Case Law Details
Lakshmi Mobile Accessories Vs Joint Commissioner (Kerala High Court)
The Kerala High Court examined a writ petition challenging a show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017. The petitioner sought quashing of the notice, separate adjudication orders for different financial years from 2018–2019 to 2023–2024, sufficient time to respond, and an opportunity for cross-examination. The show cause notice dated 29 July 2024 proposed imposition of tax, penalty, and interest, and scheduled a personal hearing on 22 August 2024. However, the petitioner submitted a detailed reply only on 3 December 2024.
The petitioner argued that the authority was proceeding hastily and intended to issue a composite order without granting adequate opportunity. The Court found these concerns to be speculative, noting that the authority had already provided an opportunity for hearing and had not acted prematurely. It held that there was no evidence to suggest denial of procedural fairness at this stage.
Considering that the limitation period for passing orders for 2017–2018 was expiring on 5 February 2025, the Court declined to interfere with proceedings for that year. However, for subsequent years, the Court directed that reasonable opportunity of hearing be provided and observed that separate adjudication orders should be passed for each financial year. It granted liberty to the authority to proceed in accordance with law, ensuring compliance with procedural requirements. The writ petition was accordingly disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
Petitioner challenges Ext.P1 show cause notice apart from seeking a direction to pass separate orders for the various financial years and also to grant sufficient time for furnishing a reply for financial years 20182019 to 2023-2024 and provide an opportunity for cross examination.
2. I have heard Sri.K.S.Hariharan Nair, the learned counsel for the petitioner as well as Smt.Jasmin M.M., the learned Government Pleader.
3. As per Ext.P1 show cause notice dated 29.07.2024 issued under Section 74 of the Central Goods and Services Tax Act, 2017; petitioner was called upon to answer the proposal for imposing tax, penalty and interest on account of the reasons mentioned therein. Though a personal hearing was scheduled to be held on 22.08.2024 as per Ext.P1, petitioner filed a detailed reply only on 03.12.2024, covering the entire period for which the show cause notice was issued.
4. Petitioner contended that the second respondent is proposing to issue a composite order for all the years and is proceeding in haste to complete the determination under Section 74 of the Act without granting sufficient opportunity to the petitioner. Though the petitioner contended that an opportunity for cross examination is not being granted and a composite order is proposed to be issued, there is nothing on record to assume that any procedure contrary to law would be adopted by the second respondent. The contention now raised are all assumptions of the petitioner, which cannot be taken into reckoning at this juncture. In this context, it needs to be noted that by Ext.P1 show cause notice petitioner was granted an opportunity to appear for personal hearing on 22.08.2024 and second respondent did not proceed further until petitioner chose to file a reply on 03.12.2024. Therefore, it cannot be stated that sufficient opportunity is not being granted.
5. Considering the fact that 05.02.2025 is the last date for passing orders under Section 74 of the Act in respect of 2017-2018, I am of the view that it is not proper for this Court to interfere in respect of the determination now sought to be done through Ext.P1 especially in relation to the aforesaid year. However, if an opportunity for cross examination is required by law and is not granted, the same is a matter to be considered at the appropriate stage by the appropriate authority. This Court cannot at this juncture assume that the apprehension of the petitioner is legally justified, especially in the absence of any material.
6. However taking note of the apprehension of the petitioner that a composite order will be issued by the second respondent, I am of the view that, insofar as years 2018-2019 onwards are concerned, the petitioner ought to be granted a reasonable opportunity of hearing since the limitation does not expire in the immediate future. In this context, the observation of a learned single Judge in W.P.(C) No.35156/2024 that separate adjudication orders ought to be issued not withstanding a composite show cause notice is apposite to be borne in mind. I am in accord with the said conclusion.
7. Hence, liberty is granted to the competent amongst the respondents to pass appropriate orders for 2017-18, pursuant to Ext.P1 show cause notice within the period of limitation, in accordance with law, after granting an opportunity of hearing. Thereafter the Authority will be at liberty to pass separate orders of determination for each of the years mentioned in the show cause notice, after granting reasonable opportunity of hearing to the petitioner, in accordance with law.
The writ petition is disposed of.
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