M/S Satish Sharma vs. Union Of INDIA

Held

The Court held that a writ petition against a show-cause notice is generally not maintainable, citing Supreme Court judgments in Special Director v. Mohd. Ghulam Ghouse, Union of India v. Kunisetty Satyanarayana, and Ministry of Defence v. Prabhash Chandra Mirdha. The Court reasoned that a show-cause notice does not give rise to a cause of action or infringe upon rights until a final adverse order is passed, unless issued without jurisdiction. The Court found that the petitioner had not averred that the authority issuing the show-cause notice lacked jurisdiction or that the notice was non-est in the eye of the law. Furthermore, the Court identified disputed questions of fact, such as whether the entry on the Panchayat portal was erroneous, whether the petitioner had supplied the goods, or if funds were misappropriated. These disputed facts cannot be adjudicated by the High Court under Article 226. Consequently, the Court concluded that the petitioner must contest the proceedings before the taxing authorities. The petition was dismissed in limine. The Court clarified that the dismissal would not prejudice the taxing authorities, who were directed to decide the proceedings strictly in accordance with the law.

Facts

The petitioner, M/s Satish Sharma, a registered firm dealing in building and construction materials, filed a writ petition challenging show-cause notices dated August 1, 2024, and reminders dated December 4 and 8, 2025. These notices were issued by Respondent No. 2 (GST authority) proposing to levy GST of Rs. 3,40,28,024/- on alleged goods supplied worth Rs. 3,88,89,171/- in the financial year 2017-18, as reflected on the Panchayat/MANREGA portal. The petitioner claimed no payment was received for these supplies and provided a certificate from Gram Panchayat, Janpura, stating the portal entry was erroneous. The petitioner also sought directions to delete the entry from the portal. The Court rejected applications to introduce additional documents and an exemption from filing an affidavit, noting the lack of acknowledgment for the petitioner's replies to the show-cause notices.

Key Issues

1. Whether the writ petition is maintainable against a show-cause notice issued by the GST authority, particularly when the petitioner claims the underlying entry on the Panchayat/MANREGA portal is erroneous and no payment was received for the alleged supply of goods. 2. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution, can quash show-cause notices and direct the deletion of entries from a government portal when the matter involves disputed questions of fact regarding the supply of goods and the correctness of portal entries. Petitioner's Arguments: The petitioner argued that the show-cause notices should be quashed as they are based on an erroneous entry on the Panchayat/MANREGA portal, for which no payment was received. They relied on a certificate from the Gram Panchayat confirming the erroneous entry and an earlier report from an Assistant Commissioner/Assessing Officer indicating no discrepancy. They sought directions to delete the erroneous entry and quash the impugned notices. Revenue/State's Arguments: The judgment does not record specific arguments made by the revenue or state respondents. However, the Court's reasoning implies that the revenue authority has jurisdiction to investigate the matter.