Kay Pan Sugandh Pvt ltd Vs Directorate General of GST Intelligence
Date-24th March 2022
Forum-Chattisgarh High Court

Sub-Whether writ lies against show cause notice ?

Though the above issue is no longer res integra as there are numerous decisions on this point, but the parties keep on trying their luck at the court to directly challenge Show cause notices under Article 226 of Constitution of India.

In this case , the petitioner challenged a show cause notice which was issued u/s 11(4) of the Central Excise Act read with Section 174 of the Chattisgarh Goods and services Act to challenge SCN which was issued where the allegation was that the petitioner misdeclared the maximum packing speed of the pan masala pouch making machines installed at his factory and thereby shortpaid central excise duty amounting to Rs 41.10 crores. It was argued by the petitioner that as the petitioner was liable to pay duty under the compounded levy scheme where the petitioner was required to pay duty on the basis of deemed manufacture of goods and not actual manufacture of goods, it was not liable for any further payment and several factual aspect of the matter were placed before the Court and thus the show cause notice was pleaded as bad in law. However, the court relying on various decisions of the Supreme Court, dismissed the Writ as pre-mature on grounds of alternate remedy.

Challenging Show Cause notice directly is always a tough task and unless the SCN is wholly without jurisdiction or palpably against the law, writ is seldom allowed.

Ramesh Patodia
26-03-2022