TaxTMI 
TaxTMI 
2026 (7) TMI 149
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....ure P-9 at page 425 (Volume-III) to the writ petition, the writ petitioner replied to the said show-cause notice. In the said reply for clarity and verification supporting documents were enclosed which, inter alia, include as follows:- (a) Calculation worksheets demonstrating the methodology adopted for computing the taxable value, as submitted to the audit team. Annexure-4; (b) Invoices-level details of the disputed transactions. Annexure-5; and (c) A copy of every invoice. Annexure-6. 3. In the said reply, the writ petitioner had taken a specific point that single show-cause notice cannot be issued for multiple tax periods (at page 439 to the writ petition). 4. By an email dated June 12, 2025, Annexure P-6 at page 84 to the writ petition, the writ petitioner submitted inter-branch invoices for the period upto March 2024, which were 56 in numbers. 5. Under the impugned order-in-original dated December 12, 2025 Annexure P-12 at Page 454 to the writ petition, the GST authorities have rejected the objection of the petitioner, inter alia, holding that the content of the reply was unjustified in lack of invoices, relevant details supporting the claim....
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.... Mr. Sakya Sen, has primarily challenged the action of the GST authorities, inter alia, on the following grounds :- (a) The impugned show-cause notice culminating in the impugned order was without jurisdiction; (b) The impugned single show-cause notice clubbing multiple financial years is not only illegal and de hors the statute but also without jurisdiction; (c) The impugned order was passed ignoring vital documentary evidence resulting in violation of principle of natural justice; and (d) The invocation of power under Section 74 of 2017 Act is motivated, illegal, arbitrary and without jurisdiction. 10. On facts, learned Senior Advocate submits that the GST authorities through its letter dated June 04, 2025 Annexure P-2 at page 38 to the writ petition requested for certain documents. This correspondence was followed by an email dated June 10, 2025 attaching the said communication dated June 04, 2025 requesting the petitioner to submit documents for the financial years 2018-19 to 2023-24, Annexure P-4 at page 87 to the writ petition. 11. By an email dated June 12, 2025 all the documents were duly provided by the petitioner for the periods 2....
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....r the statute is separate. He then refers to sub-Section (106) to Section 2 of 2017 Act, where the period for which a return is to be furnished is defined. He submits that, reading the said provision with Section 74, it would appear that clubbing of financial years for issuing a single show-cause notice is in contravention to Section 74, as no show-cause notice could be issued beyond five years thereunder. 16. Mr. Sakya Sen, learned Senior Advocate then submits that the limitation for each year could run separately for issuance of show-cause notice and thus, a consolidated show-cause notice could not be issued for multiple financial years. In support, he has relied the following decisions : (i) In the matter of : Titan Company Limited Vs. Joint Commissioner of GST and Central Excise, Salem reported at 2023 SCC OnLine Mad 8082. (ii) In the matter of : State of Jammu and Kashmir Vs. Caltex (India) Ltd. reported at AIR 1966 SC 1350. (iii) A decision of the Hon'ble Bombay High Court In the matter of : Milrue Good Earth Developers Vs. Union of India rendered in WP No.2203 of 2025 17. Opposing the impugned action of the GST authorities in violation of Sec....
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....ct. Whether all the materials placed before the authority by the petitioner had been considered or not while issuing the show-cause notice or passing the impugned order in pursuance thereof are also required to be gone into by examining the facts. Writ court is not the forum to conduct a detail fact-finding enquiry. The statutory appellate remedy is vested with the power to go into the facts. Hence, appellate remedy is the appropriate remedy for the writ petitioner. 23. Mr. Dilip Kumar Agarwal, learned Advocate appearing for the revenue then submits that while issuing the show-cause notice or passing the impugned order thereunder, the authority has not acted without jurisdiction. There is no inherent lack of jurisdiction. Thus, appellate remedy under Section 107 of the statute is the appropriate remedy and not the writ petition. 24. Mr. Agarwal, further submits that in the event of fraudulent availment of benefit under the said 2017 Act, where transactions are spread across several years, a consolidated show-cause notice is permitted in law. In support, learned Advocate for the revenue has relied upon following decisions: (a) A judgment of the Delhi High Court In the....
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.... of the 2017 Act, the provision is quoted below :- "Section 74: Determination of tax, pertaining to the period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. (2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order. (3)....
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....hort paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded. [(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.] Explanation 1.- For the purposes of section 73 and this section,- (i) the expression "all proceedings in respect of the said notice" shall not include proceedings under section 132; (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under [sections 122 and 125] are deemed to be concluded. xxx" 30. Section 74 of 2017 Act provides for det....
