Madras High Court
M/S.Vaya Life (P) Ltd vs The Superintendent on 22 November, 2023
Author: Mohammed Shaffiq
Bench: Mohammed Shaffiq
W.P. No.13935 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 22.11.2023
CORAM
THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ
W.P. No.13935 of 2021 and
W.M.P. No.14805 of 2022
M/s.Vaya Life (P) Ltd.,
Represented by its Director Mrs.Radhika Vasanthakumar,
Aged 65 years,
No.129, Harrington Road,
Chennai - 600 030. .. Petitioner
Vs.
1. The Superintendent,
Circle-III, Group-IV,
Ministry of Finance / Department of Revenue,
GST and Central Excise Audit -I Commissionerate,
No.1775, Inner Ring Road,
Anna Nagar West Extension,
Chennai 600 101.
2. The Superintendent of GST & Central Excise,
Range - I, Purasawalkam Division,
Chennai North Commissionerate,
Newry Towers, No.2054, Ist Block,
IInd Avenue, 12th Main Road, Anna Nagar,
Chennai - 600 040. ..Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India,
praying to issue a Writ of Certiorari to call for the records of the Ist Respondent
viz., File No.C.No.V/15/GST/30/2021-Audit I-C3G4, culminating in the issue of
the Show Cause Notice No.78 of 2021 dated 01.04.2021 from File
No.C.No.V/15/GST/30/2021-Audit I-C3G4 and quash the same.
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1/6
W.P. No.13935 of 2021
For Petitioner : Ms.J.Ragini
for S.Murugappan
For Respondents : Mr.A.P.Srinivas
Senior Standing Counsel
ORDER
The writ petition is filed challenging the show cause notice No.78 of
2021 dated 01.04.2021.
2. The petitioner company is engaged in importing and trading of various
kitchen and household articles, scouring or polishing pads, gloves etc., and had
availed Input Tax Credit under Integrated Goods and Services Act, 2017
(hereinafter referred to as "IGST Act"), Central Goods and Services Act, 2017
(hereinafter referred to as "CGST Act") and Tamil Nadu State Goods and
Services Tax Act, 2017 (hereinafter referred to as "TNSGST Act"). There was an
audit conducted by the 1st respondent of the records of the petitioner company
for the period July 2017 to March 2019. Based on such audit, it was alleged
that the Input Tax Credit availed by the petitioner company as per their returns,
is not matching with the eligible Input Tax Credit as reflected in GSTR-2A
statements and is in excess in respect of CGST, IGST as well as SGST Credits.
3. It was stated that as per the details of the outward supplies furnished
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by the suppliers, excess credit has been taken by the petitioner company, and
such credit were not reversed by the petitioner company though there was
mismatch. The petitioner company submitted a letter dated 27.01.2021 in this
connection to the 1st respondent and stated that the suppliers have accounted
the purchasers under B2C instead of B2B resulting in mismatch, that the
petitioner company has paid the cost including the tax element and the tax
element has been already paid by their suppliers to the Government Authority.
4. Not convinced with the above response the impugned Show Cause
Notice No. 78/ 2021 dated 01.04.2021 came to be issued proposing to recover
ineligible credit in terms of Section 73(1) of CGST Act together with interest.
The above show cause notice is the subject matter of challenge in the present
writ petition inter alia on the following grounds:
a. That the petitioner company has made payment to the suppliers
including the tax components in all cases and based on such payments and tax
invoices raised by the suppliers, the petitioner company has rightly taken the
Input Tax Credit of the amounts paid. That there is no basis to contend that
such credits are ineligible credits merely for the reason that the returns filed by
the suppliers do not reflect these payments correctly.
b. It was submitted by placing reliance on the judgment of this Court in
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the case of Sri Ranganathar Valves Pvt. Ltd., v. Asstti. Commr. (CT),
Coimbatore reported in 2020 (42) G.S.T.L. 326 (Mad.,) that the rights of the
recipients to take credit have been upheld, when payments including tax have
been made to the suppliers of the goods.
5. At the outset, a preliminary objection was raised by Mr.A.P.Srinivas,
the learned counsel for the respondent that the writ petition is premature and
ought not to be entertained at the stage of show cause notice.
6. I find that there is merit in the submission of the learned counsel for
the respondent that it is trite law that the jurisdiction under Article 226 of the
Constitution of India ought not to be exercised in a routine fashion at the stage
of show cause notice. Though it is submitted that the issues raised are governed
by orders of this Court, however, it would require investigation of facts an
exercise which is alien to the jurisdiction under Article 226 of the Constitution
of India. Courts have frowned on Writ Petition filed against show cause notices.
The liability to pay taxes requires determination of disputed questions of fact
and should be agitated before Department authorities. (Kindy see Union of
India v Bajaj Tempo Ltd, (1998) 2 SCC 281)
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7. In view thereof, I am not inclined to entertain this Writ Petition against
the show cause notice. However, it is open to the petitioner to file their
objections within a period of 4 weeks from the date of receipt of a copy of this
order. It is always open to the petitioner to rely upon provisions or judgments
which may have a bearing. If any such objection is filed, the same shall be
considered and orders shall be passed after affording the petitioner an
opportunity in accordance with law. The writ petition stands disposed of
accordingly. No Costs. Consequently, connected miscellaneous petition is
closed.
22.11.2023
Speaking (or) Non Speaking Order
Index:Yes/No
Neutral Citation: Yes/No
Spp
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MOHAMMED SHAFFIQ, J.
Spp
To:
1. The Superintendent,
Circle-III, Group-IV,
Ministry of Finance / Department of Revenue,
GST and Central Excise Audit -I Commissionerate,
No.1775, Inner Ring Road,
Anna Nagar West Extension,Chennai 600 101.
2. The Superintendent of GST & Central Excise,
Range - I, Purasawalkam Division,
Chennai North Commissionerate,
Newry Towers, No.2054, Ist Block,
IInd Avenue, 12th Main Road, Anna Nagar,
Chennai - 600 040.
W.P. No.13935 of 2021 and
22.11.2023
https://www.mhc.tn.gov.in/judis
