GST show-cause notice u/s74: dispute over officer's delegated jurisdiction; reply allowed, enforcement stayed without leave.

The dominant issue was whether the officer initiating proceedings under s.74 CGST/WBGST Act, 2017 had jurisdiction/competence, including by valid delegation of powers. The HC held that the challenge raised a jurisdictional question warranting adjudication in writ proceedings and, considering a prima facie case and balance of convenience, permitted the assessee to file its reply to the already-issued show-cause notice. As an interim safeguard, the HC directed that any order passed by the proper officer pursuant to the notice shall not be given effect to without the HC's leave, while granting the revenue liberty to file affidavits.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the writ petition challenging a show-cause notice under Section 74 raises a jurisdictional issue warranting judicial examination at the notice stage.

(ii) Whether, pending adjudication, the Court should grant interim protection by allowing the petitioner to reply to the show-cause notice while restraining the authorities from giving effect to any resultant order without the Court's leave.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Maintainability/entertainment at show-cause stage where lack of jurisdiction is alleged

Legal framework (as discussed): The Court notes the challenge is to a show-cause notice issued under Section 74 of the CGST/WBGST Act, 2017, and the petitioner's objection is founded on alleged want of competence of the issuing officer (a jurisdictional objection). The respondent relies on a notification delegating powers to specified classes of officers, contending competence as "proper officer".

Interpretation and reasoning: The Court accepts that the writ petition raises a jurisdictional issue, and specifically records its view that such issue "is required to be heard". While the respondent urges non-interference because the matter is at show-cause stage and the petitioner has not yet replied, the Court treats the jurisdictional objection as sufficient to warrant judicial scrutiny.

Conclusion: The Court conclusively holds that the petition raises a jurisdictional issue requiring hearing, notwithstanding that the impugned action is presently only a show-cause notice.

Issue (ii): Appropriate interim arrangement pending decision on jurisdiction

Legal framework (as discussed): The Court considers interim relief on conventional parameters-prima facie case and balance of convenience-while factoring that the show-cause notice has been issued and the petitioner has not yet filed a response.

Interpretation and reasoning: The Court balances (a) the need to permit the statutory process to continue by allowing the petitioner to respond to the show-cause notice, with (b) protection against irreversible prejudice if an adverse order is passed while the jurisdictional challenge remains pending. It therefore fashions a limited protection: any order passed by the proper officer shall not be given effect to without leave of the Court. The Court also records the petitioner's undertaking not to seek unnecessary adjournments.

Conclusion: The Court directs that the petitioner may respond to the show-cause notice, but grants limited interim protection restraining implementation of any resultant order without prior leave of the Court.

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