LI Network
Published on: November 30, 2023 at 12:32 IST
The Allahabad High Court emphasized that tax cases presenting undisputed facts, coupled with jurisdictional issues and violations of natural justice, may not find substantial benefit in being relegated to alternative authorities.
The court, comprised of Justice Saumitra Dayal Singh and Justice Shiv Shanker Prasad, opined that instances where essential statutory compliances have been met are typically referred to alternative forums for remedy.
The bench stated,
“Relegating the petitioner to the forum of alternative remedy in the face of undisputed facts noted above may be of no real use or purpose. The writ court regularly relegates petitioners specifically in tax matters, to the forum of the statutory remedy of appeal where minimum compliances of law have been made.
However, on lack of jurisdiction or violation of the principle of natural justice, the writ Court is equally inclined to offer interference to ensure due adherence to the rule of law both by the assessee as also the revenue authority.”
The case under consideration involved a petitioner issued a show-cause notice for the cancellation of GST registration, citing wrongful availment or utilization of input tax credit or tax refund.
The petitioner contended that a survey had been conducted by the DGGI, Delhi, and the case was still under investigation. The petitioner had also filed a writ petition before the High Court, requesting that the suspension be kept in abeyance due to the sub judice nature of the matter.
Despite the ongoing investigation, the GST Authority retrospectively canceled the petitioner’s registration from the date of the show-cause notice.
The court noted that the order lacked specificity, as it did not mention any violation of statutory requirements.
The court underscored the importance of factual allegations in the show-cause notice and observed that the vagueness of the petitioner’s reply may be inconsequential unless the notice made specific fact allegations.
Recognizing the severe consequences of registration cancellation on a business entity, the court directed that the suspension of the petitioner’s registration would remain in force for one month.
During this period, the respondent authority was instructed to issue a fresh show-cause notice for the cancellation of registration, providing specific details and grounds.
Case title: Hindustan Paper Machinery Industries v. Commissioner CGST and 2 Others