Article 226 interference with sales tax show cause notice declined where material suggested escaped turnover and unaccounted sales.

Interference under Article 226 with a sales tax show cause notice was found unwarranted where the notice was based on material indicating shortage of stock, prima facie escapement of sales tax, and information from excise proceedings suggesting unaccounted sales. The Court noted that the taxpayer could raise its explanation in reply to the notice and that the taxing authority was entitled to continue the inquiry into alleged escaped turnover and tax evasion. On that basis, the challenge to the notice was rejected.

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Issues: Whether the High Court should interfere under Article 226 with a show cause notice issued under the Rajasthan Sales Tax Act, 1994 alleging escaped turnover and tax evasion.

Analysis: The notice was founded on material indicating shortage of stock and prima facie escapement of sales tax, together with information gathered from excise proceedings suggesting unaccounted sales. In such circumstances, the Court held that interference at the notice stage was unwarranted, as the petitioner had the opportunity to submit its explanation in reply to the notice and the taxing authority was entitled to proceed with inquiry into the alleged escapement.

Conclusion: Interference under Article 226 was declined and the challenge to the show cause notice was rejected.

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