M/S. Geeta Ganesh Promoters ... vs Union Of India & Ors
2023 Latest Caselaw 4962 Cal

Form No. J.(2)
Item No.1


                 IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
                          CIVIL APPELLATE JURISDICTION
                                 APPELLATE SIDE

                              HEARD ON: 11.08.2023

                            DELIVERED ON: 11.08.2023
                                  CORAM:
                    THE HON'BLE CHIEF JUSTICE T.S. SIVAGNANAM
                                    AND
             THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA
                                M.A.T. 1185 of 2023
                                         With
                               I.A. No. CAN 1 of 2023

                   M/s. Geeta Ganesh Promoters Private Limited
                                        Vs.
                               Union of India & Ors.

Appearance:-

Mr. J.K. Mittal
Mr. Pratyush Jhunjhnuwala
Mr. Rishi Raju
Mr. Mrigank Kejriwal
Ms. Divya Chatterjee                  .........for the appellant
Mr. Anirban Ray, Ld. GP
Mr. T.M. Siddique
Mr. S. Sanyal                         .........for the State

Mr. Vipul Kundalia
Mr. Tapan Bhanja                      .........for the Union of India



                                    JUDGMENT

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

1. This intra-Court appeal by the writ petitioner is directed against the order

dated 23rd June, 2023 in W.P.A. 13600 of 2023. In the said writ petition,

the appellant has prayed for issuance of a writ of declaration to declare rule

42(3) of the CGST Rules, 2017 as ultra vires the Constitution of India. The

appellant has also challenged the show cause notice dated 10 th May, 2023

issued by the 3rd respondent under section 73 of the WBGST Act. The

learned single Bench had entertained the writ petition sofar as the

challenge to the Constitutional validity of rule 42(3) of the CGST Rules,

2017. However, with regard to the challenge to the show cause notice, the

learned writ Court was not inclined to interfere or interdict the show cause

notice and directed the appellant to file an appeal. Aggrieved by such order,

the appellant has preferred the present appeal.

2. We have heard Mr. J.K. Mittal, learned counsel appearing for the appellant,

Mr. T.M. Siddique, learned Government counsel for the State and Mr. Vipul

Kundalia, learned standing counsel for the Union of India. The sheet-

anchor of the argument of the learned counsel appearing for the appellant

is that the show cause notice is devoid of any reason, it is not specific, it is

vague, it is not signed and does not contain the requisite details and it can

never be regarded as a valid show cause notice in the eye of law. In support

of his contention, the learned counsel placed reliance on the decision of the

Hon'ble Division Bench of the High Court at Delhi in Marg ERP Limited,

through its Auth. Representative Mr. Mahender Singh vs.

Commissioner of Delhi Goods and Service Tax, Delhi & Anr. reported in

2023 SCC OnLine Del. 714. For the same proposition, reliance was placed

on the decision of High Court of Allahabad in Apparent Marketing Pvt.

Ltd. vs. State of U.P. reported in 2022(59)G.S.T.L. 399 (All.) and the

decision of the Division Bench of this Court in Delta International

Limited vs. Commissioner of Customs reported in 2012 (281) E.L.T.

400 (Cal.).

3. Further, it is submitted that the input tax availed by the appellant till

completion certificate was issued for the building promoted by the

appellant is not required to be reversed and this aspect of the matter also

will render the impugned show cause notice as bad in law. In support of his

such contention reliance was placed on the decision of the High Court of

Gujarat in Principal Commissioner vs. Alembic Ltd. reported in 2019

(29) G.S.T.L. 625 (Guj.).

4. Further, it is submitted that the impugned show cause notice is also bad in

law on account of lack of pecuniary jurisdiction on the part of the authority

viz. the 3rd respondent, who issued the show cause notice and in this

regard reference has been made to the circular issued by the Central Board

of Excise and Customs in Circular No. 31/05/2018-GST dated 9 th

February, 2018.

