Case Law Details
Nektar Therapeutics India Pvt Ltd Vs Union of India (Telangana High Court)
In a significant decision by the Telangana High Court, a show cause notice issued to Nektar Therapeutics India Pvt Ltd was quashed on the grounds of being issued by an improper officer. This case underlines the importance of jurisdiction and the correct exercise of authority in issuing show cause notices under the Central Tax, Central Excise & Service Tax regulations.
The case pertained to a show cause notice issued for the recovery of a previously granted refund. This refund was reportedly granted erroneously. However, the Telangana High Court determined that the Assistant Commissioner, who issued the notice, was not the proper officer, as clarified by circular No.31/05/2018-GST. The respondents conceded to this contention, agreeing that the notice could be set aside and reissued by a proper officer. However, the counsel for the petitioner argued that the initial claim for the refund had been affirmed by the jurisdictional Customs, Excise & Service Tax Appellate Tribunal (CESTAT), thus demanding judicial restraint in the recovery process.
Conclusion: The Telangana High Court’s decision in the case of Nektar Therapeutics India Pvt Ltd vs Union of India reinforces the necessity of issuing authorities correctly executing their roles. This case serves as a significant precedent for maintaining appropriate jurisdiction and the exercise of authority in future legal scenarios. Furthermore, it upholds the importance of judicial discipline and propriety when dealing with established and affirmed claims.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Mr. Sandeep Chilana, learned counsel for the petitioner; Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India for respondent No.1; and Mr. Dominic Fernandes, learned counsel for respondents No.2 to 6.
2. Challenge made in this writ petition is to the show cause notice No.04/2023-24 dated 17.04.2023 issued by respondent No.5 i.e., Assistant Commissioner of Central Tax, Central Excise & Service Tax, Medchal Division, Medchal Commissionerate.
3. Though the challenge has been made on various grounds, learned counsel for respondents No.2 to 6 fairly concedes to the contention advanced by learned counsel for the petitioner that respondent No.5 i.e., Assistant Commissioner, is not the proper officer as clarified by circular No. 31/05/2018-GST dated 09.02.2018 issued by the Central Board of Excise and Customs inasmuch as the proper officer would be Additional or Joint Commissioner of Central Tax. Therefore, he submits that the show cause notice may be set aside with liberty to the respondents to issue the same afresh by a proper officer.
4. At this stage, learned counsel for the petitioner submits that the show cause notice has been issued for recovery of refund earlier granted to the petitioner. The recovery is sought to be made on the ground that the refund was made erroneously. He submits that insofar refund is concerned, claim of the petitioner was affirmed by the jurisdictional Customs, Excise & Service Tax Appellate Tribunal (CESTAT) which order has attained finality. Therefore, judicial discipline and propriety demands that respondent should be restrained from taking steps for recovery of the refund granted.
5. Having heard learned counsel for the parties, particularly the submission of learned counsel for respondents No.2 to 6, we set aside the show cause notice dated 17.04.2023 making it clear that proper officer shall hold consultation with the petitioner if he intends to issue fresh show cause notice i.e., pre show cause notice consultation. All contentions are kept open.
6. Writ petition is accordingly allowed.
Miscellaneous applications pending, if any, shall stand closed. However, there shall be no order as to costs.
