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TMI Blog2024 (12) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... such context that the provisions of Section 16 pertaining to audit of all receipts which are payable into the Consolidated Fund of India and each State and of each Union Territory is required to be construed with respect to the accounts maintained in the Government departments / Corporations belonging to the Government. The impugned show cause notice is not based upon any audit undertaken by CERA/CAG and the CERA/CAG has undertaken no audit of the Petitioner, there is no necessity to go into the issue of whether the impugned show cause notice could be quashed or the writ of prohibition could be issued to the Respondents from proceeding any further in this matter. The argument about the impugned show cause notice being issued with a pre-determined mindset is also entirely misconceived. By simply making an allegation of this nature without any concrete or serious material to support the same, the show cause notice cannot be questioned. A show cause notice, which only records a prima facie opinion, is not like a judgment or an order made after the completion of the adjudication proceedings. Therefore, the contention that the documents submitted by the Petitioner or the explanation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the impugned show causes notice was issued with a pre-determined mindset . He submitted that all the documents placed on record by the Petitioner or of the explanation offered by the Petitioner were not considered before issuing the impugned show cause notice. Accordingly, he submitted that the impugned show cause notice is ex-facie illegal, untenable and unsustainable. 6. Mr Sridharan finally submitted that the extended limitation period was wrongly invoked in the present case. He submitted that this was not a case of suppression, and the allegations in the impugned show cause notice are cursory backed by no material. He submitted that since the impugned show cause notice was issued beyond the prescribed period of limitation and since the parameter necessary for invoking the extended period of limitation was unavailable, the impugned show cause notice was ex-facie without jurisdiction and warrants interference. He relied on Akhila Sujith Vs Income Tax Officer, International Tax Ward-4(2), Mumbai ors. 2024 (9) TMI 152 Bombay High Court. 7. For all the above reasons, Mr. Sridharan submitted that the impugned show cause notice may be set aside and that the Respondents be restraine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the decision in Kiran Gems Private Limited (supra) was not at all attracted. He submitted that the decision was challenged before the Hon ble Supreme Court, and leave was already granted. 13. The rival contentions now fall for our determination. 14. The main challenge in this Petition is based on the Petitioner s interpretation of this Court s decision in Kiran Gems Private Limited (supra). Mr Sridharan submitted that the impugned show cause notice is entirely based on the observations of the CERA audit, functioning under the control of CAG. He submitted that Kiran Gems Private Limited (supra), has already held that CERA or CAG has no authority or jurisdiction to audit private companies like the Petitioner. Therefore, he submitted that the impugned show cause notice, based entirely on CERA/CAG s audit report, is without jurisdiction, ultra vires, null and void. 15. The above premise is entirely misplaced in the facts of the present case. The record explicitly shows that the CERA/CAG never audited the Petitioner Company, as in Kiran Gems Private Limited (supra). The argument is based on a misconstruction or misappreciation of the facts and the ratio in Kiran Gems Private Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry is required to be construed with respect to the accounts maintained in the Government departments / Corporations belonging to the Government. 20. This is precisely what the CERA/CAG has done in the present case by auditing the accounts of the Respondents department, which is admittedly the department of the Union of India. As noted earlier, this is not a case where any notice was issued to the Petitioner and based upon such notice, the Petitioner was audited. Merely because the returns filed by the Petitioner before the Respondents department may have been examined in the context of an audit of the Respondents department does not mean that the CERA/CAG has audited the Petitioner or the Petitioner s accounts. 21. If the Petitioner s argument is stretched to this extent, then CERA/CAG would be disabled from exercising its statutory functions. The Revenue Department of the Union or State deals with cases of individuals and companies who file returns. Suppose the CERA/CAG finds discrepancies or irregularities in such returns chosen for scrutiny. In that case, the Respondents department cannot be disabled from initiating action simply because CERA/CAG may have pointed out such discre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CAG of all receipts payable to the Consolidated Fund of India and of States and Union Territories having a legislative assembly. 24. The Respondent s affidavit states that CAG has neither directly nor indirectly conducted any audit on the records of the Petitioner nor have they visited the Petitioner s offices for conducting the audit. CAG had merely asked the department to submit the relevant documents for their study and analysis with respect to revenue realized from the Petitioner and then noticed the discrepancies. The affidavit states that the impugned show cause notice has been issued by the proper officer empowered to issue such show cause notice under CGST Act, 2017. 25. Since, in this case, we are satisfied that the impugned show cause notice is not based upon any audit undertaken by CERA/CAG and the CERA/CAG has undertaken no audit of the Petitioner, there is no necessity to go into the issue of whether the impugned show cause notice could be quashed or the writ of prohibition could be issued to the Respondents from proceeding any further in this matter. Though we do not propose to decide on this issue because, in this case, the CERA/CAG did not audit the Petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereunder to arrive at a prima facie opinion for issuance of show cause notice. This is reflected in the impugned show cause notice itself, including paragraphs 5 and 6, where there is a reference to the Petitioner s reply, audit observations and their analysis. 31. The argument about the impugned show cause notice being issued with a pre-determined mindset is also entirely misconceived. By simply making an allegation of this nature without any concrete or serious material to support the same, the show cause notice cannot be questioned. A show cause notice, which only records a prima facie opinion, is not like a judgment or an order made after the completion of the adjudication proceedings. Therefore, the contention that the documents submitted by the Petitioner or the explanation offered by the Petitioner have not been considered is misconceived and based upon the same, no case is made out to quash the impugned show cause notice. 32. There is also no infirmity in invoking the extended period of limitation. It is not as if no allegations of suppression or non-declaration were made in the show cause notice. Such allegations are contained in paragraphs 12 and 12.2 of the show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no case is made to entertain this Petition challenging the impugned show-cause notice. 36. In Whirlpool Corporation Vs Registrar of Trade Marks, Mumbai and others (1998) 8 SCC 1 the Hon ble Supreme Court has held that existence of alternative statutory remedies may not be a constitutional bar to the High Court s jurisdiction but is a self-imposed restriction. The Court held that this restriction of exhaustion of alternate remedies would not operate as a bar, (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is violation of principles of natural justice; or (iii) where the order or the proceedings are wholly without jurisdiction, or the vires of an Act is challenged. Here, none of the three contingencies are made out by the Petitioner. The Petitioner is merely attempting to take a chance to see that the adjudication proceedings pursuant to the impugned show cause notice are either stalled or delayed. 37. Considering the above facts, circumstances, and the law on the subject, we are satisfied that no case has been made to entertain this Petition. Accordingly, this Petition is liable to be dismissed and is hereby dismissed with cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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