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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.15498 OF 2024
WRIT PETITION NO.15498 OF 2024
Apollo Tyres Limited, Apollo Tyres Limited, 7, Institutional Area, 7, Institutional Area, Sector 32, Gurgaon – 122 001, Sector 32, Gurgaon – 122 001, Haryana, through its constitute
Haryana, through its constitute attorney Mr. Rajiv Vijay Gupta attorney Mr. Rajiv Vijay Gupta ... ...Petitioner
Petitioner
JUDGMENT
1. Union of India Union of India through the Secretary, through the Secretary, Ministry of Finance, North Block, Ministry of Finance, North Block, New Delhi – 110 001 New Delhi – 110 001
2.
2. The Additional Director, The Additional Director, Directorate General of GST Intelligence Directorate General of GST Intelligence Delhi Zonal Unit, MTNL Sanchar Hut, Delhi Zonal Unit, MTNL Sanchar Hut, Near Manipla Hospital, Sector 6 Near Manipla Hospital, Sector 6 Dwarka Dwarka,, New Delhi – 110 075 New Delhi – 110 075
3.
3. The Additional / Joint Commissioner The Additional / Joint Commissioner Central Goods and Service Tax, Thane, Central Goods and Service Tax, Thane, Nehru Nagar, Wagle Industrial Estate, Nehru Nagar, Wagle Industrial Estate, Thane, Maharashtra Thane, Maharashtra......Respondents Respondents Mr. Joseph Kodianthara, Senior Advocate (through VC) a/w Mr. Anil Mr. Joseph Kodianthara, Senior Advocate (through VC) a/w Mr. Anil D’Souza for Petitioner. D’Souza for Petitioner. Mr. Ram Ochani a/w Ms. Sangeeta Yadav for Respondent No.1. Mr. Ram Ochani a/w Ms. Sangeeta Yadav for Respondent No.1. Mr. Ram Ochani a/w Ms. Kavita Shukla for Respondent Nos.[2] and 3. Mr. Ram Ochani a/w Ms. Kavita Shukla for Respondent Nos.[2] and 3. CORAM: M. S. Sonak & Jitendra Jain, JJ.
1. By this petition under Article 226 of the Constitution of India, By this petition under Article 226 of the Constitution of India, the petitioner has challenged the show cause notice dated 2 August the petitioner has challenged the show cause notice dated 2 August 2024 issued by respondent no.2 to the petitioner to centralise and show 2024 issued by respondent no.2 to the petitioner to centralise and show cause before respondent no.3 why CGST, SGST and IGST should not be cause before respondent no.3 why CGST, SGST and IGST should not be demanded and recovered under Section 74 of the Central Goods and demanded and recovered under Section 74 of the Central Goods and Services Tax Act (CGST), State Goods and Services Tax Act (SGST) and Services Tax Act (CGST), State Goods and Services Tax Act (SGST) and Integrated Goods and Services Tax Act (IGST). The said show cause Integrated Goods and Services Tax Act (IGST). The said show cause notice further directs the petitioner to show cause why interest under notice further directs the petitioner to show cause why interest under Section 50 of the CGST Act and the SGST Act should not be demanded Section 50 of the CGST Act and the SGST Act should not be demanded and recovered in addition to the penalty under Section 74 of the CGST and recovered in addition to the penalty under Section 74 of the CGST Act, SGST Act and Section 20 of the IGST Act. By this show cause Act, SGST Act and Section 20 of the IGST Act. By this show cause notice, the issue pending before various State authorities, namely notice, the issue pending before various State authorities, namely Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Haryana, Uttar Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Haryana, Uttar Pradesh etc. has been centralised and referred to respondent no.3 for Pradesh etc. has been centralised and referred to respondent no.3 for adjudication. adjudication.
2. Mr. Ochani, learned counsel for the respondents, raised a Mr. Ochani, learned counsel for the respondents, raised a preliminary objection to the entertainability of the present petition at preliminary objection to the entertainability of the present petition at the stage of the show cause notice. He contends that this Court should the stage of the show cause notice. He contends that this Court should not stop the adjudication of the show cause notice and the petitioner not stop the adjudication of the show cause notice and the petitioner should be called upon to reply to the show cause notice and raise all the should be called upon to reply to the show cause notice and raise all the contentions, including the contention of limitation before respondent contentions, including the contention of limitation before respondent no.3. It is his submission that the petitioner can convince respondent no.3. It is his submission that the petitioner can convince respondent no.3 and if respondent no.3 is satisfied with the submissions of the no.3 and if respondent no.3 is satisfied with the submissions of the petitioner, then the show cause notice would be dropped and if he is not petitioner, then the show cause notice would be dropped and if he is not satisfied then appropriate order would be passed which can be satisfied then appropriate order would be passed which can be challenged in appeal. Mr. Ochani strongly submitted that, at this stage, challenged in appeal. Mr. Ochani strongly submitted that, at this stage, the petitioner should not be permitted to approach this Court in Writ the petitioner should not be permitted to approach this Court in Writ Petition. Petition.
