Honey Rose Varghese Vs State of Kerala (Kerala High Court)
The Kerala High Court addressed a petition filed by Honey Rose Varghese, challenging a show cause notice issued under the Central Goods and Services Tax/State Goods and Services Tax Acts, 2017 (CGST/SGST Acts). The petitioner sought to quash the notice, arguing that the invocation of Section 74 of the Acts was unwarranted. The State, represented by the Senior Government Pleader, acknowledged the petitioner’s right to have their reply to the show cause notice considered before any final adjudication. The petitioner’s counsel focused on the contention that the circumstances did not justify the application of Section 74, referring to a similar case where the court permitted the noticee to raise this point as a preliminary issue. The petitioner requested a similar direction, asking the adjudicating authority to address the validity of the Section 74 invocation before proceeding with the main adjudication.
The High Court, referencing a prior judgment (WP(C)No.31434 of 2024), directed the adjudicating authority to consider the petitioner’s reply and any objections regarding the invocation of Section 74. Specifically, the court mandated that any objection concerning the grounds for issuing the notice under Section 74 be treated as a preliminary issue. The adjudicating authority was instructed to pass an order on this preliminary issue before further adjudicating the show cause notice. The court also ensured that the petitioner would be granted an opportunity for a hearing before any orders were issued. The writ petition was disposed of with these directives, emphasizing the procedural requirement to address the contentious Section 74 invocation as a preliminary matter, thus ensuring due process. This ruling indicates the court’s stance on the importance of procedural fairness in tax adjudication, particularly regarding the application of potentially punitive sections of the CGST/SGST Acts.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