5. We have heard Mr. T.M. Siddique, learned Government counsel on the

above submission. The show cause notice dated 10 th May, 2023 has been

issued under section 73 of the WBGST Act. In the said show cause notice,

the demand details have been mentioned and the name of the Deputy

Commissioner, who issued the show cause notice has also been furnished.

The show cause notice is in a statutory format, which has been forwarded

to the registered e-mail I.D of the appellant/assessee along with the

statutory form viz. GST DRC-01, which is the summary of the show cause

notice. Interestingly, along with the show cause notice, a report in the

matter of the appellant/assessee dated 8 th May, 2023 has been appended.

It is the submission of the learned advocate for the appellant that the show

cause notice is dated 10th May, 2023 but the report is dated 8th May, 2023

and therefore, the same cannot be treated as a show cause notice.

However, it is seen that much prior to issuance of the show cause notice

dated 10th May, 2023 the report dated 8th May, 2023 was forwarded to the

assessee along with form GST DRC-01A dated 20 th April, 2023. In the said

notice, the appellant was advised to pay the tax as ascertained along with

the amount of applicable interest in full by 5 th May, 2023, failing which,

show cause notice will be issued.

6. Further, the appellant was granted liberty to file its submission against the

ascertainment, which was done in the notice by 5 th May, 2023. Thereafter,

another notice was issued on 4th May, 2023. On the same date i.e. on 4 th

May, 2023 the assessee had submitted a representation to the Deputy

Commissioner of Revenue, Office of the Charge Officer, Park Street Charge,

Kolkata. In the said representation they have acknowledged the intimation

received under section 73(5) of the CGST Act, 2017. The assessee stated

that they do not agree with the allegations and the demand of tax along

with interest for the alleged inadmissible ITC. They further stated that they

shall submit their defence in case, the department will proceed to issue any

show cause notice as required under law. Thus, in terms of the requests

made by the assessee, show cause notice dated 10 th May, 2023 has been

issued along with the statutory form viz. GST DRC 01 dated 10 th May, 2023

in which the report has been appended.

7. On a perusal of the report, it is seen that it has been explicitly stated that

the appellant is required to show cause as to why it should not pay the

amount specified in the table in the said report along with the interest

payable and penalty leviable thereon. Therefore, the assessee should treat

the annexure to the notice i.e. the report dated 8 th May, 2023 as the

material based on which they are called upon to show cause as to why the

tax, which has been computed should not be recovered along with the

interest and penalty.

8. Thus, we are fully convinced that the show cause notice is neither vague

nor lacking in particular and it is for the appellant/assessee to raise all

contentions in its reply, which will include the contention regarding the

pecuniary jurisdiction and the authority, which has issued the show cause

notice.

9. In the decision in Marg ERP Ltd. (supra), the factual position was slightly

different, as could be noted from paragraph 8 of the judgment and

therefore, the Court came to the conclusion that the show cause notice

does not spell out the allegations, which are required to be addressed by

the petitioner therein. The case on hand is entirely different as we have set

out in the preceding paragraphs. Equally is the decision in the case of

Apparent Marketing Pvt. Ltd. (supra) and Delta International Ltd. (supra).

10. In any event, the issue as to whether a show cause notice is bad and lacks

detail or is unintelligible to qualify to be a show cause notice cannot be put

in a straight-jacket formula and has to be decided considering the facts and

circumstances of the cases on hand.

11. Therefore, we are fully convinced that the learned single Bench rightly

refused to interdict the show cause notice. Accordingly, the appeal fails and

the same is hereby dismissed along with the connected application. The

appellant is granted 15 days time from the date of receipt of server copy of

this judgment and order to submit its reply to the show cause notice in

which all contentions with regard to the facts as well as law can be raised

by the appellant and the authority concerned shall decide all issues, which

have been raised by the appellant in accordance with law and pass a

reasoned and speaking order.

12. No costs.

13. 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) CHIEF JUSTICE I agree.

(HIRANMAY BHATTACHARYYA, J.)

Apurba/Pallab AR(Ct.)