Case Note & Summary
The petitioner, Apollo Tyres Limited, challenged a show cause notice dated 2 August 2024 issued by the Additional Director, Directorate General of GST Intelligence, Delhi Zonal Unit, under Section 74 of the CGST Act, SGST Act, and IGST Act. The notice centralised proceedings pending before various State authorities and directed the petitioner to show cause why CGST, SGST, and IGST should not be demanded and recovered, along with interest under Section 50 and penalty under Section 74. The petitioner contended that the notice was barred by limitation as it was issued beyond one year and sought to give retrospective effect to Circular No.212/6/2024 dated 26 June 2024. The respondents raised a preliminary objection that the writ petition was not maintainable at the show cause notice stage. The court, after hearing both sides, held that it would not interfere with the show cause notice at the pre-adjudication stage. The court noted that the notice was issued after investigation based on intelligence, and specific allegations of suppression of facts and misstatement were made. The court observed that the petitioner could raise all contentions, including limitation and retrospective application of the circular, before the adjudicating authority. The writ petition was dismissed, and the petitioner was directed to file a reply to the show cause notice within four weeks, with the adjudicating authority to decide the matter on its own merits without being influenced by any observations in the judgment.
Headnote
A) Constitutional Law - Writ Jurisdiction - Pre-Adjudication Challenge - Article 226 of the Constitution of India - Show Cause Notice - The court held that a show cause notice cannot be interfered with at the pre-adjudication stage unless it is without jurisdiction or issued by an authority not having power. The petitioner's contention of limitation and retrospective application of Circular No.212/6/2024 dated 26 June 2024 can be raised before the adjudicating authority. (Paras 1-8)
B) Goods and Services Tax - Limitation - Show Cause Notice - Section 74 of the Central Goods and Services Tax Act, 2017 - The court declined to entertain the plea of limitation at the stage of show cause notice, observing that the petitioner can raise the issue before the adjudicating authority. (Paras 5-8)
C) Goods and Services Tax - Circular - Retrospective Effect - Circular No.212/6/2024 dated 26 June 2024 - The court did not decide on the retrospective effect of the circular, leaving it open for the petitioner to raise before the adjudicating authority. (Paras 3, 8)
Issue of Consideration
Whether a show cause notice issued under Section 74 of the CGST Act can be challenged in a writ petition at the pre-adjudication stage on grounds of limitation and retrospective application of a circular.
Final Decision
The writ petition is dismissed. The petitioner is directed to file a reply to the show cause notice within four weeks from today. The adjudicating authority shall decide the matter on its own merits without being influenced by any observations made in this judgment.
Law Points
- Writ jurisdiction under Article 226 not to be exercised at show cause notice stage
- Limitation challenge can be raised before adjudicating authority
- Circular cannot be given retrospective effect
Case Details
2024 LawText (BOM) (11) 1203
Writ Petition No.15498 of 2024
M. S. Sonak, Jitendra Jain
Mr. Joseph Kodianthara (Senior Advocate), Mr. Anil D’Souza, Mr. Ram Ochani, Ms. Sangeeta Yadav, Ms. Kavita Shukla
Union of India, The Additional Director, Directorate General of GST Intelligence Delhi Zonal Unit, The Additional / Joint Commissioner Central Goods and Service Tax, Thane
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petition under Article 226 challenging a show cause notice issued under Section 74 of the CGST Act, SGST Act, and IGST Act.
Remedy Sought
Petitioner sought quashing of show cause notice dated 2 August 2024 on grounds of limitation and retrospective application of Circular No.212/6/2024.
Filing Reason
Petitioner contended that the show cause notice was issued beyond the period of one year and sought to give retrospective effect to a circular.
Issues
Whether a show cause notice under Section 74 of the CGST Act can be challenged in a writ petition at the pre-adjudication stage.
Whether the show cause notice is barred by limitation.
Whether the show cause notice seeks to give retrospective effect to Circular No.212/6/2024.
Submissions/Arguments
Respondents argued that the writ petition is not maintainable at the show cause notice stage; petitioner should reply and raise all contentions before the adjudicating authority.
Petitioner argued that the show cause notice is barred by limitation and seeks to give retrospective effect to Circular No.212/6/2024, relying on Delhi High Court decision in M/s. JSW Steel Limited.
Ratio Decidendi
A show cause notice cannot be interfered with at the pre-adjudication stage unless it is without jurisdiction or issued by an authority not having power. The petitioner can raise all contentions, including limitation and retrospective effect of a circular, before the adjudicating authority.
Judgment Excerpts
By this petition under Article 226 of the Constitution of India, the petitioner has challenged the show cause notice dated 2 August 2024 issued by respondent no.2 to the petitioner to centralise and show cause before respondent no.3 why CGST, SGST and IGST should not be demanded and recovered under Section 74 of the Central Goods and Services Tax Act (CGST), State Goods and Services Tax Act (SGST) and Integrated Goods and Services Tax Act (IGST).
We have heard the learned senior counsel for the petitioner and the learned counsel for the respondents.
At the outset, we wish to state that the show cause notice is issued after the investigation was initiated into the petitioner's transactions based on intelligence.
In the show cause notice, a specific allegation is made on suppressing facts and misstatement regarding non-furnishing details of outward supplies under Section 37 of the CGST Act.
We are of the opinion that the present petition is not required to be entertained at this stage.
The petitioner is directed to file a reply to the show cause notice within four weeks from today.
The adjudicating authority shall decide the matter on its own merits without being influenced by any observations made in this judgment.
Procedural History
The petitioner filed a writ petition under Article 226 of the Constitution of India challenging a show cause notice dated 2 August 2024. The respondents raised a preliminary objection regarding maintainability. The court heard arguments and reserved judgment on 11 November 2024, pronouncing it on 14 November 2024.
Acts & Sections
- Central Goods and Services Tax Act, 2017: Section 15(3)(b), Section 37, Section 50, Section 74
- State Goods and Services Tax Act: Section 74
- Integrated Goods and Services Tax Act: Section 20, Section 74
- Constitution of India: Article 226