3. Mr. Joseph Mr. Joseph Kodianthara, learned senior counsel appearing Kodianthara, learned senior counsel appearing through Video Conferencing, submitted that the show cause notice is through Video Conferencing, submitted that the show cause notice is issued beyond the period of one year and, therefore, the same is barred issued beyond the period of one year and, therefore, the same is barred by limitation. It is his submission that the show cause notice has been by limitation. It is his submission that the show cause notice has been issued to give retrospective effect to Circular No.212/6/2024 dated 26 issued to give retrospective effect to Circular No.212/6/2024 dated 26 June 2024 and, therefore, this Court should entertain at the stage of June 2024 and, therefore, this Court should entertain at the stage of the show cause notice itself since conditions specified in the Circular the show cause notice itself since conditions specified in the Circular cannot be complied with. cannot be complied with. The learned senior counsel also relied upon The learned senior counsel also relied upon the decision of the Delhi High Court in the case of the decision of the Delhi High Court in the case of M/s. JSW Steel M/s. JSW Steel Limited Vs. Directorate General of GST Intelligence & Ors. Limited Vs. Directorate General of GST Intelligence & Ors.[1] in support of in support of his submission. his submission.
4. We have heard the learned senior counsel for the petitioner and We have heard the learned senior counsel for the petitioner and the learned counsel for the respondents. the learned counsel for the respondents.
5. The show cause notice is issued for the determination of the value The show cause notice is issued for the determination of the value of the supply as per Section 15(3)(b) of the CGST Act, 2017, which of the supply as per Section 15(3)(b) of the CGST Act, 2017, which provides that the value of the supply shall not include any discount provides that the value of the supply shall not include any discount given after the supply has been effected subject to fulfilment of given after the supply has been effected subject to fulfilment of conditions specified therein. At the outset, we wish to state that the conditions specified therein. At the outset, we wish to state that the show cause notice is issued after the investigation was initiated into the show cause notice is issued after the investigation was initiated into the petitioner's transactions based on intelligence. During the course of the petitioner's transactions based on intelligence. During the course of the investigation, statements of various officers of the petitioner were investigation, statements of various officers of the petitioner were recorded, which have been relied upon in the show cause notice on the recorded, which have been relied upon in the show cause notice on the issue of various discounts given to the dealers and their treatments issue of various discounts given to the dealers and their treatments under the GST Act. In the show cause notice, the respondents have under the GST Act. In the show cause notice, the respondents have relied upon the findings of the investigations which in turn is based on relied upon the findings of the investigations which in turn is based on
1 Writ Petition (C) NO.13769 of 2024 Writ Petition (C) NO.13769 of 2024 dated 1 dated 1st st October 2024 October 2024 various documentary evidence including the statements recorded in the various documentary evidence including the statements recorded in the course of investigations. course of investigations.
6. In the show cause notice, a specific allegation is made on In the show cause notice, a specific allegation is made on suppressing facts and misstatement regarding non-furnishing details of suppressing facts and misstatement regarding non-furnishing details of outward supplies under Section 37 of the CGST Act. There is also an outward supplies under Section 37 of the CGST Act. There is also an allegation that the facts have been suppressed with the intention to allegation that the facts have been suppressed with the intention to evade the payment of GST. It is further stated in the show cause notice evade the payment of GST. It is further stated in the show cause notice that if the investigation had not been conducted, evasion of GST would that if the investigation had not been conducted, evasion of GST would not have come to light. The respondents in the show cause notice have not have come to light. The respondents in the show cause notice have invoked the extended period of limitation based on the allegations of invoked the extended period of limitation based on the allegations of suppression of facts and misstatement with an intention to evade the suppression of facts and misstatement with an intention to evade the payment of GST from July 2017 to March 2022. The show cause payment of GST from July 2017 to March 2022. The show cause notice also deals with the onus of proof and its extent of compliance for notice also deals with the onus of proof and its extent of compliance for the purpose of Section 15(3)(b) of the CGST Act. the purpose of Section 15(3)(b) of the CGST Act.
