2021 (7) TMI 1358 - HC - VAT and Sales Tax

Validity of SCN - Notice challenged on the limited ground that it was issued with prejudged and foreclosed mind - HELD THAT - No writ against a show-cause notice is entertainable. The writ against the show-cause notice needs to be entertained only if the said show-cause notice is issued by the incompetent Authorities having no jurisdiction or an allegation of malafides are raised and in such an event the authority against whom such an allegation is raised shall be impleaded as a party respondent in its personal capacity in writ proceedings. Thus in all circumstances show-cause notices issued are to be responded and the authorities are bound to consider the objections explanations and documents and thereafter take a decision and pass orders by affording the opportunity to the assessees concerned - This being the procedures to be followed at the stage of show-cause notice the petitioner cannot be construed as aggrieved person as far as the merits involved in the allegations. This Court cannot undertake the process of adjudication of disputed facts on merits. Such an exercise is to be done by the Authorities Competent based on the documents and evidences available. The power of judicial review under Article 226 of the Constitution of India scrutinize the processes through which a decision is taken by the Authorities in consonance with the provisions of the statutes and the Rules but not the decision itself - this Court is of an opinion that the petitioner has not raised any acceptable ground regarding the jurisdiction and malafides. Thus the petitioner has to respond to the impugned showcause notice by filing their objections and materials if any and in the event of receiving the said objections the respondents are bound to consider the same by providing an opportunity to the petitioner and take a decision and pass final orders on merits and in accordance with law as expeditiously as possible. Petition disposed off.

Summary

Issues:
Challenge to impugned order issued in proceedings dated 30.08.2012 regarding TNVAT Act and CST for the period 2008-09 to 2011-12 based on incomplete and incorrect returns filed by M/s.ATC India Tower Corporation Private Limited.

Analysis:

1. The petitioner, a registered dealer under TNVAT Act and CST, challenged a notice issued for the period 2008-09 to 2011-12, alleging it was issued with a prejudged and foreclosed mind. The revised notice pointed out that the petitioner had filed incomplete and incorrect returns, failing to disclose taxable turnover and tax liability. The respondents provided a final opportunity for the petitioner to submit objections within 15 days upon receiving the notice, indicating the revised notice aimed to allow the petitioner to address the factual inferences found by the authorities.

2. The court emphasized that no writ against a show-cause notice is maintainable unless issued by incompetent authorities lacking jurisdiction or if malafides are alleged. In such cases, the authority facing allegations must be made a party respondent. Show-cause notices must be responded to, and authorities must consider objections, explanations, and documents before making a decision. The petitioner, at the show-cause notice stage, cannot be considered an aggrieved party concerning the merits of the allegations.

3. The court clarified its role, stating that it cannot adjudicate disputed facts on merits, which is the responsibility of competent authorities based on available documents and evidence. Judicial review under Article 226 of the Constitution focuses on scrutinizing decision-making processes, not the decisions themselves. Therefore, the court cannot adjudicate on the merits raised in the writ petition, emphasizing that the petitioner must submit all objections and grounds to the respondent for due consideration.

4. Concluding, the court held that the petitioner failed to raise acceptable grounds regarding jurisdiction and malafides. The petitioner was directed to respond to the show-cause notice by submitting objections and materials for the respondents' consideration. The authorities were mandated to make a decision and pass final orders expeditiously in accordance with the law. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed.