Joyous Blocks & Panels Private ... vs Assistant Commissioner
2022 Latest Caselaw 8562 Cal

Form No. J.(2)
Item No. 05
            IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
                     CIVIL APPELLATE JURISDICTION
                            APPELLATE SIDE

                         HEARD ON : 21.12.2022

                       DELIVERED ON : 21.12.2022

                                CORAM:

             THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM
                               AND
         THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYA

                        M.A.T. No. 1931 of 2022
                                 With
                         IA No.CAN 1 of 2022

              Joyous Blocks & Panels Private Limited & Anr.
                                  Vs.
      Assistant Commissioner, Commercial Taxes, Ballygunge Charge
                                 & Anr.

Appearance:-

Mr. Vinay Kr. Shraff
Ms. Priya Sarah Paul
Ms. Priyanka Sharma      ...........for the appellants

Mr. T.M. Siddique
Mr. Debasis Ghosh
Mr. N. Chatterjee
Mr. V. Kothari           ............ for the State

Mr. K.K. Maiti
Mr. Tapan Bhanja        ...............for the respondent no. 2


                              JUDGMENT

(Judgment of the Court was delivered by T.S. SIVAGNANAM, J.)

1. This intra-Court appeal filed by the writ petitioners is directed against the

order dated 1st December, 2022 passed in W.P.A. No. 26092 of 2022. In the said

writ petition the appellants had challenged a show cause notice issued by the

authority dated 26th September, 2022 with regard to classification of the product

manufactured by the appellants. The preliminary ground on which the show

cause notice was challenged is by contending that the authority has pre-decided

the issue and the show cause notice is pre-meditated and it is not a show cause

notice and consequently no useful purpose would be served in giving reply by the

appellants. The learned Single Bench was of the view that a writ against a show

cause notice is not maintainable. Challenging the said order the appellants have

preferred the instant appeal.

2. We have heard Mr. Vinay Kr. Shraff, learned counsel for the appellants, Mr.

T.M. Siddique, learned senior standing counsel for the State and Mr. Maiti,

learned advocate for the respondent no. 2.

3. The view taken by the learned single Bench that a writ petition against the

show cause notice is not maintainable is well settled. Equally well-settled is the

legal principle that there are exceptions to this self-imposed restriction by the

Constitutional courts. If a show cause notice suffers from the vice of lack of

jurisdiction, Courts are entitled to interfere with the same. If the show cause

notice is an order by itself and not a show cause notice and it is pre-meditated

then the Courts are entitled to interfere with the said order. In Siemens India

vs. State of Maharashtra reported at 2007 (207) ELT 168 (SC) a challenge was

made to a show cause notice and the Hon'ble Supreme Court held that although

ordinarily a writ Court may not exercise its discretionary jurisdiction in

entertaining a writ petition questioning a notice to show cause unless the same

inter alia appears to have been without jurisdiction. When a notice is issued with

premeditation a writ petition may not be maintainable, in such an event even if

the Court directs the statutory authority to hear the matter afresh, ordinarily

such hearing would not yield any fruitful purpose. In the instant case it is seen

that the show cause notice is elaborate and reason for such elaborate notice is on

account of the fact that at the first instance soon after the inspection of the

business premises of the appellants was completed by the authority, a query was

raised by the officer by proceedings dated 8 th July, 2022 calling upon the

appellants to state as to why HSN Code of Concrete Masonry Units-AAAC Blocks

will not fall under the broad heading 6810 with applicable tax rate 18%. as the

appellants are not making fly ash blocks/bricks as per the standard mentioned in

BIS Product Code. The appellants had submitted an elaborate reply for such a

query and the authority while issuing the show cause notice has dealt with the

reply under the heading "Rebuttal on the factual points" and proceeded to reject

all the contentions which were raised by the appellants and ultimately the

authority would state that he has no other option but to proceed to take action

under Section 74(1) of the WBGST Act /CGST Act, 2017 read with rule 142(1) of

WBGST/CGST Rules 2017 and the summary of the show cause notice will be

issued electronically in FORM GST DRC-01, specifying therein the amount of tax,

interest and penalty payable by the appellants.

4. On going through the proceedings of the assessing officer dated 26 th

September, 2022 it prima facie appears to be an order and the manner of issuing

show cause notice has not been rightly understood by the authority. Partly the

appellants have to be blamed because the appellants for the query raised by the

authority has misconstrued the scope of the query and proceeded to make

elaborate factual submissions as well as relied upon several decisions of the

Hon'ble Supreme Court and the High Courts. If the appellants had restricted

their reply only to the extent query raised, this problem could have been averted.

Thus, not only the authority committed a mistake in proceeding to reject all the

contentions and then issued the show cause notice, equally the appellants also

committed a mistake in mentioning facts which were not required to be done

pursuant the query raised by the authority.

5. Thus we are of the view that the entire proceedings have to be redone in an

opposite manner. We are conscious of the fact that if the matter is remanded

back it will be dealt with by the very same officer but, however, we are confident

that the very same officer will have an open mind and issue a show cause notice

in a proper manner giving adequate opportunity to the appellants to submit their

reply and it is thereafter the show cause notice has to be adjudicated. The

manner in which the authority has proceeded to issue the notice dated 26 th

September, 2022 does not satisfy the legal requirements.

6. For the above reasons the appeal is allowed application and the order

passed in the writ petition is set aside. Consequently the show cause notices

impugned in the writ petitions are quashed and the matter is remanded back to

the authority with a direction to issue a fresh show cause notice with an open

mind without pre-deciding any issue and give adequate opportunity to the

appellants to submit their reply and thereafter the case shall be adjudicated in

accordance with law.

7. We further direct that the adjudicating authority shall in no manner be

guided by its order dated 26 th September, 2022 though termed it a show cause

notice, which has been set aside by us in this order. A fresh show cause notice

shall be issued within a period of three weeks from the date of receipt of the

server copy of this order.

8. We make it clear that the appellants are precluded from raising the issue of

limitation when a fresh show cause is issued.

9. There shall be no order as to costs.

10. Urgent photostat certified copy of this order, if applied for, be furnished to

the parties expeditiously upon compliance of all legal formalities.

                                                     (T.S. SIVAGNANAM, J.)



 I agree,                                      (HIRANMAY BHATTACHARYYA, J.)



 RAJA/Pallab, AR(Ct.)