Maya Appliances (P.) LTD. VS Assistant Commissioner, Circle 8, Chennai

In the Writ Petition under consideration, the petitioner challenges a show cause notice dated 11th June 2021, which requires a response within 30 days. The petitioner operates as a manufacturer and supplier of various household appliances including LPG stoves, wet grinders, juicers, salad makers, and mixer grinders. They are registered under the Goods and Services Tax (GST) regime and are in full compliance with relevant tax laws, including the Central Goods and Services Tax Act, 2017, and its associated rules, as well as the Tamil Nadu Goods and Services Tax Act, 2017, and its rules.

The petitioner’s counsel argues that similar issues are already pending in other writ petitions, notably one where the Madras High Court set aside an order and remanded it for fresh consideration. They contend that this precedent warrants admission of the present petition. Additionally, the petitioner’s counsel cites interim orders from the High Court of Andhra Pradesh in support of their argument. However, the court deems these interim orders insufficient as precedent for admitting the current petition.

The petitioner has raised several grounds, both on merit and principle, in elaborate detail. However, the court declines to adjudicate on these issues in the present writ petition, noting that the relief sought is specific to quashing the show cause notice issued by the first respondent. The court asserts that factual issues must be adjudicated by the competent authority based on available documents and evidence, as the High Court cannot delve into such matters in a writ proceeding.

The court emphasizes that writ petitions against show cause notices should not be entertained routinely. Such petitions should only be considered if it’s proven that the authority issuing the notice lacks jurisdiction under the relevant statute or rules, or if allegations of malfeasance are raised against the concerned official. Even in cases where malfeasance is alleged, the official in question must be included as a party respondent in their personal capacity in the writ proceedings. Therefore, factual grounds or mixed questions of law and fact should be fully adjudicated by the competent authority. Writs may only be entertained if the incompetence of the authority is established through statutory provisions, and not otherwise.

The trend of challenging jurisdiction along with facts is increasing, but the court cannot encourage such grounds as they require thorough examination based on merits. Even if jurisdictional issues are raised, and they involve factual adjudication, the matter should be referred to the competent authority and then to the appellate authority for complete resolution of disputed facts. The court warns against adjudicating disputed facts based solely on affidavits or selective document copies filed with the writ petition, as such piecemeal adjudication is risky and may lead to errors or allow some individuals to evade legal consequences.

It’s preferable for competent authorities and appellate bodies to conduct adjudication on merits, as they are the final fact-finding authorities. This assists the High Court in exercising its powers of judicial review under Article 226 of the Indian Constitution.

The power of judicial review aims to scrutinize the processes through which jurisdiction is exercised by competent authorities in accordance with the law, rather than the decisions themselves. Therefore, courts exercise restraint in entertaining writ petitions against show cause notices.

In the present case, the contested show cause notice outlines all the allegations in detail. The petitioner is given the opportunity to present their representations, defenses, or supporting documents to counter the allegations. Therefore, it’s incumbent upon the petitioner to defend their case before the competent authority by submitting their explanations or defense statements. Subsequently, the authorities are obligated to consider the materials available on record, as well as the grounds raised by the petitioner in their defense statement, before making a decision. This decision must be accompanied by a detailed explanation of the reasons behind it.

Following these procedural steps, the petitioner has the freedom to submit their explanations or defense statements, along with any relevant documents or evidence, as requested in the contested show cause notice. This ensures that the petitioner has a fair opportunity to present their side of the case and engage in the adjudicative process as per the established legal procedures.

Based on the principles outlined, the court concludes that the writ petitioner has not presented any valid grounds to warrant the entertaining of the writ petition. Consequently, the court dismisses the writ petition without imposing any costs. Additionally, the connected Miscellaneous Petition is closed as a result of this decision. This ruling signifies that the petitioner has failed to establish sufficient justification for the court to proceed with their petition, leading to its dismissal.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case Law: