High Court · 2025 on 14 May 2025

Judgment

1. This writ petition has been filed by the petitioner aggrieved of the impugned demand order and show cause notice dated

07.02.2025 and 05.12.2024 respectively for the period April 2020 to March 2021 issued/passed under Section 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 (for short, 'the Act') and a restraint against the respondents from resorting to any coercive measure against the petitioner pursuant to the impugned notice.

2. The extra ordinary jurisdiction of this Court has been invoked based on the plea that though the notice has been issued under Section 74 of the Act, which can only be founded on the ground that the tax has not been paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilful misstatement or suppression of facts. The reason of fraud/wilful misstatement/suppression of facts are sine qua non for invoking the extended period of limitation under Section 74 of the Act. However, none of the said ingredients have been alleged in the show cause notice and, therefore, for lack of jurisdictional foundation, the show cause notice and consequential order is bad in law.

4. Further submissions have been made that the petitioner though demanded certified copy of the SIB report by filing application dated 13.01.2025 and also specifically mentioned the 2 said aspect in its partial reply to the show cause notice filed, while quoting the reply in the final order, the said part has not even been indicated and dealt with, which vitiates the entire determination made by the respondents and, therefore, the order requires interference by this Court. Reliance has been placed on Raj Bahadur Narain Singh Sugar Mills Ltd. Vs. Union of India and others: (1997) 6 SCC 81, Gopal Zarda Udyog and others Vs. Commissioner of Central Excise, New Delhi: (2005) 8 SCC 157 & Hel Infotech Ltd. Vs. Commissioner Commercial Tax and another: Writ Tax No. 1396 of 2024 decided on 27.09.2024.

Learned counsel for the respondent raised preliminary objection pertaining to maintainability of the writ petition. Submissions have been made that the petitioner has alternative remedy of filing appeal against the order impugned under Section 107 of the Act. The issues though are projected as legal, the same involve examination of the facts in minute details inasmuch as the adjudicating authority has thoroughly examined the material and has come to a conclusion pertaining to fraud/wilful misstatement/suppression of facts.

6. Submissions have been made that the petitioner filed replies dated

17.01.2025, 31.01.2025, 06.02.2025 & 07.02.2025, raising several issues and contesting the matters on merits, which has been exhaustively dealt with by the adjudicating authority and, therefore, the plea now raised by the petitioner, apparently has no substance and the petition deserves dismissal.

7. We have considered the submissions made by learned counsel for the parties and have perused the material available on record.

8. The show cause notice dated 05.12.2024 (Annexure-7), inter alia, in the opening paragraphs, alleges as under: "आपके ऑनलाइन खरीद-बि(cid:16)्ቅी सम्(cid:16)न्धी आकड़ों के बि(cid:24)्ቨेषण पर पाया गया बिक उनके ्ቛारा पंजीयन ति#थि% 28.08.2018 से जांच ति#थि% 29.07.2021 #क कु ल रुपये 728.44 लाख मूल्य के करयोग्य आयरन शीट की खरीद बिकया जाना घोबिष# है। उ्ሹ अ(cid:24)तिध में रुपये 1960.53 लाख मूल्य के करमु्ሹ माल की बि(cid:16)्ቅी ए(cid:24)ं रुपये 1628.10 लाख मूल्य के करमु्ሹ माल 3 की खरीद घोबिष# है। आप ्ቛारा आयरन स््ቅै प की बि(cid:16)ना कोई खरीद बिकये ही रुपये 605.68 लाख मूल्य के आयरन स््ቅै प की बि(cid:16)्ቅी घोबिष# है। उ्ሹ #थ्यों से ्ቚा%बिमक बिनष्कष> ्ቚा्቎ हो#ा है बिक आप ्ቛारा आयरन स््ቅै प की बि(cid:16)्ቅी बि(cid:16)ना खरीद बिकये ही घोबिष# की जा रही है। उ्ሹ ्ቚति#कू ल #थ्यों के आधार पर फम> की जांच बिदनांक 29.07.2021 को की गयी। ्ቚ्቞ग# फम> ्ቛारा जांच पंचनामा में अ(cid:24)ग# कराया गया बिक आप ्ቛारा आयरन शीट की खरीद कर हैरो तिBस्क का बिनमा>ण कर बि(cid:16)्ቅी #%ा शेष (cid:16)चे आयरन स््ቅै प में से स्टैम्प्B आ቏ኌटकल्स ऑफ आयरन का बिनमा>ण कर बि(cid:16)्ቅी #%ा उससे (cid:16)चे आयरन स््ቅै प की बि(cid:16)्ቅी व्यापारिरयों को करने का काय> व्यापार बिकया जाना (cid:16)#ाया गया। आप ्ቛारा पंजीयन ति#थि% से लेकर बि(cid:24)्ቈीय (cid:24)ष> 2021-22 #क कारिर# कराप(cid:24)ंचन को बिनम्न ्ቚकार से बिनधा>रिर# बिकया गया हैः-"

9. A perusal of above would reveal that specific allegations have been made on supplies being made without purchasing any goods and specific allegations pertaining to evasion of tax have been made along with specific allegations and details for the period of issuing the notice under Section 74 of the Act. No doubt it is necessary that there must be an element of fraud/wilful misstatement/suppression of facts, the same must be apparrent from the allegations made in the show cause notice, it is not necessary that the specific words as used in the section have to be reproduced/allegations be made by using the words indicated in the provision, for bringing the case within the parameters prescribed under the provisions of Section 74 of the Act.

10. As noticed herein before, the allegations made in the show cause notice falls within the parameters of Section 74 of the Act and, therefore, the plea sought to be raised in this regard cannot be countenanced.

11. So far as plea raised pertaining to the supply of the SIB report and allegedly not quoting the part of the reply to the show cause notice wherein the application demanding the SIB report was annexed, as to whether there has been a prejudice on account of the same, essentially requires determination on merits as mere non supply of a particular document unless the same is prejudicial to the petitioner affecting his right to defend the show cause notice by itself cannot vitiate the order impugned. 4

12. So far as the judgements cited by learned counsel for the petitioner are concerned, the same apparently have no application to the present case. In the case of Raj Bahadur Narain Singh Sugar Mills Ltd. (supra), the Court came to the conclusion that the notices in the said case failed to refer to any of the acts of commission or ommission enumerated in the relevant proviso to Rule 10 of the Central Excise Rules, 1944, which as noticed herein before is not the case here. Similarly in the case of Gopal Zarda Udyog (supra), the issue pertained to dispute pertaining to classification of goods, which is not the case here and in the case of Hel Infotech Ltd. (supra), a coordinate Bench of this Court, came to the conclusion that the allegations of availing or utilizing input tax credit due to fraud/wilful misstatement/suppression of facts was not spelled out in the show cause notice which is not the case here, as observed herein.

13. Learned counsel for the petitioner attempted to make submissions on the merit of the determination made, which attempt cannot be countenanced as the petitioner indeed has a remedy of appeal under Section 107 of the Act.

14. Consequently, we do not find any reason to entertain the present writ petition in exercise of extra ordinary jurisdiction under Article 226 of the Constitution of India. The writ petition is, therefore, dismissed leaving it open for the petitioner to avail remedy of appeal in accordance with law.

15. We make it clear that the observations made herein have been made with a view to examine the maintainability of the writ petition and none of the observations shall come in the way of the petitioner in raising any of the issues before the Appellate Authority. Order Date :- 14.5.2025 Sandeep (Kshitij Shailendra, J) (Arun Bhansali, CJ) SANDEEP KUMAR High Court of Judicature at Allahabad