M/S Study Metro Edu Consultant PVT. LTD. Through Its Authorised Signatory Abhishek Bajaj vs. Joint Director

Held

The Court held that while a writ petition against a show-cause notice is ordinarily not maintainable, it can be entertained if the notice is issued without jurisdiction or with premeditation. The Court acknowledged that the show-cause notice was exhaustive and contained findings, but stated these cannot be treated as final. The Court noted that the Investigating Authority (DGGSTI) and the Adjudicating Authority (Deputy/Assistant Commissioner) are different. The Investigating Authority's role was to form an opinion for issuing the notice, while the Adjudicating Authority, a quasi-judicial authority, would adjudicate based on the material. The Court emphasized that the Adjudicating Authority should not be influenced by the Investigating Authority's observations. Relying on Circular No. 31/05/2018-GST, the Court noted that the adjudication would be done by the Central Tax Officer of the Executive Commissionerate. The respondents also indicated readiness for adjudication by an officer of the rank of Additional Commissioner/Joint Commissioner if the Court deemed it appropriate. The Court clarified that any observations on merit in the investigation stage would not bind the Adjudicating Authority. The writ petition was dismissed, with a direction that if the petitioner applied in writing for adjudication by an Additional Commissioner/Joint Commissioner, a corrigendum would be issued; otherwise, the matter would be adjudicated as per the Circular.

Facts

The petitioner, M/s Study Metro Edu Consultant Pvt. Ltd., a SaaS company providing student recruitment solutions and overseas advisory services, challenged a show-cause notice dated 30.09.2023 issued by the Joint Director, Directorate General of Goods & Service Tax Intelligence (DGGSTI). The petitioner argued that services rendered to foreign universities constitute an export of service under Section 2(6) of the IGST Act and are not intermediary services. The DGGSTI initiated proceedings to classify these services as intermediary services under Section 2(13) of the IGST Act, treating the petitioner as an agent of foreign universities. The petitioner had previously appeared for summons, provided documents, and submitted a reply to a notice dated 18.11.2022. The DGGSTI, after an enquiry, concluded that a show-cause notice under Section 74 of the CGST Act was warranted.

Key Issues

1. Whether the writ petition is maintainable against a show-cause notice issued under Section 74 of the CGST Act, particularly when the petitioner alleges premeditation and a predetermined conclusion by the issuing authority. 2. Whether the services provided by the petitioner to foreign universities constitute an 'export of service' under Section 2(6) of the IGST Act, or 'intermediary services' under Section 2(13) of the IGST Act. Petitioner's arguments: The petitioner contended that the writ petition is maintainable because the show-cause notice was issued with premeditation, citing paragraphs 29, 30, 36-37, 41, 43, 45, 50, 70, and 72 of the notice which allegedly contain pre-judged findings. They argued that even if the services were intermediary, the place of supply is Indore, making it an intra-state supply under Section 8(2) of the IGST Act, thus precluding the invocation of IGST provisions for inter-state transactions. They relied on *Siemens Limited v/s State of Maharashtra & Others* and other judgments for the principle that writ petitions are maintainable against notices issued with premeditation. Respondents' arguments: The respondents argued that writ petitions against show-cause notices are generally not maintainable. They submitted that any findings in the show-cause notice are prima facie and not binding on the adjudicating authority. They also referred to Circular No. 31/05/2018-GST, clarifying that the show-cause notice should be adjudicated by the Central Tax Officer of the Executive Commissionerate, who may be subordinate to the issuing authority, but this does not invalidate the proceedings. They relied on *Abhishek Mundhra v/s A.D.G., D.G. Of Revenue Intelligence, Chennai* and other cases.