Route Mobile Limited v. Office Of Commissioner Gst And C.Ex Audit Iii

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1618 OF 2024 Route Mobile Ltd., Malad, Mumbai ] Through Mr. Rajdip Kumar Gupta ] .. Petitioner

Versus

1. Office of Commissioner, ] GST & C. Ex. Audit III, Parel, Mumbai ]

2. Office of Joint Commissioner, ] GST & C. Ex. Audit III, Parel, Mumbai ]

3. Office of Assistant Commissioner, ] Circle 1, CGST Audit III, Parel, Mumbai ]

4. Office of Commissioner, ] CGST, Andheri, Mumbai ]

5. Central Board of Indirect Taxes and Customs, ] Department of Revenue, New Delhi ] .. Respondents Mr. Rajat Bose (through V.C.) with Mr. Ankit Sachdeva, Mr. Rohit Iyengar and Ms. Madri Chandak, Advocates, i/by Shardul Amarchand Mangaldas & Co., for the Petitioner.

Mr. Subir Kumar with Mr. Abhishek Mishra, Mr. Abhinav Palsikar and Ms. Ashita Aggarwal, Advocates for Respondent Nos.1 and 2. Mr. S.D. Deshpande, Advocate for Respondent No.3. CORAM : A.S. CHANDURKAR & RAJESH S. PATIL, JJ DATE : 3RD DECEMBER 2024.

[ THROUGH HYBRID HEARING ] P.C. :

1.

Heard learned counsel for the parties.

2.

The challenge raised in this writ petition is to the show cause notice dated 21st December 2023 that has been issued by the Joint Commissioner, Goods and Service Tax and Commissioner of Excise, Audit-III, Mumbai 1/6

calling upon the petitioner to show cause why the amount of goods and service tax payable from July 2017 to March 2019 should not be recovered in terms of Section 74(1) of the Central Goods and Services Tax Act, 2017 along with interest in terms of Section 50(1) of the Act of 2017 along with penalty.

3.

Mr. Rajat Bose, the learned counsel for the petitioner submitted that initially on 21st April 2017, a show cause notice came to be issued to the petitioner calling upon the petitioner to show cause why the amount of service tax mentioned in the notice during the period from October 2012 to March 2016 should not be recovered. This show cause notice came to be adjudicated on 27th June 2018 and the demand as made was confirmed. Thereafter on 15th January 2019, another show cause notice was issued to the petitioner as to why the amount of service tax indicated in the said notice for the period from April 2016 to June 2017 should not be recovered. This show cause notice was adjudicated on 2nd December 2019 and the demand as made was confirmed.

amount of goods and service tax for the period from July 2017 to March 2018. All facts were available with the Department and such demand could have been made in the said show cause notices. Relying upon the judgment of the Supreme Court in Nizam Sugar Factory Vs. Collector of Central Excise, AP, 2006 (197) E.L.T. 465 as well as the judgment of the Co-ordinate Bench of this Court in The Commissioner of Central Excise, Mumbai-II Vs. Cona Industries and Ors., 2017 (352) E.L.T. 12 (Bom.), it was submitted that the subject show cause notice could not have been issued on the basis of facts that were within the knowledge of the Department. It was further submitted that there was no jurisdiction with the Joint Commissioner to extend the statutory period of adjudication and such power was conferred only on the Court under Section 75(2) of the Act of 2017. Since the period of adjudication had expired in December 2023, the show cause notices were liable to be quashed. 4.

Mr. Subir Kumar, learned counsel for the Department opposed the writ petition. He submitted that the challenge as raised to the show cause notice was premature. The petitioner ought to reply to the show cause notices and raise all defences available. The Joint Commissioner had the authority to issue the show cause notice and it was not the case of inherent lack of jurisdiction. It was further submitted that the earlier show cause notice pertained to the period prior to the goods and service tax era 3/6

that was introduced in the year 2017. The issue pertained to the liability to pay service tax on the services rendered and it would be necessary to adjudicate the show cause notices. Placing reliance on the decisions of the Supreme Court in Munshi Ram and Ors. Vs. Municipal Committee, Chheharta, (1979) 3 SCC 83 and Titaghur Paper Mills Co. Ltd. and Anr. Vs. State of Orissa and Ors., (1983) 2 SCC 433 as well as the judgment of the Co-ordinate Bench in Dow Chemical International Pvt. Ltd. Vs. Commissioner of Customs, NS-II, Special Investigation and Intelligence Branch (X) and Anr. (Civil Writ Petition No.11178 of 2024, decided on 21st October 2024), it was submitted that there was no case for interference at this stage. He thus submitted that the writ petition was liable to be dismissed.

5.

Having heard the learned counsel for the parties and having perused the documents on record, we are not inclined to entertain the writ petition on the ground that challenge has been raised only to the show cause notice dated 21st December 2023. The show cause notice states in paragraph 12 that the said notice seeks to consider service tax liability against the services received by the petitioner from outside India. In our view, various factual aspects referred to in the show cause notices are required to be answered by the petitioner to enable consideration of the same by the Adjudicating Authority. It is not the case that the Joint 4/6

Commissioner had no authority in law to issue the impugned show cause notice. The fact that there was an investigation initiated during the period from April 2018 to March 2019 on 18th September 2019, the impugned show cause notice requires adjudication.

6.

The issue with regard to the extension of the period of limitation and the legality of going into the issue of suppression of facts is required to be considered by the Adjudicating Authority. The decision in Nizam Sugar Factory (supra) indicates that after adjudication of the show cause notices, the challenge on merits was raised to that adjudication. In the present case, on the issuance of the show cause notice the petitioner has invoked the extra-ordinary jurisdiction of this Court. It is also to be noted that though the show cause notice is dated 21st December 2023, the challenge to the same is sought to be raised by filing this writ petition in February, 2024. In our view, the petitioner can raise all permissible defences including the challenge to the legality of the basis on which the impugned show cause notice has been issued. A similar view has been taken by the Co-ordinate Bench in Dow Chemical International Pvt. Ltd. (supra).

7.

In that view of the matter, we are not inclined to examine the challenge as raised to the issuance of the show cause notice. It would be open for the petitioner to reply to the show cause notice and raise all 5/6

permissible defences. By clarifying that the observations made in this order shall not come in the way of either the petitioner or the Adjudicating Authority and by keeping all challenges open, the writ petition is dismissed with no order as to costs.

[ RAJESH S. PATIL, J. ] [ A.S. CHANDURKAR, J. ] Digitally signed by SNEHA ABHAY DIXIT Date:

2024.12.09 16:57:47 +0530 6/6 SNEHA ABHAY DIXIT