9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 753 - HC - GSTValidity of Demand-cum- Show Cause Notice under Section 63 of the CGST/OGST Act - scope of alternative remedy - participation of assessee in the proceeding by furnishing appropriate explanation in order to determine the correct tax liability - demand of tax with interest and penalty - HELD THAT - Clear proposition with reasons are found mentioned in the impugned Demand-cum-Show Cause Notice as to why the Proper Officer has sought to invoke the provisions of Section 63 of the CGST/OGST Act which essentially relates to the facts and circumstances of the case. Of course, the petitioner has the fullest opportunity to refute and rebut the same during the course of proceeding. It is possible for the petitioner to seek for further time, if according to him the time given by the authority for filing the reply was required to be extended in order to enable her to collect further material. It cannot, therefore, be said that the Demand// cum-Show Cause Notice would be rendered invalid. The present case seems neither to be a case of lack of jurisdiction nor is there any allegation of violation of principles of natural justice. The petitioner has ample opportunity to agitate issue before the Proper Officer. Therefore, this Court feels entertainment of the writ petition at the stage of Demand-cum- Show Cause Notice would be premature. Doing so would frustrate the tax administration and adjudication process. This Court is alive to the fact that the statute under consideration, viz., the CGST/OGST Act(s) and rules framed thereunder provide sufficient safeguard for the assessee-petitioner, more so, when against the final orders of adjudication, appeal lies. It is, therefore, necessary for the Proper Officer to examine on the basis of materials available on record and that are furnished by the petitioner-assessee whether he is required to proceed to assess the tax liability of the taxable person on account of failure to obtain registration - the enquiry/process of assessment requires factual determination with reference to liability and requirement of obtaining registration. Having not found illegality, irrationality, procedural impropriety and proportionality in issue of Demand-cum-Show Cause Notice by the Proper Officer, this Court does not, therefore, deem it expedient to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India, and the petitioner is, therefore, relegated to place appropriate material before the Proper Officer for arriving at just determination of liability. This Court does not wish to entertain the writ petition challenging Demand-cum-Show Cause Notice issued under Section 63 of the OGST Act/the CGST Act and, therefore, the writ petition stands dismissed.
Issues Involved:
1. Propriety of the Demand-cum-Show Cause Notice dated 17.02.2022 under Section 63 of the OGST Act, 2017. 2. Requirement of registration under Section 24(iii) of the OGST Act. 3. Classification of "royalty" as a "service" and its tax implications. 4. Interim protection against the levy of GST on royalty. 5. Self-imposed restrictions on the High Court's writ jurisdiction in the presence of an alternative remedy. Detailed Analysis: 1. Propriety of the Demand-cum-Show Cause Notice dated 17.02.2022 under Section 63 of the OGST Act, 2017: The petitioner challenged the Demand-cum-Show Cause Notice issued under Section 63 of the OGST Act, claiming it was improper. The court noted that the notice was issued because the petitioner failed to register and discharge tax obligations. The court emphasized that the petitioner should respond to the notice and participate in the proceedings to avail the opportunity of being heard. The court found no grounds to quash the notice at this stage, deeming the writ petition premature. 2. Requirement of registration under Section 24(iii) of the OGST Act: The petitioner argued that they were not liable to register under Section 24(iii) of the OGST Act, as royalty paid to the government should not be treated as a service. The court disagreed, stating that the petitioner was liable for compulsory registration and payment of GST on a reverse charge basis. The court highlighted that the proper officer initiated proceedings under Section 63 to assess the tax liability of an unregistered person. 3. Classification of "royalty" as a "service" and its tax implications: The petitioner contended that royalty should not be classified as a service and cited Supreme Court decisions where royalty was considered a tax. The court noted that the issue of whether royalty is a tax is pending before a nine-Judge Bench of the Supreme Court. However, the court emphasized that the proper officer has the authority to determine the tax liability under the current statutory framework. 4. Interim protection against the levy of GST on royalty: The petitioner sought interim protection against the levy of GST on royalty, referencing interim orders from various High Courts and the Supreme Court. The court noted that the Supreme Court had not restrained statutory authorities from proceeding with assessments in similar cases. The court also pointed out that interim orders from other High Courts do not have binding precedent and only have persuasive value. Therefore, the court declined to grant interim protection. 5. Self-imposed restrictions on the High Court's writ jurisdiction in the presence of an alternative remedy: The court discussed the principle of self-imposed restrictions on entertaining writ petitions when an alternative remedy is available. The court emphasized that the statutory scheme requires a show cause notice, response, and final determination by the adjudicating authority. The court cited several Supreme Court decisions reinforcing the principle that writ petitions should not be entertained at the show cause notice stage unless there is a lack of jurisdiction or violation of natural justice. The court concluded that the petitioner should first respond to the show cause notice and exhaust the statutory remedy before approaching the High Court. Conclusion: The court dismissed the writ petition, stating that the petitioner should respond to the Demand-cum-Show Cause Notice and participate in the proceedings. The court emphasized that the statutory process must be followed, and the petitioner has the opportunity to present their case before the proper officer. The court reiterated that interim orders from other High Courts are not binding and that the writ petition was premature.
|
