Writ Petition Against Single SCN for Multiple Years Dismissed; Appeal Remedy Exists

UBS Exports International Pvt. Ltd. Vs State of West Bengal & Ors. (Calcutta High Court)

Calcutta High Court has dismissed a writ petition filed by UBS Exports International Pvt. Ltd. (hereinafter “the petitioners”) challenging a show cause notice (SCN) and a subsequent order issued under Section 74 of the West Bengal Goods and Services Tax (WBGST) / Central Goods and Services Tax (CGST) Act, 2017. The petition sought to quash the proceedings on the grounds that the SCN improperly combined multiple tax periods. The Court, however, emphasized the existence of an efficacious alternative remedy in the form of a statutory appeal.

The petitioners filed the writ petition after the final order dated November 21, 2024, was passed under Section 74(9) of the said Act, following an SCN issued on July 2, 2024. Significantly, the petitioners did not challenge the SCN immediately upon its issuance, opting to approach the High Court only after the final order was rendered.

Mr. Bag, representing the petitioners, argued that the show cause notice was fundamentally flawed as it sought to combine multiple tax periods into a single notice. This practice, he contended, was not sustainable under the GST regime. In support of this assertion, Mr. Bag cited several judicial precedents from other High Courts:

• Titan Company Ltd. v. Joint Commissioner of GST & Central Excise ([2023] 159 com162 (Madras)): This Madras High Court judgment was presented to argue that respondents should not be permitted to “bunch” show cause notices for consecutive tax periods. The Madras High Court in this case had entertained a similar writ petition and quashed the SCN.
• M/s Veremax Techonologie Services Limited v. The Assistant Commissioner of Central Tax (2024:KHC 36293): The Karnataka High Court, relying on the Titan Company Ltd. judgment and a Supreme Court decision in State of Jammu and Kashmir and others vs. Caltex (India) Ltd. (AIR 1966 SC 1350), had concluded that a single consolidated show cause notice for multiple assessment years contravenes GST provisions and established legal precedents.
• M/s Bangalore Golf Club versus Assistant Commissioner of Commercial Taxes (Enforcement): Another Karnataka High Court decision cited by the petitioners.

Mr. Bag submitted that, based on these judgments, the Calcutta High Court was competent to entertain the writ petition and, given the alleged unsustainability of the SCN, the final order should be set aside.

In response, Mr. Siddiqui, learned Additional Government Pleader and Senior advocate appearing for the State, vehemently opposed the writ petition. He asserted that the petitioners possessed an alternative remedy in the form of an appeal, and as such, the writ petition should not be entertained. Mr. Siddiqui argued that all points raised by the petitioners could be adequately addressed and decided by the appellate authority, negating the need for the High Court’s interference at this stage.

After hearing both parties, the Court noted the comprehensive scheme of the WBGST/CGST Act, which explicitly provides for an appeal remedy against orders passed under Section 74 or Section 73 of the Act. The Court was of the view that, ordinarily, there is no scope to entertain a writ petition under Article 226 of the Constitution of India when an efficacious alternative remedy is available. The petitioners, therefore, could not be permitted to bypass this statutory remedy.

Regarding the judicial precedents cited by the petitioners, the Court made several observations. While acknowledging that the Madras High Court in Titan Company Ltd. had entertained a writ petition and quashed an SCN on similar grounds (bunching of show cause notices), the Calcutta High Court pointed out that the issue of alternative remedy was not considered, nor apparently raised, by the respondents in that particular case.

Similarly, concerning the Karnataka High Court’s judgment in M/s Veremax Techonologie Services Limited, which relied on Titan Company Ltd. and Caltex (India) Ltd. to conclude that consolidated SCNs for multiple assessment years were flawed, Mr. Siddiqui highlighted that these judgments were delivered under Section 73 of the Act, not Section 74, as was the case with the petitioners’ matter.

Ultimately, the Calcutta High Court emphasized the availability of an efficacious alternative remedy. It stated that all issues the petitioners sought to raise, including the alleged flaw in the consolidated SCN, could be competently decided by the appellate authority. The Court further noted the petitioners’ delay in challenging the SCN. They did not initiate legal action immediately after the SCN was issued, choosing to file the writ petition only after the final order had been passed. The Court characterized this belated attempt as an effort to abruptly stall the multi-tiered adjudicatory process enshrined in the GST Act.

