Facts of the Case

The petitioner, Kalyani E Mart, a partnership firm represented by its managing partner Sri Bibin Kumar, was earlier registered under the Kerala Value Added Tax regime and is now registered under the Central/Kerala Goods and Services Tax Act, 2017. Two connected writ petitions were filed before the High Court of Kerala. The Central GST authorities had issued pre-show cause intimations in Form GST DRC-01A dated 14.02.2022 for the tax years 2017-18 and 2018-19, to which the petitioner filed replies. Formal show cause notices dated 29.05.2023 followed, to which the petitioner also filed replies dated 13.07.2023. In W.P.(C) No.23760/2023, the petitioner sought a direction to the respondents to consider and dispose of its representations against the show cause notices; W.P.(C) No.10824/2022 raised a connected, earlier grievance on the same set of notices. Both petitions were heard and decided together by a single Judge.

Issues Involved

  1. Whether the State Tax Officer should be directed to adjudicate the pending show cause notices in Form GST DRC-01A after affording the petitioner an opportunity of hearing.
  2. Whether the petitioner's separate challenge to Section 16(4) of the CGST/SGST Act required adjudication in these proceedings.

Petitioner's Arguments

  • The petitioner had already filed detailed replies to both DRC-01A intimations and the subsequent show cause notices, and sought a direction that these representations be considered and disposed of by the authority.
  • Counsel for the petitioner expressly stated that the challenge to Section 16(4) of the CGST/SGST Act was not being pressed in the present proceedings, since the matter could be resolved through the ordinary adjudication process.
  • The petitioner sought expeditious adjudication of the show cause notices with a proper opportunity of hearing before any demand was confirmed.

Respondent's Arguments

  • The State GST Department, represented by the Government Pleader, did not oppose the limited relief sought and proceeded on the basis that the show cause notices would be adjudicated in the ordinary course after hearing the petitioner.
  • No specific objection was raised by the respondents to the petitioner's request for a hearing before adjudication of the pending notices.

Court Order/Findings

  • Considering that the petitioner had already filed replies to the show cause notices, the Court found it unnecessary to examine any further contentions on merits.
  • The Court disposed of both writ petitions with a direction to the 1st respondent to adjudicate the show cause notices strictly in accordance with law, expeditiously, after providing an opportunity of hearing, and directed that a hearing notice be issued to the petitioner for that purpose.
  • No finding was recorded on the merits of the tax dispute or on the Section 16(4) challenge, which was left open since it was not pressed.

Important Clarification

Where an assessee has already filed replies to a pre-show cause intimation in Form GST DRC-01A and the subsequent show cause notice, the High Court will typically decline to examine the merits of the dispute and will instead direct the adjudicating authority to complete the process expeditiously after affording a hearing. Constitutional or vires challenges, such as one to Section 16(4) of the CGST/SGST Act, can be kept open and left unpressed without prejudice, to be raised again if a live grievance later arises from the adjudication order itself.

Sections Involved

  • Section 16(4), CGST/SGST Act, 2017 — prescribes the time limit for availing input tax credit; its validity was raised but not pressed in these proceedings.
  • Form GST DRC-01A — the pre-show cause notice intimation procedure under the CGST Rules, 2017, meant to give a taxpayer advance notice of a proposed tax liability.

Decision – In Favour of

The petitions were disposed of with directions rather than on merits. To the extent the petitioner secured a binding direction for expeditious adjudication with a proper hearing, the outcome is procedurally favourable to the Assessee, but no finding was recorded on the tax liability itself or on the Section 16(4) challenge, which remains open. This should be read as a disposal with directions, not a decision on merits for either side.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) Nos.23760/2023 & 10824/2022
  • CNR: Not available
  • Coram: Justice Dinesh Kumar Singh
  • Decision Date: 20.11.2023
  • Disposal Nature: Disposed of with directions

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