HC declined to direct Show Cause Notice u/s 74 of CGST Act be issued electronically

High Court declined to direct GST authorities that show cause notice u/s 74 of CGST Act be issued electronically

In a recent judgment, the Hon’ble High Court has declined to direct the GST Authorities to issue a fresh show cause notice u/s 74 of CGST Act 2017 electronically on the ground that Show cause notice was issued by e-mail and not electronically.

ABCAUS Case Law Citation:
4210 (2024) (08) abcaus.in HC

In the first round of litigation, the Petitioner had challenged the show cause notice issued under Section 74(1) of the Act issued by the Superintendent (Anti-Evasion), CGST on the ground that that once a notice was issued to the Petitioner in his individual name, a separate notice could not have been issued in the name of the proprietorship concern by the Superintendent (Anti Evasion).

The Court opined that the argument was misconceived while the petitioner individually may be a resident of the area governed under the jurisdiction of a Commissionerate, proprietorship firm was situated at other place, where the jurisdiction of of het Commsissionerate would lie. It was held that as regard the earlier show cause notice issued to the individual, was concerned, the same would have no effect nor can it be said that the notice issued to the firm of the petitioner was without jurisdiction or that the other Commissionerate was not empowered to examine the actions of the firm. Accordingly, the earlier Petition was dismissed.

The Petitioner challenged the dismissal of the Petition before the Hon’ble Supreme Court by of Special Leave to Appeal. The Hon’ble Supreme Court while dismissing the same, observed that “since the High Court has reserved liberty to the petitioner to file replies to the Show Cause Notices, it is needless to observe that the petitioner is at liberty to take all available contentions in the replies to be filed to the Show Cause Notices.”

In the second round of litigation, the assessee again filed a Writ Petition and prayed for a direction to the GST Authorities to issue show cause notice u/s 74 of the CGST Act 2017 (the Act) electronically keeping in view the provisions contained under Rule 142(1)(a) of the CGST/HGST Rules, 2017 and that the Petitioner be allowed to file the reply electronically alone.

On the other hand, Standing Counsel for the revenue submitted that the revenue was not prevented from issuing the show cause notice under Section 74 of the CGST Act, by e-mail, and merely, because electronically show cause notice has not been issued, the same cannot be treated as invalid in any terms and the petitioner is not prevented from filing reply to the show cause notice through e-mail.

He further submitted that the petitioner was only trying to delay the proceedings in one pretext or the other seeks to get proceedings delayed of the show cause notice issued under Section 74(1) of the CGST Act, 2017. If the prayer of the petitioner was allowed, then the revenue will have to issue fresh notice through electronically mode and the time limitation would also set afresh.

The Hon’ble High Court stated that the provisions of law cannot be allowed to be twisted for the convenience of persons, who have been found to be prima facie utilizing the fraudulent ITCs.

The Hon’ble High Court also observed that if the present argument was to be taken, the same could have been examined by the Apex Court and even the Supreme Court had directed the petitioner to file his reply, which he had not chosen to do, and preferred, the present writ petition.

In view of above, the Hon’ble High Court held that filing of present writ petition was a gross abuse to the process of law. Accordingly, the Petition was dismissed by imposing costs of Rs.50,000/- upon the petitioner, to be deposited with the CGST Authorities.

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