Concluding its judgment, the Calcutta High Court found no exceptional circumstances warranting interference under its writ jurisdiction. No adequate explanation for the delay in filing the petition was provided. Consequently, the writ petition was dismissed without any order as to costs. The Court directed all parties to act on the basis of the server copy of the order downloaded from its official website.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. Affidavit of service filed in Court today is retained with the record.

2. Challenging a show cause notice dated 2^ndJuly 2024 and the impugned order dated 21^st November 2024 passed under Section 74 of the WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”), the instant writ petition has been filed.

3. Admittedly, in this case immediately after the show cause notice was issued, the petitioners did not approach this Court to challenge the same. It is only after the final order dated 21^stNovember 2024 under Section 74(9) of the said Act was passed, the petitioners have approached this Court by filing the instant writ petition.

4. Mr. Bag, learned advocate appearing for the petitioners would submit that the show-cause notice is flawed as the same seeks to combine multiple tax period. In support of his aforesaid contention he has placed reliance on the following judgments:-

• Titan Company Ltd. v. Joint Commissioner of GST & Central Excise delivered by the Hon’ble High Court of Madras reported in [2024] 159 com162 (Madras)
• M/s Veremax Techonologie Services Limited v. The Assistant Commissioner of Central Tax delivered by the Hon’ble High Court of Karnataka (Neutral citation : 2024:KHC 36293)
• M/s Bangalore Golf Club versus Assistant Commissioner of Commercial Taxes (Enforcement) delivered by the Hon’ble High Court of Karnataka

5. By relying on the aforesaid judgments, it is submitted that this Court is competent to entertain such writ petition. In the facts, since the show-cause is not sustainable, the final order should be set aside.

6. Siddiqui, learned Additional Government Pleader and Senior advocate appears on behalf of the State. He submits that the petitioners have an alternative remedy and as such on such ground the writ petition should not be entertained. All points that the petitioners seek to raise can be raised before the appellate authority. No interference is called for.

7. Having heard the learned advocates appearing for the respective parties and taking note that the scheme of the said Act, which, inter alia, provides for a remedy in the form of an appeal from the order passed under Section 74/73 of the said Act, I am of the view that ordinarily there is no scope to entertain the writ petition under Article 226 of the Constitution of India. Having regard to the efficacious alternative remedy available, the petitioners cannot be permitted to bypass the statutory remedy provided for. Although, the petitioners have relied on the judgment delivered by the Hon’ble High Court of Madras in the case of Titan Company Ltd (supra) to, inter alia, contend that the respondents cannot be permitted to bunch the show cause notices for consecutive tax period and on such ground the Hon’ble High Court of Madras had entertained the writ petition and had quashed the same, I find that the Hon’ble Court in the aforesaid judgment has not considered the issue of alternative remedy. The respondents also did not raise the issue of alternative remedy in such case.

8. Mr. Bag has also relied on a judgment of the Hon’ble High Court of Karnataka in the case of M/s Veremax Techonologie Services Limited (supra) in support of his contention. It appears that the Hon’ble High Court of Karnataka by placing reliance on the judgment of the Hon’ble High Court of Madras in the case of Titan Company Ltd (supra) and a judgment of the Hon’ble Supreme Court delivered in the case of State of Jammu and Kashmir and others vs. Caltex (India) Ltd. reported in AIR 1966 SC 1350 had proceeded to conclude that the show cause notice issued by the respondents are fundamentally flawed and the practice to issue a single consolidated show cause for multiple assessment years contravenes the provisions of the GST Act and established legal precedents.

9. As rightly pointed out by Mr. Siddiqui, learned Additional Government Pleader the aforesaid judgments have been delivered under Section 73 of the said Act. Be that as it may, taking into consideration the fact that the petitioners have an efficacious alternative remedy, all such issues which the petitioners seek to raise can be decided by the appellate authority, I am of the view that there is no scope to entertain the writ petition especially having regard to the fact that the petitioners at the first instance after the aforesaid show cause was issued, did not proceed to challenge the same. The belated attempt made by the petitioners to challenge the show cause along with the final order appear to be an attempt made by the petitioners to abruptly stall the multi-tiered adjudicatory process provided for in the scheme of the said Act. No exceptional case for interference has been made out. There is no explanation for the delay in filing the petition as well.

10. Having regard thereto, the writ petition fails and is accordingly dismissed without any order as to costs.

11. All parties shall act on the basis of the server copy of this order duly downloaded from this Court’s official website.