Whether Writ Petition is maintainable against SCN issued under Section 74 alleging suppression

No, the Honorable High Court of Rajasthan in the case of Power And Instrumentation (Guj) Ltd V. The Additional Commissioner Of Cgst And CE, Cgst Commissionerate, Udaipur, Rajasthan D.B. Civil Writ Petition No. 7766/2024 dated 08.07.2024 disposed of the writ petition filed challenging SCN issued under Section 74 of the Act alleging suppression. The Honorable Court noted that the earlier order dated 25.07.2023, which initially restricted the respondents to proceed under Section 73, was modified by the order dated 24.04.2024. The modification granted liberty to the respondents to proceed under any provision of the CGST Act, not just Section 73.

The Honorable Court clarified that the liberty given to proceed under the Act included powers under various provisions of the Act and was not limited to Section 73 alone. The Honorable Court observed that the challenge to the show cause notice under Section 74 on the grounds of it being issued contrary to the Court’s orders was not sustainable. Further, the Honorable Court deemed the petitioner’s argument that the case does not involve suppression or concealment, and thus should not fall under Section 74, as premature. The notice issued under Section 74 was based on prima facie considerations of suppression. The Honorable Court decided that this issue of fact should be addressed through the reply to the notice rather than by a preemptive judicial intervention. The Honorable Court directed that the petitioner should file a reply to the show cause notice within 30 days. The authority must consider the reply with due application of mind and proceed in accordance with the law.

Author’s Comments
To approach the High Court, it must be shown (to the court) that the notice:
(a) deserves intervention of the court to stop the march of injustice;
(b) remedy necessary, cannot be allowed in adjudication or in appeal.

Taxpayers must consider that High Courts, being Courts of Equity, are free to admit a petition seeking relief that alleviates the injustice meted out in the notice after considering that the remedies of adjudication and appeals in the law are not ‘efficacious’ enough to ensure that injustice is not done. The Central issue involved in the petition must not be something that takes deep, incisive, and prolonged investigation to locate. Injustice must jump out of the pages to demonstrate the ‘maintainability’ of the petition and no other forum is empowered to allow relief required to redress injustice exposed in the petition. Petition cannot require the High Court to adjudicate. Petition must seek the High Court’s intervention on the ‘grounds urged’ to pass such orders as the Court may consider expedient to prevent miscarriage of justice by misapplication, misinterpretation, and misuse of process of law.