M/S.Sunshakti Solar Power Projects ... vs The State Of Telangana
2025 Latest Caselaw 4846 Tel

Telangana High Court

M/S.Sunshakti Solar Power Projects ... vs The State Of Telangana on 16 April, 2025

THE HONOURABLE THE ACTING CHIEF JUSTICE SUJOY PAUL
                      AND
     THE HONOURABLE SMT. JUSTICE RENUKA YARA

             WRIT PETITION Nos.26395, 26403, 26406
                       and 26473 of 2023

COMMON ORDER:

(Per Hon'ble The Acting Chief Justice)

Regard being had to the similitude of the questions involved,

on the joint request, these matters are analogously heard and

decided by this common order.

2. In this batch of petitions, the subject matter of challenge is

revisional show-cause notices. The facts are taken from

W.P.No.26395 of 2023.

3. The petitioner is a dealer engaged in the business of setting

up of solar power generating systems to produce electricity

through variety of equipments like cables, electrical switch gears

etc., and certain items were imported.

4. The petitioner was served with a show-cause notice and in

turn, reply was filed. The assessment order dated 22.01.2020 was

passed levying tax on import turn over notified goods. Aggrieved,

the petitioner preferred an appeal before the Appellate Authority,

which was decided on 18.09.2020. The Appellate Authority after

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

relying on various circulars issued by the Government granted

relief to the petitioner by holding thus:

"For the facts and reasons discussed above, I feel it just and proper to remit the matter back to the Assessing Authority, who shall verity the claims of the appellant with reference to the material already available on record or that would be produced by the appellant and pass orders afresh in accordance with the Government Memo as discussed above, after giving the appellant a reasonable opportunity to present their case. With this direction, the impugned order is set- aside on the disputed turnover of Rs.179,57,52,408-00 so far it relates to the goods imported from the outside the country and the appeal thereon remanded."

(Emphasis Supplied)

5. It is the case of the petitioner that the impugned revisional

show-cause notice dated 31.08.2023 came as a blot from blue to

the petitioner, whereby based on the judgment of the Supreme

Court, the Revisional Authority intends to revise the order of the

Appellate Authority. Against the similar revisional orders these

batch of petitions are filed.

Contention of the petitioners:

6. Sri M. Govind Reddy, learned counsel for the petitioners

submits that order of assessing officer was based on the judgment

of the Supreme Court. Against which, the petitioners preferred

appeals. In the said appeals, not only the judgment of Supreme

Court was considered, but the learned Appellate Authority also

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

considered various binding executive instructions/circulars issued

by the State Government. After elaborate discussion and analysis,

the Appellate Authority rightly came to hold that imported goods

cannot be subjected to tax. It is submitted that under Section 32

of the Telangana Value Added Tax Act, 2005 ('VAT Act'), the

Revisional Authority is competent to revise, modify or set aside the

appellate order. The said exercise should not be done in a cryptic

manner. Since the Revisional Authority has relied on the very

same Supreme Court judgment which was considered by the

Appellate Authority, the petitioners cannot put forth any defence.

The petitioners cannot rely on the binding circulars of the State

Government on which reliance was placed by the Appellate

Authority. In other words, since proposed notices are founded

upon the judgment of Supreme Court, the petitioners are

defenceless and no useful purpose would be served in compelling

the petitioners to file reply to the said proposed revisional show-

cause notice.

7. Learned counsel for the petitioners by placing reliance on

the judgment of the Supreme Court in Malabar Industrial Co.

Ltd. v. Commissioner of Income Tax, Kerala State 1 submits

2000 (2) SCC 718

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

that show-cause notice does not spell out with accuracy and

precision as to how the order of the Appellate Authority is

prejudicial to the interest of the Revenue. For this reason also,

interference is warranted. Lastly, he placed reliance on the order

passed by Division Bench of this Court in M/s. Nice Enterprisers

v. The Deputy Commissioner 2 wherein interference was made

against the show-cause notice and liberty was reserved to the

Revenue to issue a fresh show-cause notice. For these cumulative

reasons, it is urged that this Court may interfere in the show-

cause notice itself.

Contentions of the respondents:

8. Per contra, Sri Swaroop Orilla, learned Special Government

Pleader for State Tax, submits that the scope of interference

against show-cause notice is very limited. Heavy reliance is

placed on the judgment of the Supreme Court in Special Director

v. Mohd. Ghulam Ghouse 3. For the same proposition, he placed

reliance on the order of Division Bench of this Court in GMR

Pochanpalli Expressways Limited v. Additional Director,

W.P.No.20080 of 2024, dated 30.07.2024.

(2004) 3 Supreme Court Cases 440

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

Directorate General of GST Intelligence, Hyderabad Zonal

Unit 4.