7. In our view, the issue of whether there is a suppression of facts or In our view, the issue of whether there is a suppression of facts or misstatement to invoke an extended period of limitation would require misstatement to invoke an extended period of limitation would require a determination on the factual matter which this Court, in its a determination on the factual matter which this Court, in its extraordinary jurisdiction under Article 226 of the Constitution of India, extraordinary jurisdiction under Article 226 of the Constitution of India, certainly cannot enter into. The issue of shifting of onus also involves certainly cannot enter into. The issue of shifting of onus also involves adjudication on facts. Furthermore, compliance with conditions of adjudication on facts. Furthermore, compliance with conditions of Section 15(3)(b) would also include inviting this Court to enter the Section 15(3)(b) would also include inviting this Court to enter the arena of facts which we are afraid we cannot examine. In the show arena of facts which we are afraid we cannot examine. In the show cause notice, we could not find any reference to Circular cause notice, we could not find any reference to Circular No.212/6/2024 dated 26 June 2024, based on which the petitioner has No.212/6/2024 dated 26 June 2024, based on which the petitioner has submitted that the impugned show cause notice is issued. Therefore, the submitted that the impugned show cause notice is issued. Therefore, the contention of the petitioner that the show cause notice has been issued contention of the petitioner that the show cause notice has been issued only on the ground of retrospective application of the Circular is also illonly on the ground of retrospective application of the Circular is also illfounded. There is no challenge to the said circular in the prayer clause founded. There is no challenge to the said circular in the prayer clause of the petition. of the petition.
8. Mr. Ochani, learned counsel for the respondents, is justified in Mr. Ochani, learned counsel for the respondents, is justified in submitting that if the petitioner is called upon to reply to the show submitting that if the petitioner is called upon to reply to the show cause notice, the adjudicating officer would certainly look into it cause notice, the adjudicating officer would certainly look into it objectively and, if convinced with the submission, may drop the show objectively and, if convinced with the submission, may drop the show cause notice. However, to restrain the respondents from adjudication of cause notice. However, to restrain the respondents from adjudication of the show cause notice certainly is incorrect and correctly objected to, the show cause notice certainly is incorrect and correctly objected to, and we believe that the submission made by the respondents is justified and we believe that the submission made by the respondents is justified on the facts of the present case. In the petition also, there is no on the facts of the present case. In the petition also, there is no averment except bald statement that the petitioner has no alternative averment except bald statement that the petitioner has no alternative and efficacious remedy. As we observed above, the petitioner has an and efficacious remedy. As we observed above, the petitioner has an alternate and efficacious remedy. alternate and efficacious remedy.
9. In In Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others and others[2], the Hon’ble Supreme Court explained that Writ Petitions, the Hon’ble Supreme Court explained that Writ Petitions may be entertained against show cause notices where the petitioners may be entertained against show cause notices where the petitioners seek enforcement of any fundamental rights, where there is a violation seek enforcement of any fundamental rights, where there is a violation of principles of natural justice or where the order or proceedings are of principles of natural justice or where the order or proceedings are wholly without jurisdiction or where the vires of the Act is itself wholly without jurisdiction or where the vires of the Act is itself challenged. None of these circumstances are made out in the present. challenged. None of these circumstances are made out in the present. Simply alleging that the impugned show cause notices are without Simply alleging that the impugned show cause notices are without jurisdiction is insufficient. The usual adjudicatory process, where such a jurisdiction is insufficient. The usual adjudicatory process, where such a mattwhirlpooler can be effectively adjudicated upon, cannot be scuttled mattwhirlpooler can be effectively adjudicated upon, cannot be scuttled by rushing to the writ court and securing stays on the adjudicatory by rushing to the writ court and securing stays on the adjudicatory process. process.
10. In In Special Director and Another Vs. Mohd. Ghulam Ghouse and Special Director and Another Vs. Mohd. Ghulam Ghouse and another another[3], the Hon’ble Supreme Court has held that unless the High, the Hon’ble Supreme Court has held that unless the High Court is satisfied that the show-cause notice was totally non-est in the Court is satisfied that the show-cause notice was totally non-est in the eyes of the law for absolute want of jurisdiction of the authority even to eyes of the law for absolute want of jurisdiction of the authority even to investigate the facts, writ petitions should not be entertained for mere investigate the facts, writ petitions should not be entertained for mere asking and as a matter of routine. The writ petitioner should invariably asking and as a matter of routine. The writ petitioner should invariably be directed to respond to the show cause notice and raise all defences be directed to respond to the show cause notice and raise all defences and contentions highlighted in the writ petition. Whether the show and contentions highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue cause notice was founded on any legal premises is a jurisdictional issue the recipient can urge before the authority issuing the notice. Such the recipient can urge before the authority issuing the notice. Such issues can also be adjudicated by the authority initially issuing the issues can also be adjudicated by the authority initially issuing the notice before the aggrieved party could approach the Court. notice before the aggrieved party could approach the Court.
