M/S. Ocean King vs. Sales Tax Officer Class-Ii/Avato

Facts

The petitioner, M/s. Ocean King, filed a writ petition challenging a Show Cause Notice (SCN) dated January 8, 2025, for cancellation of registration and an order dated January 8, 2025, blocking its electronic credit ledger. The respondent, Sales Tax Officer Class-II/AVATO, based its action on a communication dated January 6, 2025, which stated that no business activities were observed at the principal place of business during a survey visit. A Panchnama dated January 4, 2025, also recorded statements from independent witnesses confirming the lack of business activity. The petitioner's reply to the SCN merely expressed willingness to join the investigation, without substantively responding to the allegations.

Held

The Court found no justification to entertain the writ challenge at that stage, particularly given the petitioner's reply to the Show Cause Notice (SCN), which merely stated a willingness to join the investigation without providing a substantive response to the allegations. The Court noted that the petitioner had not presented a substantive reply to the SCN. Consequently, the Court disposed of the writ petition by granting liberty to the petitioner to file a supplementary reply to the SCN within two weeks. The Court directed the respondent to examine and dispose of any submitted reply with expedition, considering that the electronic credit ledger (ECL) has been blocked since January 8, 2025. The respondent was also directed to endeavor to conclude the SCN proceedings preferably within three weeks. The impugned orders would abide by the respondent's fresh decision, and all rights and contentions of both parties were kept open.

Key Issues

1. Whether the Show Cause Notice for cancellation of registration and the order blocking the electronic credit ledger, issued by the Sales Tax Officer Class-II/AVATO, are liable to be quashed and set aside. Petitioner's contention: The petitioner sought a writ of certiorari to quash the SCN and the order blocking its electronic credit ledger, and a writ of mandamus to direct the respondent to unblock the ledger. The specific arguments made by the petitioner are not detailed in the judgment, beyond seeking the aforementioned reliefs. Respondent's contention: The respondent's action was based on findings during a survey visit indicating no business activity at the declared principal place of business, as corroborated by a Panchnama and witness statements. The respondent issued the SCN and blocked the ECL based on these findings.