Synthroma Laboratories Vs State of West Bengal & Ors. (Calcutta High Court)
A Landmark Ruling for Timely Compliance and Statutory Benefits
In a significant decision, the Calcutta High Court, in the case of SYNTHROMA LABORATORIES vs. THE STATE OF WEST BENGAL & ORS. (Vide WPA 4149 of 2025 dated 30.06.2025), has firmly asserted that departmental delay or inaction on pre-show cause notices (pre-SCNs) cannot be allowed to undermine statutory benefits available to taxpayers, particularly under beneficial schemes like Section 128A of the GST Act. This ruling underscores the critical responsibility of proper officers to ensure timely and reasoned action on pending proceedings, thereby safeguarding the taxpayer’s right to voluntary compliance.
Facts of the Case:
The petitioner, Synthroma Laboratories, challenged a pre-SCN issued in Form GST DRC-01A under Section 74, pertaining to the tax period 2019–2021. The core of the petitioner’s grievance was the department’s prolonged inaction: the pre-SCN had been issued almost a year prior, yet no further proceedings had been initiated. Crucially, the notice was neither formally dropped nor converted into a formal Show Cause Notice (SCN) under Section 73 or 74.
The petitioner argued that this administrative limbo severely prejudiced its ability to avail benefits under the settlement scheme introduced via Section 128A of the Act. This scheme, designed to promote voluntary compliance, requires the issuance of a formal notice under Section 73(1) as a prerequisite for application. Faced with the department’s inertia, the petitioner sought a specific directive to the proper officer to either close the proceedings based on its reply or issue a proper notice under Section 73(1) or 74(1), thereby enabling access to Section 128A benefits.