11. In In Thansingh Nathmal V/s. Superintendent of Taxes, Dhubri and Thansingh Nathmal V/s. Superintendent of Taxes, Dhubri and Others Others[4], the Constitution Bench of the Hon’ble Supreme Court,, the Constitution Bench of the Hon’ble Supreme Court, disapproved the petitioner’s invoking the jurisdiction of the High Court disapproved the petitioner’s invoking the jurisdiction of the High Court under Article 226, bypassing alternate statutory remedies that were under Article 226, bypassing alternate statutory remedies that were clearly available. The Constitution Bench observed that the jurisdiction clearly available. The Constitution Bench observed that the jurisdiction of the High Court under Article 226 of the Constitution is couched in of the High Court under Article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the except the territorial restrictions which are expressly provided in the Article. But the exercise of the jurisdiction is discretionary; it is not Article. But the exercise of the jurisdiction is discretionary; it is not exercised merely because it is lawful to do so. The very amplitude of the exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to jurisdiction demands that it will ordinarily be exercised subject to certain self-imposed limitations. certain self-imposed limitations.
12. The Constitution Bench held that resorting to this jurisdiction is The Constitution Bench held that resorting to this jurisdiction is not intended as an alternative remedy for relief, which may be obtained not intended as an alternative remedy for relief, which may be obtained in a suit or other mode prescribed by statute. Ordinarily, the Court will in a suit or other mode prescribed by statute. Ordinarily, the Court will not entertain a petition for a writ under Art. 226, where the petitioner not entertain a petition for a writ under Art. 226, where the petitioner has an alternative remedy that provides an equally efficacious remedy has an alternative remedy that provides an equally efficacious remedy without being unduly onerous. Again, the High Court does not generally without being unduly onerous. Again, the High Court does not generally enter upon a determination of questions which demand an elaborate enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not, therefore, act as a court of appeal is claimed. The High Court does not, therefore, act as a court of appeal against the decision of a court or tribunal to correct errors of fact and against the decision of a court or tribunal to correct errors of fact and does not, by assuming jurisdiction under Article 226, trench upon an does not, by assuming jurisdiction under Article 226, trench upon an alternative remedy provided by statute for obtaining relief. Where it is alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit, by entertaining a a statute, the High Court normally will not permit, by entertaining a petition under Article 226 of the Constitution, the machinery created petition under Article 226 of the Constitution, the machinery created under the stature to be bypassed, and will leave the party applying to it under the stature to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up. to seek resort to the machinery so set up.
13. The learned counsel for the petitioner relied upon the decision in The learned counsel for the petitioner relied upon the decision in the Delhi High Court in the case of JSW Limited (supra). In our view, it the Delhi High Court in the case of JSW Limited (supra). In our view, it is an interim order, and in any case, the respondents were permitted to is an interim order, and in any case, the respondents were permitted to continue with the proceedings to adjudicate the show cause notice. The continue with the proceedings to adjudicate the show cause notice. The allegation of suppressing facts and misstatement was not the subject allegation of suppressing facts and misstatement was not the subject matter before the Delhi High Court, which is the case in the present matter before the Delhi High Court, which is the case in the present petition. In any case, the Delhi High Court is an interim order that petition. In any case, the Delhi High Court is an interim order that cannot be a binding precedent for this Court. cannot be a binding precedent for this Court.
14. In view of the above, the petition to challenge the show cause In view of the above, the petition to challenge the show cause notice dated 2 August 2024 is dismissed. However, the petitioner is notice dated 2 August 2024 is dismissed. However, the petitioner is granted time up to 15 December 2024 to file its reply to the show cause granted time up to 15 December 2024 to file its reply to the show cause notice. Respondent no.3 to give a personal hearing to the petitioner notice. Respondent no.3 to give a personal hearing to the petitioner and, after considering the petitioner's submissions, pass a reasoned and and, after considering the petitioner's submissions, pass a reasoned and speaking order on or before 31 January 2025. speaking order on or before 31 January 2025.
15. We make it clear that we have not expressed any opinion on the We make it clear that we have not expressed any opinion on the merits of the case since we have not heard the parties on the same. All merits of the case since we have not heard the parties on the same. All parties' contentions are kept open to be adjudicated in the adjudication parties' contentions are kept open to be adjudicated in the adjudication process. process.
16. This petition is dismissed with liberty in the above terms. No This petition is dismissed with liberty in the above terms. No costs. costs. (Jitendra S. Jain, J.) (M. S. Sonak, J.)