Laxmi Devi Shaw vs. Superintendent (Anti Evasion), CGST And Central Excise, Howrah Comm. And Ors

Facts

The petitioner, Laxmi Devi Shaw, challenged a Show Cause Notice (SCN) dated June 27, 2024, issued by the Superintendent (Anti Evasion), CGST and Central Excise, Howrah, which clubbed multiple financial years (2017-18 and 2022-23) and proposed a demand of Rs. 6,21,64,552/-. The petitioner argued that clubbing disparate financial years in a single SCN is illegal, without jurisdiction, and barred by limitation under Section 74 of the CGST Act, 2017. The revenue authorities contended that the writ petition is not maintainable due to the existence of an alternative efficacious remedy under Section 107 of the CGST Act, and cited Supreme Court and other High Court judgments. A sum of Rs. 2,35,233/- had already been recovered by the revenue.

Held

The Court held that the issues of limitation, jurisdiction, and the permissibility of clubbing different financial years in a single Show Cause Notice (SCN) involve disputed questions of facts and law. These complex matters can be more effectively adjudicated by the Appellate Authority under Section 107 of the CGST Act, 2017. The Court found that an efficacious alternative remedy of appeal is available to the petitioner. Therefore, without entering into the merits of the case, the Court decided to dispose of the writ petition by directing the petitioner to prefer an appeal. All questions of law, including those related to jurisdiction and limitation, were expressly kept open to be urged before the Appellate Authority. The Court directed the petitioner to deposit the balance 10% pre-deposit after adjusting the amount already recovered (Rs. 2,35,233/-) out of the total demand of Rs. 6,21,64,552/-. The appeal, if filed, is to be decided expeditiously within eight weeks, and no coercive action is to be taken against the petitioner until the appeal attains finality. The Court explicitly stated it had not gone into the rival contentions on merits.

Key Issues

1. Whether a single Show Cause Notice (SCN) can validly club different financial years (specifically 2017-18 and 2022-23) for proposing a GST demand, and if not, whether such a notice is bad in law, without jurisdiction, and barred by limitation under Section 74 of the CGST Act, 2017? Petitioner's arguments: The petitioner argued that clubbing multiple assessment years in a single SCN is ex facie bad, illegal, and without jurisdiction, rendering the consequential demand unsustainable. They contended that the proper officer must determine tax, interest, and penalty within five years from the annual return date, and a consolidated SCN violates statutory provisions. They relied on the Bombay High Court's decision in Mirloc Good Earth Developers, where an identical issue was referred to a Larger Bench, and the Calcutta High Court's decision in State Bank of India, which set aside a similar SCN on jurisdictional grounds due to limitation. Revenue's arguments: The revenue argued that the writ petition is not maintainable due to the existence of an alternative efficacious statutory remedy under Section 107 of the CGST Act, where issues of clubbing and limitation can be agitated. They relied on the Supreme Court's dismissal of a Special Leave Petition in M/s Mathur Polymers, affirming a Delhi High Court judgment that upheld consolidated SCNs. They also cited a Calcutta High Court judgment in UBS Exports International Pvt. Ltd., which dismissed a writ petition on the ground of alternative remedy.