1. A show cause-cum-demand notice dated July 29, 2021 issued by the Deputy Commissioner CGST & CEX, respondent no.1, is under challenge in this writ petition. By the impugned notice, explanation has been called for from the petitioners as to why action, as proposed in paragraph 8 thereof, may not be taken. The petitioners have also challenged the vires of section 16(2)(c) of the Central Goods and Services Tax Act, 2017 (hereafter ‘the CGST Act’, for short).
2. Having heard learned advocate for the petitioners, prima facie, we find no reason to interfere with the show cause notice in view of the decision of the Supreme Court reported in (2004) 3 SCC 440 (The Special Director and anr. Vs. Mohd. Ghulam Ghouse and anr.). We would have relegated the petitioners to the respondent no.1, but for the challenge to the vires of section 16(2)(c) of the CGST Act. The point raised needs to be dealt with upon notice to the respondents.
3. Issue notice to the respondents, returnable on January 11, 2022. Since the vires of section 16(2)(c) of the CGST Act is under challenge, the petitioners are directed to put the Attorney General for the Union of India on notice.
4. Pendency of the writ petition shall, however, not preclude the respondent no.1 to take the proceedings arising out of the impugned show cause notice to its logical conclusion; however, any order passed in such proceedings shall be subject to and abide by the result of this writ petition. If the petitioners are so advised, they may participate in the proceedings without prejudice to their rights and contentions herein.