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2024 DIGILAW 1446 (KER)

Roy A. S. , S/o. Skaria K. v. Union Of India

2024-11-07

GOPINATH P.

body2024
JUDGMENT : The petitioner has approached this court challenging Exts.P1 and P2 show cause notices issued to the petitioner under the provisions of Section 74 of the CGST/SGST Acts. The writ petition states that there was no just cause or reason to invoke the provisions of Section 74 of the CGST/SGST Acts in the facts of the present case. It is further submitted that the petitioner is running an 'educational institution' that is entitled to exemption from payment of GST. 2. The learned counsel for the petitioner vehemently submits that the question as to whether provisions of Section 74 of the CGST/SGST Acts can be invoked is a matter of jurisdiction that can be considered by this court in a writ petition under Article 226 of the Constitution of India. It is further submitted that the petitioner is running an educational institution, the question as to whether the show cause could have been issued (since the petitioner is entitled to exemption) is also a matter that can be considered by this court in a writ petition under Article 226 of the Constitution of India. The learned counsel appearing for the petitioner submits with reference to the judgment of a Division Bench of this Court in Prodair Air Products India Private Limited v. State of Kerala and Others; 2023 (3)KHC1 that where the controversy is purely legal and it does not involve any disputed questions of fact but only questions of law, then a challenge to the proceedings must ideally be decided by the High Court instead of dismissing the writ petition on the ground of availability of alternate remedy. The learned counsel for the petitioner also submits the requirements of fairness mandate that an Assessing Authority should apply its mind to various factors that influence an assessment and give a sufficient indication in the assessment order of having done so. It is submitted that where Assessing Authorities initiate proceedings in a mechanical manner without showing as to how the taxable event is attracted in a given case or without giving reasons for denying the claim of the assessee for exemption or deduction, the show cause notice itself is liable to be set aside as the issuance of the show cause notice is clearly without jurisdiction. 3. 3. The learned Government Pleader for respondents 2, 3 & 4 and the learned Standing Counsel for the 1st respondent would point out that Exts.P1 and P2 are only show cause notices and all contentions taken by the petitioner before this court can be taken before the authority and also that such contentions will be duly considered at the time of adjudication of the show cause notice. It is submitted that no ground has been made out for interference under Article 226 of the Constitution of India at this stage of proceedings. 4. Having the learned Government Pleader appearing for respondents 2 to 4 and the learned Standing Counsel appearing for the 1st respondent, I am of the view that no ground has been made out for interference with Exts.P1 and P2 show cause notices at this stage. The question as to whether the provisions of Section 74 of the CGST/SGST Acts could have been invoked in the case of the petitioner is a matter to be considered by the competent authority at the time of adjudication. Further the question as to whether the petitioner is exempt from the payment of GST is also a matter to be considered by the competent authority at the time of adjudication. I have no reason to believe that if such contentions are taken before the competent authority, such contentions would not be considered by the competent authority at the time of adjudication. I find no grounds made out for interference at this stage. In Prodair Air Products (supra) an order of assessment under the KVAT Act was under challenge before this Court. In the facts and circumstances of this case, I am clear in mind that the contentions taken by the petitioner indicate that the objection taken by the petitioner to the show cause notice is two fold. The petitioner contends that there was no circumstance for invoking Section 74 of the CGST/SGST Acts. It is clear that this question itself will involve the determination of certain questions of fact including the question as to whether there was any suppression etc. The second contention of the petitioner is that the petitioner is entitled to an exemption. A claim for exemption is to be asserted and proved before the competent authority. Therefore both these issues are not purely matters of law. The second contention of the petitioner is that the petitioner is entitled to an exemption. A claim for exemption is to be asserted and proved before the competent authority. Therefore both these issues are not purely matters of law. In Prodair Air Products (supra) this Court held:- “where the controversy is a purely legal one and it does not involve disputed questions of fact but only questions of law, then it should ideally be decided by the High Court instead of dismissing the writ petition on the ground of an alternate remedy being available. The need for upholding the rule of law would also mandate that the High Court decide the matter in situations where the exercise of statutory power does not conform, inter alia, to the requirements of fairness, non - arbitrariness and reasonableness and therefore falls foul of the culture of justification that is seen as a necessary and essential feature of administrative decision making” Considering the contentions taken by the petitioner I must hold that the issue is not a pure matter of law that it should be adjudicated at this stage itself by the High Court. If the contention of the petitioner is to be accepted every show cause notice issued under Section 74 of the CGST/SGST Acts could be challenged under Article 226. Further, as already indicated, I have no reason to believe that if the petitioner takes up the contentions now taken before this Court before the Adjudicating Authority, that authority will not consider such contentions and take a decision in the matter in accordance with the law. The writ petition fails and it is accordingly dismissed.