2024 (5) TMI 359 - HC - GST

Restraint on levying GST on un-denatured Extra Neutral Alcohol supplied by the petitioner - no written explanation was submitted nor the opportunity to have the personal hearing is sought for by the petitioner - violation of principles of natural justice - HELD THAT - It is only a show-cause notice issued by respondent No. 4 calling upon the petitioner to submit his explanation. An option was also given to seek personal hearing. Even though, there is no explanation by the petitioner for the reasons best known to him, the petitioner has rushed to this court seeking to quash the show-cause notice on several grounds and such grounds could have been raised by the petitioner in his written explanation as to why said show-cause notice could not have been issued. The Apex Court in UNION OF INDIA OTHERS VERSUS COASTAL CONTAINER TRANSPORTERS ASSOCIATION OTHERS 2019 (2) TMI 1497 - SUPREME COURT frowned upon practice on approaching this court of issuance of show-cause notice, without giving written explanation to enable the authority to consider his defence and to pass appropriate orders. Therefore, the petitioner has rushed to this court to challenge the show-cause notice without availing the opportunity given to him to submit his written explanation. Therefore, the writ petition is not maintainable. The writ petition is dismissed.

Summary

Issues involved:
The issues involved in the judgment are the challenge to a Show Cause Notice issued u/s 50 of the Goods and Services Tax Act, 2017 regarding the levy of GST on un-denatured Extra Neutral Alcohol, and the maintainability of the petition without submitting a written explanation as required by the notice.

Challenge to Show Cause Notice:
The petitioner challenged the Show Cause Notice issued by respondent No. 4, contending that Extra Neutral Alcohol (ENA) being un-denatured spirit is not covered under the relevant GST rate schedule. The petitioner argued that the State Government has exclusive control over industries manufacturing rectified spirit for potable liquors, and thus respondent Nos. 4 and 5 lacked authority to issue the Show Cause Notice. The petitioner sought writ relief in the nature of certiorari to quash the notice.

Maintainability of the Petition:
The respondents argued that the petitioner failed to submit a written explanation in response to the Show Cause Notice, as required by law. They cited the Supreme Court's decision emphasizing the importance of submitting a written explanation before challenging a Show Cause Notice. The respondents contended that the petition was not maintainable as the petitioner did not comply with the procedural requirements and rushed to court without availing the opportunity to present his defense.

Judgment:
The Hon'ble Court noted that the petitioner did not provide a written explanation or seek a personal hearing as offered in the Show Cause Notice. Referring to relevant case law, the Court highlighted that approaching the court without submitting a written explanation was not proper and frowned upon by higher authorities. The Court concluded that the petitioner rushed to challenge the notice without availing the opportunity to present his defense. As a result, the writ petition was deemed not maintainable and was dismissed.