Sukhjit Agro Industries vs. Commissioner CGST And Ors

Held

The High Court, without expressing any opinion on the merits of the case, disposed of the writ petition. The Court noted the clarification provided by the learned counsel for the respondents that the observations in the Show Cause Notice were tentative and that the petitioner still had an opportunity to present its case. The Court directed the petitioner to appear before the Competent Authority on May 30, 2022. It further held that the period of 30 days stipulated in the Show Cause Notice would not be an impediment for the Competent Authority to decide the matter on merits, considering the petitioner's submissions, through a speaking order. The ratio decidendi is that a Show Cause Notice, even if appearing to suggest a pre-determined mind, will not be quashed if the respondents clarify that it is tentative and the assessee is still afforded a proper opportunity to be heard and present evidence.

Facts

Sukhjit Agro Industries (the petitioner) filed a writ petition before the Himachal Pradesh High Court challenging a Show Cause Notice dated March 3, 2022, issued by the revenue authorities. The petitioner argued that the notice indicated a pre-determined decision by the authorities, making their response a mere formality. The petitioner, engaged in manufacturing and supplying maize starch and its derivatives, contended that all its products fall under the exempted category as per a notification dated June 28, 2017. The revenue authorities, represented by their counsel, opposed the petition, asserting that the observations in the Show Cause Notice were tentative and no final view had been taken. They pointed to specific paragraphs in the notice that allowed the petitioner to furnish evidence and request a personal hearing.

Key Issues

1. Whether the Show Cause Notice dated March 3, 2022, issued to the petitioner, indicates a pre-determined mind on the part of the revenue authorities, thereby rendering the adjudication process a mere formality? (Question of law) Petitioner's Contention: The petitioner argued that the tone and tenor of the Show Cause Notice demonstrated that the respondents had already made up their minds, and the opportunity to present submissions would be a formality. They relied on the nature of the notice itself to support this claim. Revenue's Contention: The respondents contended that the observations in the Show Cause Notice were tentative and not final. They highlighted that the notice explicitly allowed the petitioner to furnish evidence in support of its defense and to request a personal hearing, indicating that the adjudication process was still open. They referred to specific paragraphs within the Show Cause Notice to substantiate their argument.