M/s.Suraj Kiran Renewable Resources Private Limited Vs The State of Telangana

M/s.Sunshakti Solar^{Power Projects PrivateLimited} ,^{H.No -1-21-227-5} ', .1st Fiooi-plot No.54, Road^{No.g;Sri Venkateshwara-NagarColony'.west} Vent<ataouram. Secunderabad^{- 5OO 010.State of Telangana'Rep'by its} Authorisbd Signatory^{Mr.Venkata Raja Bapatla}

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...PETITIONER

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AND

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The State of Telanqana,^{Rep. by its principal SecretaryRevenue} (CT)Department Telangana Secretariat^Hyderabad

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The Additional commissioner,^{Revenue(cT) Department, commissioner} Telangana, HYderabad.

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The Appellate Joint^{Commissioner, (ST), Hyderabad RuralDivision'} Hyderaba.

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The Assistant commissioner^{of state Tax, Malkajgiricircle-ll, Hyderabad.}

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...RESPONDENTS

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Petition under Article^{226 of lhe constitutionof lndia praying that in the} circumstances stated in^{the affidavitfiled therewith,the High courtmaybe} pleased to issuq a writ of Mandamus^{or any other appropriate writ or order or} Direction declaring the^{action of the respondents in excersing the revisional} jurisdiction by serving revision Show^{cause notice throughproceedingsccTs} Ref No Llll(2)t11}-4t2021^{Dated 31-8-2023 as arbitrary, contraryto law,} unconstitutional coupled^{with ulterior motive.}

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lA NO: 1 OF 2023

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Petition under Section 151 CPC praying that in the circumr;tances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the proceedings CCTs Ref No Llll(2)/1 10-412021 Dated 31-8.2023 labelled as revision show cause notice forthwith pending dispo.sal of the Wr t Petition.

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Counsel for the Petitioner: SRI M.GOVIND REDDY, REP. FOR SRIM.P.K.ADITYA

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Counsel for the Respondents: SRI SWAROOP OORILLA, SPL. GP FOR STATE TAX

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WRIT PETITION NO: 26403OF 2023

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Between:

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M/s.Suraj Kiran Renewable Resources Private Limited , H.No.'-21-227-5, Ist Floor, Plot No.54, Road No.9, Sri Venkateshwara Nagar Colony, West Venkatapuram, Secunderabad - 500 010. State of Telangana Re[. by its Authorised Signatory Mr.Venkata Raja Bapatla

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AND

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1 Tie. _State of Telangana, Rep. by its principat Secretary Revenue (CT)Department Telangana Secretariat Hyderabad.

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The Additional Commissioner, Revenue (CT) Department, Commissioner Telangana, Hyderabad.

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The Appellate .loint Commissioner (ST), Hyderabad Rrlral Division, Hyderabad.

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The Assistant Commissioner of State Tax, Malkajgiri Circte-ll, Hvderabad.

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...RESPONDENTS

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Petition under Article 226 ol the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue- a Writ of Mandamus or any other appropriate Wr.t or Order or Direction declaring the action of the respondents in excersing the revisional jurisdiction by serving revision show cause notice through proceedings ccrs Ref No Llll(2)1110-212021 Dated 31-8-2023 as arbitrary, contrary to law, unco nstitutional coupled with ulterior motive.

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lA NO: 1 OF 2023

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in suppo( of the^petition, the High Court ma'y be^pleased to stay the proceedings CCTs Ref No Llll(2)/1 10-212O2'l Dated 31-8-2023 labelled as revision show cause notice forthwith^pending disposal of the Writ Petition.

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Counsel for the Petitioner: SRI M.GOVIND REDDY, REP. FOR SRI M.P.K.ADITYA

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Counsel for the Respondents: SRI SWAROOP OORILLA, SPL. GP FOR STATE TAX

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WRIT PETITION NO: 26406 OF 2023

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Between:

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M/s.Suraj Kiran Solar Technologies Private Limited, Plot No.54, Road No.9, Sri Venkateshwara Nagar Colony, West Venkatapuram, Secunderabad - 500 010. State of Telangana Rep. by its Authorised Signatory Mr.Venkata Raja Bapatla

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...PETITIONER

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AND

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The State of Telangana, Rep. by its^principal Secretary Revenue^(CT) Department Telangana Secretariat Hyderabad.

