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2024 (5) TMI 813 - HC - GSTLevy of GST on Extra Neutral Alcohol (ENA) supplied by the petitioner - Validity of show cause notice - HELD THAT - The respondents placed reliance on the recent decision of the Hon ble Apex Court Union of India in UNION OF INDIA OTHERS VERSUS COASTAL CONTAINER TRANSPORTERS ASSOCIATION OTHERS 2019 (2) TMI 1497 - SUPREME COURT where the Apex Court held ' We find force in the contention of the learned senior counsel, Sri Radhakrishnan, appearing for the appellants that the High Court has committed error in entertaining the writ petition under Article 226 of Constitution of India at the stage of show cause notices. Though there is no bar as such for entertaining the writ petitions at the stage of show cause notice, but it is settled by number of decisions of this Court, where writ petitions can be entertained at the show cause notice stage. Neither it is a case of lack of jurisdiction nor any violation of principles of natural justice is alleged so as to entertain the writ petition at the stage of notice.' Therefore, it is clear that the Apex Court frowned upon the practice of approaching this court on 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.
Issues:
The issues involved in the judgment are the challenge to a Show Cause Notice issued under Section 50 of the Karnataka Goods and Services Tax, 2017 (KGST) on Extra Neutral Alcohol (ENA) by the petitioner, and the maintainability of the petition without filing a written explanation in response to the notice. Challenge to Show Cause Notice: The petitioner sought a writ in the nature of certiorari to quash the Show Cause Notice dated 07.08.2023 issued by respondent No. 6 regarding the levy of KGST on ENA supplied by the petitioner. The petitioner contended that ENA, being un-denatured spirit, is not covered under the relevant notification and that respondent No. 6 lacked the authority to issue such notices. The petitioner relied on the decision in Bihar Distillery case to argue that industries manufacturing rectified spirit for potable liquors fall under the exclusive control of the State Government. The petitioner sought relief through the writ of certiorari based on these grounds. Respondents' Argument: The respondents opposed the petition, stating that the Show Cause Notice was issued under Section 50 of KGST, and respondent No. 6 had the authority to levy the tax based on the Central Government's notification. They argued that the petitioner did not submit a written explanation in response to the notice, as required, and cited the decision in Union of India Vs Coastal Container Transporters Associations to support their contention that challenging a Show Cause Notice without submitting a written explanation is not maintainable. They also referred to a decision of the Division Bench of Allahabad High Court to counter the petitioner's reliance on the Bihar Distillery case. Judgment and Dismissal: 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. The Court observed that the petitioner rushed to challenge the notice without availing the opportunity to present his defense. Despite the petitioner's reliance on the Bihar Distillery case, the Court referred to a recent decision of the Apex Court emphasizing the importance of submitting a written explanation before challenging a Show Cause Notice. The Court concluded that the petitioner's failure to provide an explanation rendered the writ petition not maintainable and dismissed the petition accordingly. Conclusion: In conclusion, the High Court dismissed the writ petition challenging the Show Cause Notice for KGST on ENA due to the petitioner's failure to submit a written explanation as required by law. The Court emphasized the importance of availing the opportunity to present a defense before seeking judicial intervention, citing relevant legal precedents.
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