Madhya Pradesh High Court
Mount Everest Breweries Limited ... vs Union Of India on 4 December, 2023
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari, Pranay Verma
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 4 th OF DECEMBER, 2023
WRIT PETITION No. 11755 of 2023
BETWEEN:-
MOUNT EVEREST BREWERIES LIMITED CONTRACT
MANUFACTURING UNIT OF UNITED BREWERIES
LIMITED DIRECTOR MR. RAJAN TIBREWAL BPK STAR
TOWER, 4TH FLOOR, A.B. ROAD, INDORE (MADHYA
PRADESH)
.....PETITIONER
(SENIOR ADVOCATE SUNIL JAIN WITH SHRI SAMBHAV SOGANI,
ADVOCATE)
AND
1. UNION OF INDIA REVENUE SECRETARY
MINISTRY OF FINANCE NORTH BLOCK, NEW
DELHI (DELHI)
2. DIRECTORATE GENERAL OF GOODS AND
SERVICE TAX THROUGH ITS REGIONAL UNIT AT
GROUND FLOOR A WING, CGO COMPLEX, AB
ROAD, INDORE (MADHYA PRADESH)
.....RESPONDENTS
(SHRI PRASANNA PRASAD, ADVOCATE)
This petition coming on for admission this day, Justice Sushrut Arvind
Dharmadhikari passed the following:
ORDER
Heard on I.A. No. 5181/2023, which is an application for dismissal of
the petition filed on behalf of Respondent No. 2.
2. The present petition under Article 226 of the Constitution of India
assails the show cause notice dated 30.06.2022 passed in Case No.
IV(06)INV/RUI/47/2020-21/1503 by Respondent No. 2.
3. The brief facts of the case are that, the petitioner is engaged in the
business of manufacturing, brewing and selling alcoholic beverages, i.e., beer
under its own brand names and brands of United Breweries Ltd. For this
purpose the petitioner entered into a contract for manufacturing arrangement in
the capacity of a Contract Bottler/ Contract Bottling Unit. The petitioner inter
alia pays " brand fees" to UBL as consideration for the right to use its brand
names after retaining a fixed cost from the proceeds of selling beer under UBL's
brand names.
4. The learned counsel for the petitioner submits that the petitioner has
filed the present writ petition challenging the arbitrary and unreasonable action
of the Respondent No. 2 in issuing the impugned show cause notice dated
30.06.2022, wherein the petitioner's activities of manufacturing and selling beer
under United Breweries Ltd. (UBL) brand names are alleged to be job work
services, chargeable to 18% GST under Notification No. 11/2017- Central Tax
(Rate) dated 28.06.2017 read with relevant State Tax and Integrated Tax
Notifications. The petitioner has been called upon to show cause within a
period of 30 days. In fact, the petitioner submits that he is not chargeable to tax
since the amounts earned and retained by the Contractual Bottling Unit (CBUs)
are not liable to GST, however, GST is in fact is required to be paid by UBL as
it is providing services by way of granting representation rights/ right to use its
brand name. Therefore, the show cause notice itself a nullity and deserves to be
set aside.
5. Learned counsel for the petitioner further submitted that the show
cause notice has been issued with a premeditated mind. The Respondents have
already come to the conclusion that the petitioner is liable to pay the GST
therefore, in exception to the settled legal position this Court can very well
interfere with the show cause notice. In support of their contention they have
placed reliance on the judgment of the Apex Court in the case of Siemens Ltd.
v. State of Maharashtra reported in (2006) 12 SCC 33, wherein it is held
that "Ordinarily a writ Court may not exercise its discretionary jurisdiction in
entertaining a writ petition questioning a notice to show cause unless it is without
jurisdiction. However, when a notice is issued with premeditation, a writ petition
would be maintainable". Learned counsel further relied on the judgment of the
Calcutta High Court in the case of Joyous Blocks & Panels Private Limited
and Another vs. Assistant Commissioner, Commercial Taxes, Ballygunge
Charge and Another reported in 2022 SCC OnLine Cal 4306.
6. Per contra, learned counsel appearing for respondent No. 2
vehemently opposed the prayer and submitted that it is a settled legal position
that a writ petition against a show cause notice is not maintainable. The
petitioner is having efficacious remedy to contest the show cause notice before
the adjudicating authority.
7. Heard the learned counsel for the parties and perused the record.
8. Various grounds have been raised while challenging the show cause
notice, however, the fact remains that the Respondent No. 2 has only issued a
show cause notice and the petitioner has been asked to explain within 30 days
as to why GST cannot be imposed and recovered from the petitioner.
9. The Apex Court in the case of Hindustan Coca Cola Beverage
Private Ltd vs. Union of India and others reported in (2014) 15 SCC 44,
in which it is held that:- "when the statute provides for statutory appeal, the said
remedy is to be availed by the litigating parties". In Hameed Kunju vs. Nizam
(2017) 8 SCC 611, the Apex Court held that any petition under Article 227 of
Constitution of India should be dismissed in limine where there is statutory
provision of appeal. In another case Ansal Housing and Construction
Limited vs. State of Uttar Pradesh and others (2016) 13 SCC 305, it is
held that when there statutory appeal is provided, then the said remedy has to
be availed.
10. The Apex Court in the case of Malladi Drugs and Pharma Ltd. vs.
Union of India and Another reported in (2020) 12 SCC 808, has held that
"entertaining a writ petition by passing the statutory remedy against a show
cause notice and it is held that the High Court has rightly dismissed the writ
petition against a mere show cause notice and there is no reason to interfere
with the show cause notice".
11. In view of the aforesaid and also looking to the fact of availability of
an efficacious alternative statutory remedy, we do not find it proper to entertain
this petition.
12. Accordingly, I.A. No. 5181/2023 is allowed.
13. The petition is dismissed on the ground of efficacious alternative
statutory remedy. However, the petitioner would be at liberty to avail the
alternative remedy in accordance with law, if so advised.
Accordingly, the petition is dismissed. No order as to costs.
(S. A. DHARMADHIKARI) (PRANAY VERMA)
JUDGE JUDGE
Vatan