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The Additional Commissioner,. Revenue^(CT) Department, Commissioner Telangana, Hyderabad.

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The Appellate Joint Commissioner^(ST), Hyderabad Rural Division,^Hyderaba.

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The Assistant Commissioner of State Tax, Malkajgiri Circle-lll, Hyderabad.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia^praying that^{in the} circumstances stated in the affidavit filed^therewith, the^{High Court may be} pleased to issue a Writ of Mandamus or any other appropriate Writ or Order or Direction declaring the action of the respondents in excersing the^revisional jurisdiction by serving revision Show cause notice through proceedings CCTs Ref No Llll(2)1110-112021 Dated 31-8-2023 as arbitrary, contrary to^law, unconstitutional coupled with ulterior motive.

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lA NO: 1 OF 2023

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Petition under Section 151 CPC^praying that in the^{circumr;tances stated} in the affidavit filed in support of the^petition, the High Court^{may be pleased to} stay the proceedings CCTs Ref No Llll(2)/1 10-112021 Dated^{31-8-2023labelled} as revision show cause notice forthwith^pending disposal^{of the Writ Petition.}

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Counsel for the Petitioner: SRI M.GOVIND REDDY,^{REP. FOR} SRI M.P.K.ADITYA

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Counsel for the Respondents: SRI SWAROOP OORILLA, SPL. GP FOR STATE TAX

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WRIT PETITION NO: 26473OF 2023

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Between:

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M/s.Dinakar Technologies Private Limited, H.No.1-21-227-5,^'1st Floor, Plot No.54, Road No.9, Sri Venkateshwara Nagar Colony, West '/enkatapuram, Secunderabad - 500 010. State of Telangana Rep. by^its Authorisgd Signatory Mr.Venkata Raja Bapatla

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.PETITIONER

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AND

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The State Of Telangana, Rep. by its^principal Secretary Revenue (CT)Department Telangana Secretariat Hyderabad.

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The Additional Commissioner, Revenue (CT) Department, Commissioner Telangana, Hyderabad.

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The Appellate Joint Commissioner (ST), Hyderabad Rural Division, Hyderabad.

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The Assistant Commissioner of State Tax, Malkajgiri Circle-ll, Hyderabad.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High^t.)ourt may be pleased to issue a Wril of Mandamus or any other appropriate W'it or Order or Direction declaring the action of the respondents in excersing the revisional jurisdiction by serving revision Show cause notice through proceedings CCTs Ref No Llll(2)1110-312021 Dated 31-8-2023 as arbitrary, contrary to law, unconstitutional coupled with ulterior mo.tive.

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lA NO: 1 OF 2023

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Petition under section 151^{CPC praying that in the circumstancesstated} in the affidavit filed^{in support of the petition, the High courtmay be pleased to} stay the^proceedings ccTs^{Ref No Llll(2)/1 10-312021Dated 31-8-2023labelled} as revision show cause^{notice forthwith pendingdisposal of the writ Petition.}

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Counsel for the Petitioner:^{SRI M.GOVINDREDDY'REP. FOR} SRI M.P.K.ADITYA

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Counsel for the Respondentsi^{SRI SWAROOPOORILLA'} SPL. GP FOR STATE^TAX

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The Court made the following:^{COMMON ORDER}

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(;\

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THE HONOURABLE^{THE ACTING CHIEF JUSTICESUJOY PAUL} AND THE HONOURABLE^{SMT. JUSTICE RENUKA YARA}

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WRIT PETITION Nos.26395,^26403,26406 and26473 of 2ol23

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COMMON ORDER:^{(Per Hon'ble The Acting Chief Justice)}

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Regard being, had to the similitude^{of the questionr; involved,} on the^joint reqtrest,^{these matters are alalogousiy heard and} decided by this^{cotnmon order.}

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In this batch of^{petitions, the subject matter of challengeis} revisional show-cause notices.^{The facts aretal:enfrom} W.P.No.26395 of^2023.

