2024 (3) TMI 220 - HC - GST

Validity of SCN issued in respect of distinct assessment periods - petitioner contends that the show cause notices were issued by pre-determining and pre-judging that the goods fall within Chapter 8708 and not 8512 - HELD THAT - Ordinarily, a show cause notice is not interfered with unless issued by a person without jurisdiction or unless no case is made out even proceeding on the assumption that the statements in the show cause notice are correct. The petitioner has placed on record the notes under Section XVII, which deals with chapter 85. He has also placed on record the HSN Explanatory notes. In multiple judgments of this Court and the Supreme Court, the HSN Explanatory notes have been referred to and relied upon as an authoritative guide to issues relating to classification. The petitioner has also placed for consideration Instruction No.1/2022, which refers to several judgments of the Supreme Court. If the petitioner / assessee placed this material before the assessing officer, it is needless to say that the assessing officer is under an obligation to consider this material with an open mind in an objective manner before concluding the assessment. Petition are disposed of by directing the petitioner to reply to the respective show cause notices. Upon receipt thereof, the assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter conclude the assessments.

Summary

Issues involved:
Challenge to show cause notices regarding classification of goods under GST laws.

Summary:
In a series of writ petitions, the petitioner contested show cause notices challenging the classification of goods under GST laws. The petitioner, engaged in manufacturing electrical equipment for motor vehicles, had been paying taxes at 18% under Chapter 8512 since November 2017. However, an intimation was received in December 2023 stating the goods should be classified under Chapter 8708, leading to the issuance of show cause notices in January 2024.

The petitioner argued that the notices were issued with a predetermined view regarding classification, citing conflicting notes under Section XVII and the need to interpret them with reference to HSN Explanatory Notes. Reference was made to a Supreme Court judgment and customs instructions emphasizing consideration of all facts before classification. The respondent, represented by the Additional Government Pleader, contended that classification should be determined by the assessing officer and that show cause notices are just initial steps in the assessment process.

The assessing officer's proposal in the show cause notices to levy taxes at 28% for certain periods raised concerns of pre-judgment. The court emphasized the importance of considering HSN Explanatory Notes and other relevant material before concluding the assessment. The petitions were disposed of with directions for the petitioner to respond to the notices, ensuring a fair opportunity for discussion and assessment by the officer.