2023 (12) TMI 1277 - HC - GST

Anti-Profiteering proceedings - Maintainability of petition against a mere show-cause notice or charge-sheet - Legality of notice initiated under Rule 129 of the Central Goods and Services Tax Rules, 2017 - HELD THAT - The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge-sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. A mere show-cause notice or charge-sheet does not infringe the right of anyone. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance. Thus, no strong case has been made out by the petitioner calling for interdiction of the notice and summons under challenge - petition disposed off.

Summary

Issues involved:
The judgment involves a challenge to a notice issued under Rule 129 of the Central Goods and Services Tax Rules, 2017, seeking a Writ of Mandamus and stay of further proceedings. The key issue is whether the petitioner passed on the benefit of reduction of the entertainment tax to consumers, contravening Section 71 of the CGST Act, 2017.

Summary:
The petitioner challenged a notice and summons issued by the Directorate General of Anti-Profiteering, now pursued by the Competition Commission of India, alleging failure to pass on tax reduction benefits to consumers. The petitioner argued that as a cinema operator providing services, passing on price reductions was impractical due to fixed ticket prices set by the government, inclusive of taxes. The petitioner contended that despite paying taxes at reduced rates, any base price increases benefited the government. The respondent maintained that the petitioner's defenses could be raised in their response to the notice and summons for consideration by the authorities concerned.

The court referred to relevant Supreme Court cases emphasizing that writ petitions against show-cause notices are generally premature as they do not establish a cause of action until final adverse orders are issued. The court found that the petitioner had not presented a strong case to challenge the notice and summons. It directed the petitioner to respond to the authorities with detailed explanations and documents, allowing the authorities to proceed in accordance with the law. Additionally, the court directed the Competition Commission of India to permit virtual appearances for economic and practical reasons, considering the digital age and the challenges of physical attendance.

In conclusion, the court disposed of the writ petitions with the aforementioned directions and observations, without imposing any costs. Any pending miscellaneous petitions were ordered to be closed.