High Court held that it should not exercise writ jurisdiction to decide factual questions at the stage of a show cause notice. Petitioner was directed to file departmental objections within 4 weeks for reconsideration.
Petition disposed of; petitioner directed to file objections within 4 weeks for reconsideration; no costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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.
..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.
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.
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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.
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 https://www.mhc.tn.gov.in/judis 3/6
W.P. No.13935 of 2021
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.
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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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
W.P. No.13935 of 2021
MOHAMMED SHAFFIQ, J.
Spp
To:
W.P. No.13935 of 2021 and W.M.P. No.14805 of 2022
22.11.2023
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2 issues framed by the court
Whether the High Court can exercise jurisdiction under Article 226 to decide a show cause notice at the stage of its issuance.
Whether the petitioner company's input tax credit claimed matches eligible credit reflected in GSTR-2A statements.
Colour shows how this judgement treated each authority
2 provisions across 2 enactments
M/s.Vaya Life (P) Ltd.
The Superintendent, Circle-III, Group-IV, Ministry of Finance / Department of Revenue, GST and Central Excise Audit -I Commissionerate, Chennai
The Superintendent of GST & Central Excise, Range - I, Purasawalkam Division, Chennai North Commissionerate
Mohammed Shaffiq
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
