M/S Barminco Indian Underground Mining Services LLP vs. Deputy Commissioner

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CW/17397/2024HC RajasthanGSTCNR RJHC02095595202403 December 2024Bench: MANINDRA MOHAN SHRIVASTAVA,UMA SHANKER VYAS3 pages

AI SummaryDismissed

Facts

M/s Barminco Indian Underground Mining Services LLP (the petitioner) filed a writ petition before the Rajasthan High Court challenging a show cause notice issued by the Deputy Commissioner, Circle-B, Enforcement Wing-II, State Tax, Jaipur (the respondent authority). The petitioner's primary contention was that Goods and Services Tax (GST) is not leviable on the import of services, and the respondent authority had mechanically issued the notice without considering this aspect. The respondent authorities argued that the petitioner should have first submitted a reply to the show cause notice, allowing the authority to examine all grounds before approaching the High Court. The High Court noted that there was no lack of jurisdiction or allegation of mala fides against the authority, nor a violation of principles of natural justice.

Held

The High Court held that it should not entertain the writ petition at this stage. The Court reasoned that the present case does not involve a lack of jurisdiction on the part of the authority, nor are there allegations of mala fides. Furthermore, there was no apparent violation of the principles of natural justice. Therefore, the Court was not inclined to delve into the merits of the dispute regarding the leviability of tax on the import of services. The Court concluded that the interest of justice would be better served by allowing the petitioner to file a reply to the show cause notice, raising all available legal grounds. The concerned authority would then be required to decide the matter after due application of mind. The Court explicitly did not decide on the merits of the petitioner's claim regarding the non-leviability of GST on imported services.

Key Issues

1. Whether the High Court should entertain a writ petition challenging a show cause notice at a pre-adjudication stage when the petitioner claims GST is not leviable on the import of services, and the authority has not yet considered this ground (Section 73/74 of CGST Act, 2017, and relevant circulars/orders). Petitioner's arguments: The petitioner contended that GST is not leviable on the import of services, and the respondent authority failed to consider this crucial aspect before issuing the show cause notice. They relied on various circulars and orders to support their claim that they are not liable for GST on imported services. Respondents' arguments: The State and Union of India argued that the petitioner ought to have submitted a reply to the show cause notice, raising all their grounds before the concerned authority. They submitted that the authority would then examine each ground and decide the matter in accordance with the law. They contended that this is not a case where the authority lacks jurisdiction or where mala fides have been alleged, and therefore, the High Court should not interfere at this stage.

Sections Cited

Section 73, Section 74

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[2024:RJ-JP:49618-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D. B. Civil Writ Petition No. 17397/2024 M/s Barminco Indian Underground Mining Services LLP, Having Its Address At C-77, B-F, C-Scheme, Shyam Apartment, Sarojini Marg, Jaipur, Through Its Designated Partner, Shri Aparajit Bhattacharya, S/o Shri Arnab Bhattacharya (Deceased), Aged About 45 Years, Having His Address At 603A The Magnolias, DLF Golf Links, DLF Phase 5, Gurgaon 122009, Haryana ----Petitioner Versus 1. Deputy Commissioner, Circle-B, Enforcement Wing-II, State Tax, Jaipur, Rajasthan Having Its Address At Room No. 101, New Building, Kar Bhawan, Rajasthan High Court Circle, Jaipur, Rajasthan 2. Assistant Commissioner, B-II, Enforcement Wing-II, State Tax, Jaipur, Rajasthan, Having Its Address At Room No. 5, Ground Floor, New Building, Kar Bhawan, Ambedkar Circle, Jaipur, Rajasthan. 3. Chief Commissioner, Commercial Taxes Department, Having Its Address At Kar Bhawan, Rajasthan High Court Circle, Jaipur, Rajasthan 4. Government of Rajasthan, Finance Department, Through Its Additional Chief Secretary, Finance Having Its Address At 1St Floor, Main Building, Government Secretariat, Janpath, Jaipur, Rajasthan. 5. Union of India, Through Secretary Finance, Ministry of Finance, North Block, New Delhi-110001 ----Respondents For Petitioner : Mr. Shashi Mathew Advocate with Mr. Krishnaveer Singh Advocate, Mr. Abhishek Boob Advocate and Mr. Aditya Vijay Advocate. For Respondents : Mr. Sandeep Taneja Additional Advocate General with Mr. Nishant Sarraf Advocate. Mr. Naresh Gupta Advocate. [2024:RJ-JP:49618-DB] (2 of 3) [CW-17397/2024] HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE UMA SHANKER VYAS

Order 03/12/2024

This writ petition has been filed by the petitioner against show cause notice mainly on the submission that GST is not leviable on import of services.

Learned counsel for the petitioner submits that in view of various circulars and order, the petitioner is not liable to payment of GST on import of services, but the authority concerned, at the pre-show cause notice stage, has not considered this aspect and has mechanically issued show cause notice.

Learned counsel for the State as also learned counsel for Respondent No. 5, on advance copy, would submit that the petitioner, instead of raising all the aforesaid grounds before this Court, ought to have submitted reply to show cause notice. Learned counsels would submit that after submission reply to show cause notice by the petitioner, the authority concerned shall examine each and every ground raised by the petitioner and will decide the matter in accordance with law.

Present is not a case where the authority concerned lacks juri iction. It is not a case where mala fides have been alleged. In the absence of there being a case of violation of principles of natural justice, we do not think that this Court should enter into the merits of the dispute with regard to leviability of tax at this stage. Interest of justice would be served if the petitioner is granted liberty to file reply to show cause notice taking all the grounds available to it under the law and the authority concerned

[2024:RJ-JP:49618-DB] (3 of 3) [CW-17397/2024] should decide the matter after due application of mind. Therefore, we are not inclined to entertain this writ petition.

Writ petition is dismissed with liberty to the petitioner to file reply to show cause notice. (UMA SHANKER VYAS),J (MANINDRA MOHAN SHRIVASTAVA),CJ MANOJ NARWANI-UPENDRA/15

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.