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The petitioner is a^{dealerengaged in the business; of setting} up of solar^{porver generating systems to produceeiectricity} through variety^c,{ equipments^{like cables,electrical sv'itch gears} etc., ald certain items^{were imported.}

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The petitioner was served^with a^{show-causenotice and in} turn, reply was filed.^{The assessmentorderdated 22.Oi .2O2O was} passed levying tax on import turn over notified goods.^Aggrieved, the petitioner prel'erred al appeal before the Appellate Authority, which was decidt:r-L on 18.09.2020. The Appellate Authority^after

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HACJ (SP,J) & RY,J W.P.Nos.26395 2023 & batch

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relying on various circulars issued by the Government grarlted

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relief to the petitioner by holding thus:

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'For the facts and reasons discussed above, I feel it^{just and} proper to remit the matter back to the Assessing Authority, - who shall verit5r the claims of the appellant with reference to the material already available on record or that would be produced by the appeilant 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 setaside on the disouted turnover of Rs. 179,57, 52.4O8-0O^{so far} it relates to the soods imported from the outside the country and the appe al thereon remanded."

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(Emphasis Supplied)

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It is the case of the petitioner that the impugned^revisional show-cause notice dated 37.08.2023 carne 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 frled

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Contention of the^petitioners:

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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 judgmentof Supreme} Court was considered, but the learned^{Appellate Authorityalso} \ --. \

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H ACi⁽ SP,J) & RY,J W.P.Nos.26195 .1023_& batch

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considered various binding executive^{instructions/circul;rrsissued} by the State Goverrtment.^{After elaborate discussionand analysis,} the Appellate Authority rightly^{came to hold that imported goods} cannot be subjected to tax. It is submitted^{that uno.erS:iection32} of the Telangana Value Added Tax Act,^{2OO5 (1/AT Act'), the} Revisional Authontv is competent to^{revise, modify or set aside the} appellate order. The said exercise should not be^{done ir a cryptic} manner. Since the Revisional Authority has^relie<l or^{the very} same Supreme^{(lourt judgment} which was^{considere,dby the} Appellate Authorilr,, the petitioners cannot^put forth^{an-z defence.} The petitioners catrnot rely on the binding circular:; of the^State Government on v,'hich relialce was placed by^{':he Appellate} Authority. In other words, since proposed^{notices, arr.: founded} upon the^judgm cnt of Supreme Court, the^{petitir:,nersare} defenceless ancl nc, useful purpose would be served in^c,ompelling the petitioners to lile reply to the said^{proposedrevisiorea-l show-} cause notice.

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Learned cotursel for the petitioners by placing rcliance on the judgment of the Supreme Court in Malabar Industrial Co. Ltd. v. Commissioner of Income Tax, Kerala Stater submits

'^{2ooo(2) scc7 l8}

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I]ACJ (SP,J) & RY,J W.P.Nos.26i95 2021 & barch

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that show-camse 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 Commissioner2 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 showcause notice itself.

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Contentions of the respondents:

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Per corutra, Sri Swaroop Orilla, learned Special Government Pleader for State Tax, submits that the scope of interference against show-cause notice is very limited. Hear,y reliance is placed on the judgment of the Supreme Court in Special Director v. Mohd. Ghulam Ghouses. For the same proposition, he placed reliance on the order of Division Bench of this Court in GMR Pochanpalli Expressways Limited v. Additional Director,

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'^{w.p.No-20080 of 2024. datedio.oi.2024}

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t IZOO+;^{3 Supreme CourtCases440}

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T{ACJ & RY,J W.P.Nos.26l]95 2023 'SP,J) & batch

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Directorate General of GST Intelligence,^{Hyderabad'Zonal} Unita.

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No other poirrl is pressed.

