Case Law Details

Case Name : Genus Power Infrastructure Ltd. Vs Central Goods and Service Tax (Rajasthan High Court)
Appeal Number : S.B. Civil Writ Petition No. 185/2021
Date of Judgement/Order : 03/03/2021
Related Assessment Year :

Genus Power Infrastructure Ltd. Vs Central Goods and Service Tax (Rajasthan High Court)

In the present facts and circumstances, the writ petition filed by the petitioner deserves to be dismissed for the reasons; firstly the matter is at the stage of show cause notice and opportunity of filing reply and personal hearing is still available with the petitioner; secondly the petitioner, if aggrieved by the order of the Adjudicating Authority, has a statutory remedy of filing appeal before the Appellate Authority as provided under Section 85 of the Act; thirdly against the order of the Appellate Authority, the petitioner has a right to file second appeal before the Appellate Tribunal as provided under Section 86 of the Act.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. This writ petition has been filed by the petitioner with the following prayer:-

“It is therefore respectfully prayed that the writ petition be kindly allowed and this Hon’ble Court may be pleased to:

(i) Issue an appropriate Writ, Order or direction quashing and setting aside the Notice dated 25.09.2020.

(ii) Issue an appropriate Writ, Order or direction, quashing and setting aside the Pre-Show Cause Notice dated 3.9.20 & 4.9.20 and the final Audit Report dated 09.10.2020, issued by the Respondents.

(iii) Any other appropriate writ, order or direction as may be deemed just and proper in the facts and circumstances of the case, be kindly passed in favour of the petitioner firm.”

2. Counsel for the petitioner submitted that the show cause notice dated 25.09.2020 has been issued by the department without providing audit report to the petitioner. Counsel further submits that there is nothing left with the authority to decide in the matter finally, as a bare reading of the show cause notice clearly shows that the Adjudicating Authority has already made up its mind and pre-determined the demand.

3. In support of his contention, counsel for the petitioner relied upon the judgment passed by the Hon’ble Supreme Court in the matter of M/s. Siemens Ltd. Vs. State of Maharashtra & Ors. reported in 2006(12) SCC 33 and Oryx Fisheries Pvt. Ltd. Vs. Union of India & Ors. reported in 2010(13) SCC 427.

4. Learned counsel appearing for the respondent department submitted that the matter is at the stage of show cause notice and the petitioner has a right to file reply and the opportunity of personal hearing is also available to the petitioner and thereafter only the matter is to be adjudicated by the Adjudicating Authority. Counsel further submits that if the petitioner feels aggrieved by the final order passed by the Adjudicating Authority, the petitioner is having a statutory remedy of filing appeal under Section 85 of the Finance Act,1994 before the Appellate Authority and further against the order of Appellate Authority, the petitioner is having a right to file second appeal as provided under Section 86 of the Act before the Appellate Tribunal.

5. In support of his contention, counsel relied upon the judgment passed by the Hon’ble Supreme Court in the matter of Union of India & Ors. Vs. Coastal Container Transporters Association & Ors. reported in 2019(2) TMI 1497 wherein it has been held as under:-

“19. On the other hand, we find force in the contention of the learned senior counsel, Sri Radhakrishnan, appearing for the appellants that the High Court has committed error in entertaining the writ petition under Article  226 of Constitution of India at the stage of show cause notices. Though there is no bar as such for entertaining the writ petitions at the stage of show cause notice, but it is settled by number of decisions of this Court, where writ petitions can be entertained at the show cause notice stage. Neither it is a case of lack of jurisdiction nor any violation of principles of natural justice is alleged so as to entertain the writ petition at the stage of notice. High Court ought not to have entertained the writ petition, more so, when against the final orders appeal lies to this Court. The judgment of this Court in the case of Union of India & Anr. v. Guwahati Carbon Ltd. (supra) relied on by the learned senior counsel for the appellants also supports their case. In the aforesaid judgment, arising out of Central Excise Act, 1944, this Court has held that excise law is a complete code in order to seek redress in excise matters and held that entertaining writ petition is not proper where alternative remedy under statute is available. When there is a serious dispute with regard to classification of service, the respondents ought to have responded to the show cause notices by placing material in support of their stand but at the same time, there is no reason to approach the High Court questioning the very show cause notices. Further, as held by the High Court, it cannot be said that even from the contents of show cause notices there are no factual disputes. Further, the judgment of this Court in the case of Malladi Drugs & Pharma Ltd. v. Union of India, 2004 (166) ELT-153 (S.C.) relied on by the learned senior counsel for the appellants also supports their case where this Court has upheld the judgment of the High Court which refused to interfere at show cause notice stage.”