9. No other point is pressed.

10. We have heard the parties at length and perused the record.

Findings:

11. Before dealing with rival contentions, it is apposite to

consider the statutory provision i.e., Section 32(1) of VAT Act

reads thus:

"Section 32: Revision by Commissioner and other prescribed authorities:

(1) The Commissioner may suo motu call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to him, under the provisions of the Act including sub-section (2) and if such order or proceeding recorded is prejudicial to the interests of revenue, may make such enquiry, or cause such enquiry to be made and subject to the provisions of the Act, may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order in reference thereto as he thinks fit."

(Emphasis Supplied)

12. A plain reading of this provision makes it clear that the

Revisional Authority is competent to initiate proceedings to revise,

modify or set aside the order. Pertinently, the learned counsel for

W.P.No.16266 of 2023, dated 08.10.2024

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

the petitioners has not assailed the show-cause notices on the

ground of competence. The provision in no uncertain terms

makes it clear that the Revisional Authority is indeed competent to

take a different view from the view taken by the Appellate

Authority.

13. We find substance in the argument of learned Special

Government Pleader for State Tax that scope of interference at the

stage of show-cause notice is very limited. The Apex Court has

drawn curtains on this issue in the case of Mohd.Ghulam Ghouse

(supra) and opined thus:

"5. This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petitions questioning legality of the show-cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless, the High Court is satisfied that the show- cause notice was totally non est in the eye of law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine, and the writ petitioner should invariably be directed to respond to the show-cause notice and take all stands highlighted in the writ petition. Whether the show-cause notice was founded on any legal premises is a jurisdictional issue which can even be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the Court. Further, when the Court passes an interim order it should be careful to see that the statutory functionaries specially and specifically constituted for the purpose are not denuded of powers and authority to initially decide the matter and ensure that ultimate relief which may or may not be finally

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

granted in the writ petition is not accorded to the writ petitioner even at the threshold by the interim protection not granted."

(Emphasis Supplied)

14. The highlighted portion of this paragraph makes it clear that

even if legal premise of jurisdictional issue is lacking as per the

petitioners in the show-cause notices, they may file reply and raise

that objection. We are unable to persuade ourselves with the line

of argument of learned counsel for the petitioners that since

learned Revisional Authority has based its notice on the Supreme

Court judgment, they cannot have any defence while filing the

reply. If in the opinion of the petitioners, the said Supreme Court

judgment is either not applicable or distinguishable, the

petitioners can say so in their reply. The show-cause notice is

tentative in nature, which can be seen from the last paragraph of

the notice itself. Nothing prevents the petitioners to rely on the

circulars which were issued by the State Government, if such

circulars are in support of the petitioners' claim. In that event, it

will be the duty of the Revisional Authority to consider all the

objections taken by the petitioners in their reply.

15. The necessary ingredients on which interference can be

made at the stage of show-cause notice are absent in the present

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

cases. At the cost of repetition, the question of

competence/jurisdiction is not involved in the present matters.

Whether the appellate order discloses necessary ingredients to

show that it is prejudicial to the interest of Revenue or not can

also be raised while filing objection/response to the show-cause

notice. We say so, in view of the principles laid down by the

Supreme Court in Mohd.Ghulam Ghouse (supra).

16. So far the judgment of this Court in M/s. Nice Enterprisers

(supra) is concerned, suffice it to say that in the show-cause

notice in that case, there was no factual backdrop and no factual

details and the entire show-cause notice was issued by

reproducing Section 29(2) (e) of the Goods and Service Tax Act,

2017. In this peculiar backdrop, where necessary ingredients for

a valid show-cause notice were missing, this Court interfered with

the show-cause notice, set it aside and gave liberty to the Revenue

to issue a proper show-cause notice. The said judgment cannot

be stretched and pressed into service in the present cases, where

revisional notice is not sketchy or cryptic.

17. As analyzed above, the impugned show-cause notices cannot

be interfered with. Resultantly, interference is declined. The

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

petitioners may file their reply to the show-cause notices by taking

all possible grounds within three weeks from today. The

Competent Authority shall consider the reply and decide the

matters, in accordance with law, expeditiously.

18. With the aforesaid and without expressing any opinion on

the merits, the Writ Petitions are disposed of. No order as to

costs.

Miscellaneous petitions pending, if any, shall stand closed.

_________________________ SUJOY PAUL, ACJ

__________________________ RENUKA YARA, J

Date : 16.04.2025 GVR/NVL

HACJ (SP,J) & RY,J W.P.Nos.26395_2023_&_batch

THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL

AND

THE HON'BLE SMT JUSTICE RENUKA YARA

WRIT PETITION Nos.26395, 26403, 26406 and 26473 of 2023 (Per the Hon'ble the Acting Chief Justice Sujoy Paul)

16.04.2025 GVR/NVL