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2024 (6) TMI 1035 - HC - GSTClassification of supply - composite supply within the meaning of Section 8(a) of the CGST Act/JGST Act read with Section 2(30) read with Section 2(90) or the supply is mixed supply within the meaning of Section 8(b) read with Section 2(74) of the Act - Extended period of Limitation - HELD THAT - In the instant case, a composite supply principally for transportation of Power Plant Ash up to distance of 50 km is sought to be taxed under Heading 9997 i.e. other services (Textile, Washing, Cleaning, Dying) and Heading 99671 i.e. Cargo Handling Service (Container handling service, Customs House Agent Service, Other Cargo and Baggage Handling Service, Cleaning and Forwarding Services). After going through the show-cause and the factual aspects, which are undisputed; it prima facie appears that the Petitioner has been able to establish a prima facie case of abuse of process of law and lack of jurisdiction. Extended period of Limitation - HELD THAT - The impugned show cause notice has been issued under Section 74 of the Act. This Court in the case of Central Coalfields Ltd. Vs. UOI 2024 (1) TMI 1158 - JHARKHAND HIGH COURT following judgment of the Hon ble Supreme Court in the case of International Merchandising Co. Vs. CST 2022 (12) TMI 556 - SUPREME COURT , has held that where case involves interpretation issue, extended period of limitation is not invokable. The judgment of the Hon ble Delhi High Court in the case of National Building Construction Company Vs. UOI 2020 (12) TMI 619 - DELHI HIGH COURT is under the old Service Tax regime where power was vested in every Central Excise officer U/s 73 of Service Tax unlike the proper officer to whom power is vested under the CGST Act/JGST Act, hence, the said case is distinguishable. Relegating the Petitioner to alternative remedy will be a palpable in-justice - the instant writ application is maintainable - List this case for further hearing on merit on 16th July, 2024.
Issues:
1. Challenge to show cause notice under CGST/JGST Act circumventing procedure 2. Proper officer under CGST Act 3. Extended period of limitation for issuing show cause notice 4. Jurisdiction of High Court to entertain writ petition challenging show cause notice Analysis: 1. The respondent raised a preliminary objection regarding the challenge to the show cause notice, citing the need to follow the procedure under the CGST/JGST Act. Referring to previous judgments, the court emphasized that objections should first be raised before the assessing officer before resorting to legal action. The court highlighted the importance of exhausting all available remedies before approaching the High Court. 2. The issue of the proper officer under the CGST Act was discussed, citing a specific case where the definition and powers of a proper officer were clarified by the Apex Court. The court reiterated the importance of understanding the roles and designations within the tax authorities to determine the validity of actions taken by officers in such cases. 3. Regarding the extended period of limitation for issuing show cause notices, the court referred to a judgment emphasizing that the invocation of an extended period of limitation requires proof of fraudulent activities by the assessee. The court stressed the need for concrete evidence of fraud or misconduct to justify the extension of the limitation period. 4. The petitioner contended that the show cause notice was without jurisdiction and an abuse of the legal process. Citing relevant judgments, the court acknowledged exceptions to the rule of non-interference by writ courts at the show cause notice stage. The court highlighted the importance of establishing prima facie lack of jurisdiction or abuse of process to warrant intervention by the High Court. 5. The court examined the nature of the supply in question, whether it constituted a composite or mixed supply under the CGST/JGST Act. Emphasizing the legal interpretation involved, the court noted that the dispute primarily revolved around a pure question of law, which could be addressed by the court directly. The court referred to precedents where similar legal issues were deemed justiciable by the High Court. 6. After considering the arguments from both parties and reviewing the show cause notice, the court found that the dispute centered on a pure question of law regarding the classification of the supply. The court referred to previous judgments supporting the justiciability of such legal issues in writ petitions, especially when jurisdictional concerns are raised. 7. The court reiterated the exceptions to the rule of non-interference at the show cause notice stage, emphasizing the need to establish lack of jurisdiction or abuse of process. Citing relevant judgments, the court highlighted the circumstances under which the High Court could intervene early in the proceedings based on jurisdictional issues. 8. The court analyzed the specific details of the supply under consideration and concluded that the petitioner had made a prima facie case of abuse of process and lack of jurisdiction. Referring to a three-judge bench decision, the court emphasized the maintainability of the writ petition when taxing authorities exceed their jurisdiction. 9. Further, the court discussed the issuance of the show cause notice under a specific section of the Act and distinguished previous judgments cited by the respondent. The court highlighted the importance of interpreting issues and the inapplicability of the extended period of limitation in certain circumstances. 10. Considering the discussions and the specifics of the case, the court found that denying the petitioner access to alternative remedies would result in injustice. Therefore, the court deemed the writ application maintainable and scheduled further hearings for a later date. 11. The court listed the case for further hearing on the merits, setting a specific date for the next proceedings.
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