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....ual return for the relevant financial year to such the taxes due. The expression and language used under sub-Section (10) to the effect "... from the due date for furnishing of annual return for the financial year ... or within five years from the date of issuance of refund ..." is of most important significance. While including the said language under sub-Section (10) to Section 74 of the 2017 Act, the legislature specifically noted a particular financial year and as such used the expression" ..for the financial year. Thus, 2017 Act considers each and every financial year as a separate unit, due to which the legislation has specified every financial year separately and independently. 33. It is trite that taxing statute should be interpreted and construed strictly. Sub-Section (1) to Section 74 empowers the proper officer for issuance of show-cause notice subject to the time limit provided under sub-Section (10), as enumerated under sub-Section (2) to Section 74. Sub-Section (10) imposses a restriction and bar by framing a specified time limit within which the show-cause notice has to be issued. On a harmonious and meaningful construction of the sub-Sections under Section 74, it....
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....and when notice is issued based upon the annual return, the same has to be for the entire relevant financial year only and not for any further financial year. 38. The expression return is defined under sub-Section (97) to Section 2 of 2017 Act, which means any return prescribed or otherwise required to be furnished by or under this Act or the Rules made thereunder. An assessee is required to file monthly return as well as annual return and issuance of show-cause notice should be strictly on the basis of the relevant tax period, which is determined based on filing of return. Thus, it is clear that the show-cause notice can be issued either based on monthly return or annual return for the entire year or part thereof as decided by the department. If any return is filed for more than one financial year, then, based on the said returns, one single show-cause notice can be issued. Since under the provisions of the 2017 Act there is no provision for filing of return other than the monthly and yearly for a particular financial year, single show-cause notice cannot be issued for multiple financial years. 39. As discussed above, on a meaningful and conjoint reading of the provisions un....
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....use notices and the same is liable to be quashed." 43. A Division Bench of the Hon'ble Bombay High Court had also upheld the view In the matter of : Milrue Good Earth Developers (supra) and had observed as under :- "25. In our view, the aforesaid observations merely being of primary nature without appreciating the provisions in the Act of 2017 and Rules made therein, and recording a finding that there is no prohibition in issuance of notice calling upon payment of tax for different financial years, in our considered opinion, since the Petition before the Division Bench called for quashing of the demand notice referring to different financial years, but in any case the Court expressed the prima facie opinion and recorded that there is no issue of limitation as contemplated under Section 74(10). In any case the Court refused to show indulgence and directed the Petitioner to face the show cause notice and therefore the Division Bench did not express it final opinion. 26. For the reasons recorded above, by overruling the objections raised by Ms Desai for entertaining the Petition is merely based on the show cause notice as we find that there is no provisio....
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....ute bar before a writ Court. 48. If on a close scrutiny of an act of an authority, on record, it appears that the jurisdictional error is so apparent and ex facie for which no further fact or evidence is required to be enquired or looked into, existence of an alternative remedy is not a bar. The plenary power of the Constitutional Court in exercise of its plenary jurisdiction under Article 226 of the Constitution of India has the authority and jurisdiction to correct such a jurisdictional error. If a Constitutional Court finds that without going into any factual dispute or any triable issue, the jurisdictional error can be corrected or is required to quashed, it would always be open for judicial scrutiny. 49. The Hon'ble Supreme Court In the matter of : Godrej Sara Lee Ltd. (supra) had observed as under :- 5. A little after the dawn of the Constitution, a Constitution Bench of this Court in its decision reported in [1958] SCR 595 (State of Uttar Pradesh v. Mohd. Nooh) had the occasion to observe as follows: "10. In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where t....
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....to facts is unnecessary, the high court could entertain a writ petition in its discretion even though the alternative remedy was not availed of; and, unless exercise of discretion is shown to be unreasonable or perverse, this Court would not interfere. In the latter decision, this Court found the issue raised by the appellant to be pristinely legal requiring determination by the high court without putting the appellant through the mill of statutory appeals in the hierarchy. What follows from the said decisions is that where the controversy is a purely legal one and it does not involve disputed questions of fact but only questions of law, then it should be decided by the high court instead of dismissing the writ petition on the ground of an alternative remedy being available." 50. It is true that statutory appellate remedy exists where the said impugned notice dated June 25, 2025 and the impugned order-in-original dated December 12, 2025 Annexure P-12 at page 454 to the writ petition could be challenged but since this Court has already held hereinabove that the said impugned show-cause notice is in violation of the statutory provision and has been issued without jurisdiction and/....