Facts of the Case

  • Parties involved: The Petitioner is M/s Payel Enterprise, and the Respondents are the Deputy Commissioner of State Tax, Asansol Charge & Ors. representing the WBGST authority.
  • Background: The GST department had issued multiple impugned Show-Cause Notices (SCNs) to the petitioner concerning tax liabilities or discrepancies.
  • Petitioner's Action: Upon receiving the SCNs, the petitioner submitted comprehensive replies and representations addressing the allegations "long back".
  • The Grievance: Despite a significant passage of time since the replies were submitted, the respondent GST authorities failed to take any active steps to adjudicate, hold hearings, or conclude the proceedings.
  • Writ Jurisdiction: Aggrieved by the prolonged stagnation and administrative inertia, the petitioner approached the High Court of Calcutta by filing a cluster of four interconnected writ petitions: WPA 25861 of 2022, WPA 25863 of 2022, WPA 25869 of 2022, and WPA 25876 of 2022.

Issues Involved

  • Whether the prolonged inaction and failure of the WBGST/CGST authorities to finalise adjudication proceedings after the submission of replies violates the principles of natural justice and timely administrative justice.
  • Whether the High Court should invoke its extraordinary writ jurisdiction under Article 226 to issue a mandamus compelling the revenue authorities to dispose of pending show-cause notices within a definitive timeframe.

Petitioner’s Arguments

  • Unreasonable Delay: The learned advocates (Mr. Sandip Choraria and Mr. Rajarshi Chatterjee) argued that the petitioner had been highly cooperative and had submitted its detailed point-by-point replies to the impugned show-cause notices a long time ago.
  • Administrative Stagnation: It was contended that keeping tax adjudication proceedings pending indefinitely creates immense commercial uncertainty, financial strain, and mental agony for the taxpayer.
  • Demand for Mandamus: The petitioner prayed for a judicial direction to compel the WBGST authorities to execute their statutory duties by adjudicating the notices swiftly, granting a fair hearing, and concluding the matter via a speaking order.

Respondent’s Arguments

  • Representation: The State was represented by the learned Government Pleader, Mr. Anirban Ray, along with Md. T.M. Siddiqui and others.
  • No Vehement Opposition: The revenue authorities acknowledged the submission of the replies and did not strictly oppose the petitioner's request for an expedited, time-bound disposal of the matter.
  • Commitment to Due Process: The respondents indicated that the department would proceed with the final adjudication in accordance with the prescribed legal frameworks upon the court's direction.

Court Order / Findings

  • Consolidation of Petitions: The Single Bench of Hon’ble Justice Md. Nizamuddin took up all four writ petitions together due to the identical nature of the facts and relief sought.
  • Censure of Inaction: The Court took note of the circumstances and accepted that the statutory authorities must not sit on show-cause notices indefinitely once a taxpayer has submitted their reply.
  • Disposal with Directions: The Court disposed of all four writ petitions (WPA 25861, 25863, 25869, and 25876 of 2022) at the admission stage itself with explicit mandates directed at the GST authorities:
    • Expedite Proceedings: The respondent GST authority must immediately expedite the pending adjudication proceedings initiated under the SCNs.
    • Adherence to Law: The final order must be passed strictly in accordance with the law.
    • Principles of Natural Justice: The authority must afford a reasonable opportunity of personal hearing to the petitioner or its authorized representatives before arriving at a conclusion.
    • Reasoned and Speaking Order: The final decision cannot be arbitrary; it must be a fully reasoned and speaking order addressing the petitioner's submissions.
    • Strict Timeline: The entire exercise must be concluded expeditiously, preferably within a maximum period of two months from the date the order is communicated to the department.

Important Clarification

  • This judgment reinforces a vital taxpayer right: the right to speedy administrative justice. Show-cause notices cannot be left hanging like a sword over businesses indefinitely.
  • While the court did not quash the SCNs on merits, it established that revenue authorities are bound to issue a "reasoned and speaking order" within a tight frame (two months) once a matter is brought to light, preventing arbitrary, open-ended delays.

Section Involved

  • Section 73 and Section 74 of the Central Goods and Services Tax (CGST) Act, 2017 / West Bengal Goods and Services Tax (WBGST) Act, 2017: These sections govern the determination of tax unpaid, short paid, erroneously refunded, or input tax credit (ITC) wrongly availed or utilized.
  • Article 226 of the Constitution of India: The constitutional provision under which the petitioner filed the writ petitions seeking relief against administrative inaction.

Link to download the order - https://mytaxexpert.co.in/uploads/1782974346_279compressed.pdf

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