2024 (7) TMI 45 - HC - GST

Levy of GST - Extra Neutral Alcohol (ENA) supplied by the petitioner - HELD THAT - The petitioner was called upon to submit his written explanation for not making demand along with the interest. It is also stated that petitioner can seek personal hearing while filing the written explanation. It is made clear that no such written explanation was submitted nor the opportunity to have the personal hearing is sought for by the petitioner. No reasonable explanation is given by the petitioner as to why he has not chosen to file written explanation, seeking personal hearing. As rightly contended by the learned counsel for the respondents, it is only a show-cause notice issued by respondent No. 1 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 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. Petition dismissed.

Summary

Issues:
Challenge to Show Cause Notice under GST Act on Extra Neutral Alcohol (ENA) supply.

Analysis:
1. The petitioner approached the court seeking a writ of certiorari to quash the Show Cause Notice issued by respondent No. 1 regarding the demand of GST on Extra Neutral Alcohol (ENA) supplied by the petitioner. The petitioner argued that ENA, being un-denatured spirit, is not covered under the GST rate schedule, and the respondents lacked authority to issue such notices. The petitioner relied on a Supreme Court decision regarding exclusive state control over industries manufacturing potable liquors to support their case.

2. The respondents contended that the Show Cause Notice was issued under Section 50 of the GST Act, and the authority to levy tax and GST was derived from notifications issued by the Central Government. They argued that the petitioner failed to submit a written explanation in response to the notice, which rendered the challenge to the notice premature. The respondents cited a Supreme Court decision emphasizing the importance of submitting a written explanation before challenging a Show Cause Notice.

3. The court noted that the petitioner did not provide any reasonable explanation for not submitting a written explanation or seeking a personal hearing as offered in the Show Cause Notice. The court agreed with the respondents that the petitioner rushed to challenge the notice without availing the opportunity to present their case adequately. The court referenced a recent Supreme Court decision that discouraged approaching the court at the stage of a Show Cause Notice without providing a written explanation.

4. Ultimately, the court dismissed the writ petition, stating that the petitioner's failure to submit a written explanation before challenging the Show Cause Notice made the petition premature and not maintainable. The court emphasized the importance of allowing the authority to consider the petitioner's defense before seeking judicial intervention. The court's decision was in line with the principle that alternative remedies should be exhausted before approaching the court.

This comprehensive summary provides a detailed analysis of the judgment, covering the arguments presented by both parties and the court's reasoning leading to the dismissal of the writ petition challenging the Show Cause Notice under the GST Act.