Writ challenge to GST show cause notice rejected where disputed facts and classification issues needed statutory adjudication.
A writ petition challenging a GST show cause notice was held not maintainable where the notice was based on investigation material, audit findings and recorded statements, and the dispute involved factual and classification questions that should be raised in reply before the adjudicating authority. The court also held that an earlier classification ruling did not, by itself, warrant quashing the notice, because the present notice rested on a different factual foundation and the petitioner could still press all rate and classification objections in the statutory process. The petition was dismissed with liberty to file a reply and with all contentions kept open.
Issues: (i) Whether a writ petition under Article 226 of the Constitution of India was maintainable against the impugned show cause notice when the petitioner had not filed a reply and the controversy involved disputed factual and classification questions. (ii) Whether the petitioner could rely on an earlier classification decision to contend that the impugned notice was unsustainable on the ground of judicial discipline and prior conclusiveness.
Issue (i): Whether a writ petition under Article 226 of the Constitution of India was maintainable against the impugned show cause notice when the petitioner had not filed a reply and the controversy involved disputed factual and classification questions.
Analysis: The notice was founded on investigation material, audit findings, statements recorded during inquiry, and the department's allegation of short payment of GST for a defined period. The petitioner sought to bypass the statutory process even before filing a reply. The Court held that where the notice discloses substantial material and the controversy can be answered in the adjudicatory process, the proper course is to place a reply before the adjudicating authority. A writ petition against a show cause notice is not to be entertained as a matter of routine, particularly when disputed facts and enquiry-based issues arise and the statutory scheme provides reply and appellate remedies.
Conclusion: The challenge to the show cause notice was not entertained and the writ petition was dismissed on this ground.
Issue (ii): Whether the petitioner could rely on an earlier classification decision to contend that the impugned notice was unsustainable on the ground of judicial discipline and prior conclusiveness.
Analysis: The earlier decision relating to classification of glucometers was noted, but the present notice was found to rest on a different factual foundation, including the department's assertion of short payment arising from the nature of the supplies and the applicable GST rate over the relevant period. The Court held that the earlier ruling did not conclude the present notice in writ jurisdiction. The petitioner remained free to raise all classification and rate objections before the proper officer in reply to the notice. The Court also held that invoking writ jurisdiction at this stage would amount to an impermissible circumvention of the statutory mechanism.
Conclusion: The earlier classification ruling did not warrant quashing of the impugned notice at the threshold.
Final Conclusion: The petition was dismissed, with liberty to file a reply to the show cause notice and with all contentions kept open for adjudication in accordance with law.
Ratio Decidendi: A writ petition challenging a show cause notice should not be entertained where the controversy turns on disputed facts or matters capable of adjudication in the statutory process, and an earlier decision does not bar the notice unless it conclusively covers the same factual foundation.
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