6. Counsel further relied upon the judgment passed by the Hon’ble Supreme Court in the matter of Commissioner of Central Excise, Haldia Vs. Krishna Wax Private Limited reported in (2020) 12 SCC 572 : 2019 SCC Online SC 1470 wherein it has been held as under:-

“13. It must be noted that while issuing a show cause notice under Section 11A of the Act, what is entertained by the Department is only a prima facie view, on the basis of which the show cause notice is issued. The determination comes only after a response or representation is preferred by the person to whom the show cause notice is addressed. As a part of his response, the concerned person may present his view point on all possible issues and only thereafter the determination or decision is arrived at. In the present case even before the response could be made by the respondent and the determination could be arrived at, the matter was carried in appeal against said Internal Order. The appellant was therefore, justified in submitting that the appeal itself was pre­mature.

14. It has been laid down by this Court that the excise law is a complete code in itself and it would normally not be appropriate for a Writ Court to entertain a petition under Article 226 of the Constitution and that the concerned person must first raise all the objections before the authority who had issued a show cause notice and the redressal in terms of the existing provisions of the law could be taken resort to if an adverse order was passed against such person. For example in Union of India and another vs. Guwahati Carbon Limited, it was concluded; “The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution”, while in Malladi Drugs and Pharma Ltd. vs. Union of India, it was observed:-

“…The High Court, has, by the impugned judgment held that the Appellant should first raise all the objections before the Authority who have issued the show cause notice and in case any adverse order is passed against the Appellant, then liberty has been granted to approach the High Court… … in our view, the High Court was absolutely right in dismissing the writ petition against a mere show cause notice.”

7. Counsel further relied upon the judgment passed by the Hon’ble Supreme Court in the matter of Malladi Drugs And Pharma Limited Vs. Union of India & Another reported in (2020) 12 SCC 808 wherein it has been held as under:-

“1. These Appeals are against the Judgment of the High Court dated 5-11-1997. Briefly stated, the facts are as follows: The Appellant is a bulk drug manufacturer and uses platinum catalyst. As the catalyst loses its character after some time, it is regenerated. According to the Department such regeneration amounted to manufacture. Thus, a show cause notice was issued to the Appellant as to why they should not pay duty. The Appellant filed a reply to the show cause notice. They then filed a writ petition contending that there was no manufacture. In the writ petition they also challenged Notification No. 230/88, dated 06-07-1988.

2. The High Court, has, by the impugned judgment held that the Appellant should first raise all the objections before the Authority who have issued the show cause notice and in case any adverse order is passed against the Appellant, then liberty has been granted to approach the High Court.

3. The High Court’s order was passed way back in 1997. Neither party knows whether the Department has proceeded further and/or whether any order has been passed pursuant to the show cause notice. Even otherwise, in our view, the High Court was absolutely right in dismissing the writ petition against a mere show cause notice. We see no reason to interfere.The appeals stand dismissed. There will be no order as to costs.”

8. Heard counsel for the parties and perused the record.

9. In the present facts and circumstances, the writ petition filed by the petitioner deserves to be dismissed for the reasons; firstly the matter is at the stage of show cause notice and opportunity of filing reply and personal hearing is still available with the petitioner; secondly the petitioner, if aggrieved by the order of the Adjudicating Authority, has a statutory remedy of filing appeal before the Appellate Authority as provided under Section 85 of the Act; thirdly against the order of the Appellate Authority, the petitioner has a right to file second appeal before the Appellate Tribunal as provided under Section 86 of the Act.

10. In that view of the matter, this writ petition stands dismissed.

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