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We have heard the parties at length and peruse,l^{thr: record.}

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Findinss:

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1 1 . Before dealin g with rival contentions, it is ap posite to consider the statrrtory provision i.e., Section 32(1t of VAT Act reads thus:

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

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(1) The Commissioner may suo motu call for and erxamine the record of any order passed or proceeding recorded by any authority, ofi-rcer or person subordinate to him, un,:ler the provisions ol the Act including sub-section (2) zind if such order or proc'eeding recorded is prejudicial to the interests of revenue, mal make such enquiry, or cause such enquiry to be made and sr rlrject to the provisions of the Act _1nay initiate proceedinqs to revise, modify or set aside such order or proceedinq and may^pass such order in reference the reto as he thinks fit

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(Emphasis Srrpplied)

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A plain rea<ling of this provision makes it clear that the Revisional Authorit-v is competent to initiate proceedings to revise, modify or set asidc' the order. Pertinently, the learned cr:,unsel for

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o w-P.No.16266 0f2021. darrc 08.I0.2024

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HACJ (SP,J) & RY,J W.P.Nos.26395 2023 & batch

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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

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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:

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'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 parLies. Unless. the Hish Court is satished that the showcause notice was totallv non est in^.the eye of law for absolute want of iurisdiction of the authoriW to even investieate into facts, writ^petitions should not be entertained for the mere askinq and as a matter of routine , and the writ petitioner should invariablv be directed to respond to the show-cause notice and take all stands hiehlishted in the writ petition. Vlhether the show-cause notice was founded on anv legal Dremises is a iurisdictional issue which can even be ursed by the recioient of the notice and such issues also can be adiudicated bv the authoritv issuinq the verv notice initiallv. before the assrieved 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 hnally

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H;\CJ ('iP,J) & RY,J W.P.Nos.26395 Zrt23 &^batch

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granted in thr:^{writ petition is not accorded to the writ} [etitioner^{even i]t the thresholdby the interim protectioll not} granted."

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(EmPhasis^rSuPPlied)

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14.^{The highlightedportion of this paragraph makesit r:lear that} even if^{lega1premise of jurisdictionalissue is lackinga:i per the} petitioners^{in the show-causenotices, they may file re'ply ald raise} that objection.^{wt: are unableto persuadeourselveswith the line} of argument^{of L:arned counsel for the petitioners that since} learned^{Revisional.A.uthority has based its notice on the Supreme} Court^{judgment, they cannot have any defence wtrileFrling the} reply.^{If in the oprnionof the petitioners, the said Strpreme Court} judgment is either not applicable^{ordistinguisha'ble,the} petitioners can^{sa) so in their reply. The show-causenoticeis} tentative^{in nature, which can be seen from the last parra.graph of} the notice^{itself. Nothing prevents the petitioners to rely on the} circulars^{which u't:re issuedby the StateGovernmenl.,if such} circulars^{are in support of the petitioners'claim.In thaL event, it} will be the^{duty of the Revisional Authorityto considt:r all the} objections taken^{by the petitioners in their reply.}

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The necessary^{ingredients on which interferenc<: can be} made at the^stage of^{show-cause notice are absentin the present}

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HACJ (SP,J) & RY,J W.P.Nos.26395 2023 &. ba,tch

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cases. At^{the cost ofrepetition, thequestionof}

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competence/jurisdiction^{is not involved in the present matters.} Whether the^{appellate order discloses necessary ingredientsto} show that it^{is prejudicialto the interest of Revenueor not can} also be^{raisedwhile filing objection/ responseto the show-catrse} notice. We^{say so, in view of the principleslaid down by the} Supreme^{Court in Mohd.Ghulam Ghouse(supra).}

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So far^{the judgment of this Court in M/s. Nice Enterprisers} (supra) is concerned,^{suffice itto 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,} 2O17. In^{this peculiar backdrop, wherenecessaryingredients for} a vatid^{show-cg.usenotice weremissing, this Court interfered with} the show-cause^{notice, set it asideand gave liberty to the Revenue} to issue a^{propershow-cause notice. The said judgment cannot} be stretched^{and pressedinto serrrice in the present cases, where} revisional^{notice is not sketchy or cryptic.}

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As^{analyzed above,the impugrred show-causenotices cannot} be interfered^{with. Resultantly, interference isdeclined'The}

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IIACJ (SP,J) & RY,J W.P.Nos.2ti395 2021 & batch

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petitioners mal/ file their reply to the show-cause nol.ices by taking all possible grorrnds within three weeks from today. The Competent Authority shall consider the reply arLd c.ecide the matters, in accordance with law, expeditiously.

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