Court limits interference under Article 226 on show-cause notices; exceptions include lack of jurisdiction or pre-determination. Circular on tax rates upheld.

The Court emphasized limited interference under Article 226 against a show-cause notice. It held that interference is warranted only in exceptional circumstances, such as lack of jurisdiction or pre-determination by the authority. Regarding a Circular limiting a concessional tax rate, the Court found no explicit prohibition and left the matter for the Assessing Authority. The Court rejected the argument of pre-determination by the Assessing Authority, stating the notice merely indicated a tentative opinion. The Court upheld the dismissal of the writ petition, directing the petitioner to reply to the notice within an extended timeframe.

---

---

Issues Involved:
1. Jurisdiction of the Court to entertain the writ petition against a show-cause notice.
2. Validity of the Circular dated 02.01.2018 issued by the Commissioner in light of the notification dated 29.12.2017.
3. Whether the Assessing Authority had pre-determined the issue.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Court to entertain the writ petition against a show-cause notice:

The Court emphasized that the scope of interference under Article 226 of the Constitution against a show-cause notice is extremely limited. The principle established in various judgments, including *Sushil & Company* and *Siemens Ltd.*, is that a writ petition can be entertained only in exceptional circumstances, such as when the show-cause notice is ex facie without jurisdiction or when the authority has already made up its mind. The Court reiterated that a show-cause notice is intended to provide an opportunity for the recipient to present their case, and interference by the Court at this stage would generally be premature unless the notice is a nullity or issued without jurisdiction.

2. Validity of the Circular dated 02.01.2018 issued by the Commissioner in light of the notification dated 29.12.2017:

The appellant-writ petitioner argued that the Circular dated 02.01.2018 issued by the Commissioner restricted the scope of the notification dated 29.12.2017, which provided a concessional tax rate for diesel used in the manufacturing process. The petitioner contended that the Circular limited the benefit to diesel used in generators for manufacturing, whereas the notification did not impose such a restriction. The Court examined the relevant statutory provisions, including Section 4(4) of the Uttarakhand Value Added Tax Act, 2005, which empowers the State Government to issue notifications, and Rule 4 of the Uttarakhand VAT Rules, 2005, which grants the Commissioner the authority to issue orders and directions. The Court noted that Para 12 of the Circular did not explicitly prohibit the concessional rate for other purposes and left the matter for the Assessing Authority to examine.

3. Whether the Assessing Authority had pre-determined the issue:

The appellant-writ petitioner contended that the Assessing Authority had already made up his mind, as evident from the show-cause notice, and no useful purpose would be served in submitting a reply. The Court observed that the show-cause notice merely indicated a tentative opinion and provided an opportunity for the petitioner to show cause and satisfy the Deputy Commissioner that their use of diesel oil fell within the ambit of the notification dated 29.12.2017. The Court found no merit in the argument that the Assessing Authority had pre-determined the issue.

Conclusion:

The Court upheld the learned Single Judge's decision to dismiss the writ petition and directed the appellant-writ petitioner to file a reply to the show-cause notice. The Court modified the order to allow the petitioner additional time to submit their reply. The appeal was dismissed, and the petitioner was advised to avail judicial remedies after the Deputy Commissioner passed an order.

---