Safset Agencies Pvt. Ltd. Vs Union of India & Others
Date: January 8, 2025
Subject Matter
No intervention at the stage of the show cause notice
Summary
The given Writ Petition challenges a show cause notice dated 6th August 2024, issued to the Petitioner by GST authorities. The Petitioner contends that the notice is an attempt to invalidate an Advance Ruling previously given in their favor by the Appellate Authority on 7th October 2019. The Respondents (GST authorities) argue that the show cause notice pertains to the 5% discount provided by the Petitioner to the owner of the goods, which they classify as a taxable supply of service, contrary to the Petitioner’s claims. They highlight an admission from the Petitioner during an investigation that supports their position. After hearing arguments from both parties, the court decides not to intervene at the stage of the show cause notice. It expresses that it will be up to the authorities to determine whether the notice conflicts with the previous Advance Ruling and to assess what tax is due. The court provides procedural directions allowing the Petitioner four weeks to submit a reply to the show cause notice, with an order for the authorities to adjudicate the notice within twelve weeks. The petition is disposed of without any costs, with the implication that all contentions can still be raised before the respective authorities during the upcoming proceedings. The hearing has been deferred, allowing the Petitioner to prepare their response.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. The above Writ Petition is filed seeking the appropriate writ or order or direction to quash and set aside the impugned show cause notice dated 6th August, 2024.
2. The case of the Petitioner is that by the impugned show cause notice, the authorities are seeking to go beyond the Advance Ruling already given in favour of the Petitioner by the Appellate Authority vide its Order dated 7th October, 2019.
3. Per contra, it is the case of the Respondents that the show cause notice issued to the Petitioner has got nothing to do with the Advance It is their case that the 5% so called discount being given by the Petitioner to the owner, is nothing but a supply of service and is to be taxed accordingly.
4. It is also the case of the authorities that there is an admission on the part of the Petitioner (during course of investigation) that the 5% margin recovered by the Petitioner from the owner of the goods is a service provided to the owner.
5. After hearing Nankani, the learned Senior Advocate appearing on behalf of the Petitioner as well as Mr. Mishra, the learned Counsel appearing on behalf of the Respondent, we are of the view that this is certainly not a fit case where we should interfere at the show cause notice stage. Whether the show cause notice, in fact, seeks to do something which is also ruled upon in the Advance Ruling order, or otherwise, is something that the authorities will have to decide whilst adjudicating the show cause notice. Further, what tax has to be paid by the Petitioner and at what rate, will also have to be decided whilst adjudicating the show cause notice. At this stage, we are not inclined to interfere with the issuance of show cause notice and the Petitioner will have to face the same.
6. Keeping all contentions of the parties open, to be agitated before the authority, we dispose of the above Writ No order as to costs.
7. At this stage, Nankani, the learned Senior Advocate states that the hearing before the authorities has been kept tomorrow i.e. 10th January, 2025. Hence, the hearing be deferred and liberty be granted to the Petitioner to file a Reply/ Representation to the show cause notice.
8. Considering the aforesaid request, we direct that the Petitioner shall file its Reply/ Representation to the show cause notice within a period of four weeks from today and the show cause notice shall be adjudicated within a period of twelve weeks from today.
9. This order will be digitally signed by the Private Secretary/ Personal Assistant of this All concerned will act on production by fax or email of a digitally signed copy of this order.