2024 (10) TMI 782 - HC - GST

Violation of principles of natural justice - alleged vagueness in the SCN - SCN was vague and bereft of the relevant particulars - HELD THAT - In the present case, considering the relief pressed, the argument was about violating the principles of natural justice because of the alleged vagueness of the impugned show cause notice. However, there was no vagueness in the impugned show cause notice. The impugned show cause notice was quite detailed and gave the Petitioners a complete idea of the case they were required to meet. The Petitioners reply is pretty thorough, and no serious grievance was made about any alleged vagueness in the impugned show cause notice. In Special Director and Another Vs. Mohd. Ghulam Ghouse and another 2004 (1) TMI 378 - SUPREME COURT the Hon ble Supreme Court has held that unless the High Court is satisfied that the show-cause notice was totally non-est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine. The writ petitioner should invariably be directed to respond to the show cause notice and take all the grounds that may now be highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which the recipient of the notice can even urge, and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the Court. In Union of India and others Vs. Coastal Container Transporters Association and others 2019 (2) TMI 1497 - SUPREME COURT the Hon ble Supreme Court held that where the case was neither of lack of jurisdiction nor any violation of principles of natural justice, the High Court ought not to have entertained the writ petition at the stage of notice, more so, when against the final orders, appeal lies to the Supreme Court. Further, the Court held that when there is a serious dispute concerning the classification of service, the respondents ought to have responded to the show cause notices by placing material in support of their stand. Accordingly, the appeals against the quashing of the show cause notices were allowed. In Mahanagar Telephone Nigam Ltd. Vs. Chairman Central Board, Direct Taxes and another 2004 (5) TMI 7 - SUPREME COURT , the Hon ble Supreme Court held that it was settled law that the litigation against show cause notices should not be encouraged. The Court approved the decision of the High Powered Committee, which was eminently fair and aimed at preventing frivolous litigation. The Court held that the appellant s right was not affected. It was clarified that the appellant could move a court of law against an appealable order. By not maintaining discipline and abiding by the decision, the appellant had wasted the public money and time of the courts. Petition dismissed.

Summary

Issues:
Violation of principles of natural justice due to alleged vagueness in the show cause notice.

Analysis:
The petitioners sought relief through a writ petition to quash an impugned show cause notice dated 07 December 2023 and the subsequent order dated 22 July 2024. The argument presented was that the show cause notice was vague, depriving the petitioners of an effective opportunity to respond or defend themselves, thus violating principles of natural justice or lacking jurisdiction. However, upon examination, the court found the show cause notice to be detailed and containing all material particulars necessary for the petitioners to understand the case against them. The petitioners' response to the notice was comprehensive, raising no serious grievance about vagueness. The court noted that the petitioners appeared to be attempting to circumvent the alternate remedy of appeal by challenging the show cause notice in the writ petition.

The court referenced legal precedents to emphasize that writ petitions challenging show cause notices should be entertained only in specific circumstances, such as fundamental rights enforcement, natural justice violations, lack of jurisdiction, or challenging the vires of the Act. In this case, the court concluded that the allegations of vagueness and violation of natural justice were misconceived, as the show cause notice was detailed, and the petitioners' reply was thorough, addressing all allegations. The court highlighted that the petitioners had not challenged the alleged vagueness earlier and only did so after the order was made, indicating an attempt to seek relief through the court rather than following the prescribed appeal process.

Moreover, the court emphasized that frivolous litigation against show cause notices should not be encouraged, and petitioners should exhaust alternate remedies before approaching the court. The court dismissed the petition, ordering the petitioners to pay exemplary costs, noting that such petitions were often filed to delay proceedings or avoid statutory requirements. The dismissal did not prevent the petitioners from utilizing statutory appeal remedies under the CGST Act.

In conclusion, the court dismissed the petition, emphasizing the importance of adhering to legal procedures, avoiding frivolous litigation, and utilizing appropriate remedies provided under the law.