Show cause notice challenge based on past statements refused; respondent allowed eight weeks to reply, petition dismissed

Challenge to a show cause notice rested on past pre GST statements; court held that interference at the show cause stage is permissible only if the notice is ex facie without jurisdiction or violates principles of natural justice, and such preliminary challenge was not established. The High Court declined to set aside the notice, granted eight weeks for response, and directed that time spent in the petition will not count against the limitation for adjudication. The petition was dismissed without costs, with liberty to raise admissibility and other defenses during the adjudication process.

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Issues:
Challenge to show cause notice based on statements recorded in the past, Jurisdiction of the court to interfere at the stage of show cause notice issuance.

Analysis:
The petition challenged a show cause notice issued to the petitioner by the 4th respondent, primarily based on statements recorded in the past during the Pre-GST regime. The petitioner argued that these statements were not recorded during any formal enquiry or proceeding and should not be considered as evidence. Citing a previous decision, the petitioner contended that such statements were non-est and insufficient to support the show cause notice. The petitioner urged that the notice should be set aside as it lacked substantial material besides the mentioned statements.

The respondents, however, argued that the notice was not solely based on the past statements but also on other materials revealed during the investigation. They suggested that the issue of the admissibility of these statements and the burden of proof on the revenue could be addressed during the adjudication process after the petitioner responds to the notice.

The court deliberated on the jurisdiction to interfere with show cause notices at the initial stage. Referring to various Supreme Court judgments, it emphasized that interference is warranted only if the notice is ex-facie without jurisdiction or violates fundamental rights or principles of natural justice. The court highlighted that the petitioner should respond to the notice and raise objections during adjudication, as challenging show cause notices prematurely is discouraged to avoid frivolous litigation.

In light of the arguments presented, the court declined to interfere with the show cause notice but granted the petitioner eight weeks to respond. It clarified that the time taken for the petition and the response would not count towards the limitation period for disposing of the notice. The court dismissed the petition with liberty for the petitioner to raise defenses during the adjudication process, ensuring they are duly considered and resolved according to the law.

The judgment concluded by dismissing the petition without costs and directing all concerned parties to act upon an authenticated copy of the order.

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