Writ petition against GST show cause notice dismissed; taxpayer directed to respond and exhaust statutory remedies first

The HC dismissed a writ petition challenging a GST show cause notice, ruling that disputed facts required adjudication by the Proper Officer. The petitioner claimed the officer lacked jurisdiction and contested tax liability calculations, admitting to adjusting tax against input credit without paying interest for delayed payment. The court directed the petitioner to file a reply within 15 days, emphasizing the importance of exhausting statutory remedies before seeking judicial intervention. The Proper Officer was instructed to consider all objections, including jurisdictional issues, and issue a reasoned order after proper adjudication.

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Issues: Jurisdiction of Proper Officer under CGST/OGST Act, Proper response to Show Cause Notice, Alternative remedy under statute

Jurisdiction of Proper Officer under CGST/OGST Act:
The petitioner challenged the Show Cause Notice issued by the Opposite Party No. 1 under Section 74 of the CGST/OGST Act, arguing that the Proper Officer lacked jurisdiction to invoke the said provision. The petitioner contended that instructions appended to GSTR-9 cannot override statutory provisions. The counsel for the Opposite Party stated that the petitioner failed to discharge tax liability despite receiving TDS and filing GST returns as 'Nil'. The Proper Officer had determined the tax short paid, interest, and penalty, providing an opportunity to rebut in the notice. The court noted that the petitioner's contentions were disputed facts requiring adjudication based on available documents and evidence during the adjudication process before the Proper Officer.

Proper response to Show Cause Notice:
The court referenced a judgment by the Hon'ble Supreme Court regarding the importance of responding to Show Cause Notices and utilizing alternative remedies under the statute. The petitioner admitted to adjusting tax liability against input tax credit but not paying interest for delayed adjustment/payment. The court emphasized that disputed facts needed adjudication by the Proper Officer, allowing the petitioner to file a Show Cause reply and raise objections, including jurisdictional issues. The court directed the petitioner to file its reply/objection within 15 days, enabling the Proper Officer to address each objection and issue a reasoned order.

Alternative remedy under statute:
The court highlighted the importance of utilizing alternative remedies under the statute rather than approaching the High Court directly to challenge Show Cause Notices. It emphasized the need for respondents to respond to Show Cause Notices with supporting material before seeking judicial intervention. The court disposed of the writ petition, emphasizing the significance of following proper procedures and utilizing available statutory remedies before seeking judicial intervention.

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