Case Law Details
Abdul Rahiman Kunju Vs Deputy Commissioner (Kerala High Court)
Summary : The Kerala High Court dismissed a writ appeal challenging proceedings initiated under Section 74 of the CGST Act, 2017, while clarifying that an earlier communication relied upon by the authorities could not be treated as a statutory notice. The appellant argued that the learned Single Judge had wrongly treated Ext.P2 as a notice under Section 74 and that the final order passed pursuant to it was void. The appellant contended that Ext.P2 was merely an intimation and that prior communications referred to by the department did not satisfy the statutory requirements. Based on this, the appellant sought interference under Article 226 of the Constitution.
The State conceded that Ext.P2 was not a notice under Section 74 but maintained that Ext.P3 was the actual statutory notice issued in Form GST DRC-01 under Rule 142(1)(a) of the GST Rules. The State further argued that the appellant had earlier accepted Ext.P3 as a valid show cause notice, as reflected in Ext.P5 reply submitted in response to Exts.P3 and P4. According to the State, the challenge raised later through written argument notes was only an afterthought.
The Division Bench observed that the learned Single Judge was incorrect in treating Ext.P2 as a notice under Section 74. However, the Court held that Ext.P3 prima facie satisfied the statutory requirements of Section 74. The Court also noted that the appellant had responded to Ext.P3 and Ext.P4 as show cause notices before later disputing their validity.
The Court reiterated that writ jurisdiction under Article 226 is ordinarily invoked only when orders are shown to be void or passed without jurisdiction. Since the appellant had an effective statutory appellate remedy and the validity of Ext.P3 could still be examined by the appellate authority, the Court declined to interfere.
Accordingly, the writ appeal was dismissed. However, the Court clarified that it did not approve the finding that Ext.P2 was a Section 74 notice and granted liberty to the appellant to pursue statutory appellate remedies against Ext.P9, including all objections relating to Exts.P3 and P4.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The appellant challenges the judgment of the learned Single Judge of this Court in WP(C)No.39831 of 2025, asserting that the findings of facts therein are incorrect; and hence the conclusions untenable.
2. Sri. Bobby John – learned counsel for the appellant, printed that the learned Single Judge has held Ext.P2 to be a notice under Section 74 of the CGST Act 2017 (‘Act’ for short); and thus proceeded to dismiss the writ petition, however, reserving liberty to his client to invoke alternative statutory remedies against Ext.P9 order. He argued that, even ex facie, Ext.P2 is not a notice under Section 74 of the Act; and further that the argument of the respondents, that there were intimations prior to it, would not suffice within the statutory scheme. He contented that, therefore, Ext.P9 is a void order; and hence, amenable to challenge before this Court, under Article 226 of the Constitution of India.
3. In response to the above, Smt. Thusara James – learned Senior Government Pleader, conceded that Ext.P2 is not a notice under Section 74 of the Act, but only an intimation; which was followed by Ext.P3 notice, as evident from its title itself. She argued that the appellant never had a case that Ext.P3 was not a proper notice, as luculent from their reply – namely Ext.P5, where they unequivocally say that it is their response to the statutory show cause notice. She contended that, this is fortified by the factum of the Office of the Deputy Commissioner having issued to the appellant Ext.P4 reminder to Ext.P3 notice, consequent to which alone, they filed Ext.P5 reply. She predicated that, therefore, the present attempt is only one in experimentation, since, as the learned Single Judge has rightly found, the appellant is obligated to challenge Ext.P9 only under the statutory mechanism.
4. There is force in the afore submissions of Smt. Thushara James, though we are not in approval of the finding of the learned Single Judge that Ext.P2 is a notice under Section 74 of the ‘Act’. Ex facie, Ext.P2 is, at the best, is an intimation or communication to the appellant; and it refers to certain other intimations in the past, including a notice dated 28.09.2020, asking them to produce their books of accounts. However, Ext.P3 certainly is a notice under Section 74 of the Act, and it clearly mentions therein, to have been issued in form “GST DRC – O1”, invoking Rule 142(1)(a) of the GST Rules (‘Rules’ for short).
5. The contra argument of Sri. Bobby John is that Ext.P3 cannot be construed to be a notice, but is, at the best, a summary of a show cause notice; and hence, that his client filed their “argument notes” before the Officer, contending so.
6. Even when we hear Sri. Bobby John as afore, the fact remains that Ext.P3 was succeeded by Ext.P4 reminder issued by the Office of the Deputy Commissioner; consequent to which, the appellants filed Ext.P5 objections. They clearly state therein that they are making a reply to the show cause notice, referring specifically to Exts.P3 and P4; but they appear to have had an afterthought, which is evident from the subsequent “argument notes” they filed before the Authority, contending to the contrary.
7. We do not propose to speak any further because, it is well settled that, only if the impugned orders are pleaded and established to be void or issued without competence, can, normally, a challenge against it be mounted before this Court, under Article 226 of the Constitution of India.
8. The learned Single Judge, though have found – in our view incorrectly – that Ext.P2 is the notice under Section 74 of the Act, he was fully justified in directing the appellant to invoke their alternative remedies, for the reasons already noticed.
9. We say as afore because, prima facie, we find Ext.P3 to satisfy the requirements under Section 74 of the ‘Act’, though it will always be open to the appellant to raise a contention to the contrary before the Appellate Authority, which will then consider such in terms of law. We are further persuaded to this opinion, not merely because we notice Ext.P5 reply issued by the appellant; but since, they have raised their contention that Ext.P3 is not a notice, but only a summary of such for the first time only through their “Notes of Argument” – namely Ext.P8. This can surely be open to scrutiny and evaluation by the statutory Appellate Authority, if so raised as a ground.
10. In such circumstances, we dismiss this Writ Appeal; however, clarifying that the findings of the learned Single Judge, to the effect that Ext.P2 is a notice under Section 74 of the Act, does not find our approval; but, with all other observations and directions being confirmed.
11. The appellant will, consequently, be at liberty to move the statutory appellate Authority against Ext.P9 with all contentions, including on the merits of Exts.P3 and P4; and all such will be considered by the said Authority as per law.
Author Bio
