Mount Everest Breweries Limited Contract Manufacturing Unit Of United Breweries Limited vs. Union Of INDIA

Held

The Court held that a writ petition against a show cause notice is not maintainable when an efficacious alternative statutory remedy is available. The Court noted that the respondent had only issued a show cause notice, asking the petitioner to explain why GST should not be imposed. Citing Supreme Court judgments in Hindustan Coca Cola Beverage Private Ltd. vs. Union of India, Hameed Kunju vs. Nizam, Ansal Housing and Construction Limited vs. State of Uttar Pradesh, and Malladi Drugs and Pharma Ltd. vs. Union of India, the Court emphasized that statutory remedies, such as appeals, must be availed. Therefore, the Court found it improper to entertain the writ petition. The application for dismissal of the petition was allowed, and the petition was dismissed on the ground of efficacious alternative statutory remedy, with liberty to the petitioner to avail the alternative remedy.

Facts

The petitioner, Mount Everest Breweries Limited, engaged in manufacturing and selling alcoholic beverages, filed a writ petition challenging a show cause notice dated June 30, 2022, issued by Respondent No. 2 (Directorate General of Goods and Service Tax). The notice alleged that the petitioner's activities of manufacturing and selling beer under United Breweries Ltd. (UBL) brand names constituted job work services, liable to 18% GST. The petitioner argued that the amounts retained by them as a Contractual Bottling Unit (CBU) were not liable to GST, and that GST was payable by UBL for granting brand usage rights. The petitioner contended the show cause notice was issued with premeditation and was a nullity.

Key Issues

1. Whether a writ petition is maintainable against a show cause notice issued by the Directorate General of Goods and Service Tax, particularly when alleged to be issued with premeditation, under Article 226 of the Constitution of India? Petitioner's Arguments: The petitioner argued that the writ petition was maintainable because the show cause notice was issued with premeditation and was arbitrary and unreasonable, citing the Supreme Court's decision in Siemens Ltd. v. State of Maharashtra. They contended that the notice was a nullity as the petitioner was not chargeable to GST, and UBL was the party liable to pay GST on brand usage rights. They also relied on the Calcutta High Court's decision in Joyous Blocks & Panels Private Limited. Respondents' Arguments: The respondent argued that a writ petition against a show cause notice is not maintainable as the petitioner has an efficacious alternative remedy to contest the notice before the adjudicating authority, citing various Supreme Court judgments.