K.M. Siddique Vs State of Kerala

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

The petitioner has approached this Court challenging Ext.P1 show cause notice, which has been issued under Section 74 of the Central Goods and Services Tax/State Goods and Services Tax Act, 2017 (CGST/SGST Act), principally on the ground that there is no material whatsoever or no assertion in the show cause notice which would justify the invocation of the extended period of limitation under Section 74 of the CGST/SGST Act.

2. The learned Senior Government Pleader appearing for respondent Nos. 1 and 2 and the learned Standing Counsel appearing for respondent No.3 would however contend that the question as to whether there was any material for the invocation of the extended period of limitation is also a matter that has to be adjudicated by the competent authority, and it is open to the petitioner to raise such contentions before the competent authority. It is submitted that no jurisdictional grounds have been made out for directly approaching this Court by filing a writ petition under Article 226 of the Constitution of India against a show cause notice.

3. Smt. Dhanya P. Ashokan, the learned Senior Counsel appearing for the petitioner on the instructions of Adv. M. R. Venugopal, has extensively referred to the show cause notice to contend that there is not even a whisper which would indicate that any ground relatable to Section 74 of the CGST/SGST Act has been alleged against the petitioner and therefore the question as to whether Section 74 could have been invoked is a jurisdictional fact and which can be adjudicated in a writ petition under Article 226 of the Constitution of India. The learned Senior Counsel appearing for the petitioner also submits that in terms of Ext.P2 circular, if there was any misstatement, suppression, etc. warranting the invocation of extended period of limitation, those matters were also to be set out in the show cause notice.

4. Having heard the learned Senior Counsel appearing for the petitioner, the learned Senior Government Pleader appearing for respondent Nos.1 and 2 and the learned Standing Counsel appearing for respondent No.3, I am of the opinion that this writ petition can be disposed of directing the 2^nd respondent to adjudicate the question as to whether there was any reason for invoking the extended period of limitation as a preliminary issue before proceeding further with the adjudication of the show cause notice. The learned Senior Government Pleader and the learned Standing Counsel for respondent No.3 are right in contending that the question as to whether there was any material to initiate proceedings under Section 74 of the CGST/SGST Act is essentially a question of fact that has to be determined at the first instance by the competent authority.

5. Accordingly, this writ petition will stand disposed of directing that if the petitioner was to file his reply to Ext.P1 show cause notice, also objecting to the invocation of the extended period of limitation, the question as to whether there was any reason to initiate proceedings under Section 74 of the CGST/SGST Act will be considered as a preliminary issue by the 2^nd respondent and an order shall be passed on that issue before proceeding further with the adjudication of Ext.P1 show cause notice. The petitioner shall file a reply to Ext.P1 show cause notice within a period of two weeks from the date or receipt of a certified copy of this judgment. The petitioner shall appear before the 2^nd respondent through authorised representative at 11.00 A.M on 04-10-2024, thereafter, the matter shall be adjudicated as directed above.