final report. 2. Whether the Bureau of Investigation, South Bengal Headquarter, had the authority to issue the show cause notice, as the appellants argued it is not an adjudicating authority? The State countered that the show cause notice was issued by an officer in the rank of Deputy Commissioner, State Tax, who is entitled to adjudicate such notices.