2024 (4) TMI 614 - HC - GST

Challenge to SCN issued in respect of assessment years 2019-20 2020-21 2021-22 2022-23 and 2023-24 - ingredients of Section 74 are not made out - HELD THAT - The petitioner submits that the last date for submitting the replies expires on or before 15.04.2024 and the hearing is scheduled on 10.04.2024. In view of the filing of these writ petitions it is just and appropriate that these time lines be revised to enable the petitioner to respond meaningfully to the show cause notices. The petitioner shall reply to the respective show cause notice on or before 29.04.2024 - Upon receipt of the petitioner s reply the respondent is directed to provide a reasonable opportunity to the petitioner including by way of personal hearings - The respondent is further directed to consider all contentions raised by the petitioner objectively and not in a pre-determined manner by taking note of the observations in this order. The petitions are disposed off.

Summary

Issues involved: Challenge to show cause notices for different assessment years u/s 74 of applicable GST enactments, classification disputes regarding catalysts and catalytic converters, application of judgment in Westinghouse Saxby case.

Classification Disputes:
The petitioner, engaged in manufacturing and trading of catalysts and catalytic converters, received show cause notices challenging the classification of products under HSN Codes 38151290 and 84213990. The petitioner had classified the goods under these codes for a considerable period. The petitioner argued that Section 74 cannot be invoked for classification disputes and relied on a previous order upholding their classification. They contended that the classification should be based on headings and relevant notes rather than relying on a specific judgment. The respondent, however, argued that the previous order did not support the petitioner's contention and defended the invocation of Section 74 for penalty imposition.

Judicial Analysis:
The court noted that challenges to show cause notices are usually not entertained unless lack of jurisdiction is established or no case is made out to proceed. The petitioner was advised to respond to the notices, indicating the absence of Section 74 ingredients. They could challenge any subsequent assessment orders if needed. The court highlighted that the petitioner could argue for the correct classification based on the Customs Tariff Act and HSN Explanatory notes, suggesting that the judgment in Westinghouse Saxby might not apply to their case. The court emphasized the need for the respondent to consider all petitioner contentions objectively without pre-determination.

Disposition and Directions:
Considering the merit in the petitioner's claim of contentions being disregarded, the court directed the respondent to objectively consider all arguments without bias. The petitioner was granted an extended deadline to reply to the show cause notices. The respondent was instructed to provide a reasonable opportunity for personal hearings post the petitioner's reply. The court ordered no costs and closed the connected miscellaneous petitions accordingly.