Britannia Industries Limited Vs Union of India & Ors. (Calcutta High Court)
Conclusion: Since statutory framework under the CGST Act provided adequate mechanisms for addressing assessee’s concerns, including responding to the SCN, participating in adjudication proceedings and availing appellate remedies if dissatisfied with the outcome, therefore, such matter could be effectively adjudicated upon by securing on the adjudicatory process and could not be scuttled by rushing to the writ court.
Held: Assessee-company was engaged in the manufacture and supply of bakery & dairy products, which were distributed to customers and dealers through its multiple units located across India. DGST officer conducted a search at assessee’s premises, resulting in issuance of a show cause (SCN) u/s 74(1) of the CGST Act, 2017, r/w Sec 20 of the IGST Act, 2017. SCN alleged assessee of wrongful availing of benefit of an exemption on the supply of “Kulcha” by misclassifying it as “bread”. Additionally, SCN denied the reduction of assessee’s outward tax liability based on credit notes issued for deficient services and destroyed goods. This denial was grounded on the claim that the corresponding ITC was not reversed by the suppliers or recipients of such goods, as required u/s 34 of the CGST Act. Further, the SCN alleges non-reversal of ineligible ITC by assessee. Thus, the SCN sought recovery of INR 1,05,11,99,662 in GST, along with interest u/s 50 and an equivalent penalty u/s 74(1) of the CGST Act, which came to be challenged before the High Court, contending that the SCN was without jurisdiction and had been issued in gross violation of the principles of natural justice. It was held that writ courts did not interfere in cases where statutory remedies were available unless there was a clear violation of fundamental rights, lack of jurisdiction, or procedural perversity leading to manifest injustice. Assessee had not demonstrated any such exceptional circumstances warranting this Court’s intervention. Instead, the statutory framework under the CGST Act provided adequate mechanisms for addressing assessee’s concerns, including responding to the SCN, participating in adjudication proceedings and availing appellate remedies if dissatisfied with the outcome. The Court emphasized that this decision should not be construed as expressing any opinion on the merits of the assessee’s claims. The adjudicating authority was directed to independently and impartially decide the matter based on the evidence and submissions presented before it.
