Facts of the Case

The petitioner, M/s. Shree Binayak Textiles, filed W.P.(C) No.27265 of 2023 before the High Court of Orissa at Cuttack against the Commissioner of CT & GST, Odisha and other opposite parties, represented by Mr. K.K. Sahoo, Advocate. The petitioner challenged a show-cause notice dated 23 August 2022 issued under Annexure-7, invoking the writ jurisdiction of the Court instead of responding to the notice through the departmental process. The CT & GST Organization appeared through its Standing Counsel, Mr. Sunil Mishra. The matter was taken up through hybrid mode and heard on 4 December 2023. During the hearing, the Standing Counsel for the Department informed the Court that, in the interim, the concerned adjudicating authority had already passed a final order, which was itself an appealable order under the CT & GST framework. This development meant that the petitioner's original grievance against the show-cause notice had, in effect, been overtaken by subsequent adjudication.

The show-cause notice under Annexure-7 formed part of a wider pattern of proceedings initiated by the CT & GST Organization against registered dealers across Odisha during this period, and the present matter illustrates how the pendency of a writ challenge to a show-cause notice can be overtaken by subsequent events once the departmental adjudication runs its course. By the time the writ petition came up for final hearing, the factual landscape had already shifted from the show-cause stage to the post-adjudication stage, which materially affected the relief the Court was prepared to grant.

Issues Involved

  1. Whether a writ petition challenging a show-cause notice ought to be entertained once a final adjudication order, itself appealable, has been passed by the competent authority.
  2. Whether the petitioner should instead be relegated to filing a statutory appeal against the final order.

Petitioner's Arguments

  • Challenged the show-cause notice dated 23 August 2022 (Annexure-7) directly by way of writ petition, without first submitting a reply before the adjudicating authority.
  • Sought intervention of the High Court at the pre-adjudication/show-cause stage of the proceedings.

Respondent's Arguments

  • Mr. Sunil Mishra, learned Standing Counsel for the CT & GST Organization, submitted that a final order had, in the meantime, already been passed by the concerned authority.
  • Pointed out that the said final order was appealable, and hence the petitioner had an efficacious alternative remedy available under the statute.

Court Order/Findings

  • The Court noted that with the final order already having been passed, the challenge to the mere show-cause notice had lost its practical utility, and declined to entertain the writ petition at that stage.
  • Operative direction: liberty was granted to the petitioner to pursue its remedy before the appropriate forum by giving a reply to the show-cause proceedings, and further, liberty was granted to prefer an appeal before the appellate authority against the final order.
  • No costs were imposed, and the writ petition was disposed of on these terms, leaving all contentions open to be raised before the departmental/appellate forum.

Important Clarification

Where a final adjudication order has already been passed by the time a writ petition challenging the anterior show-cause notice comes up for hearing, a High Court will ordinarily decline to entertain the writ and instead direct the assessee to avail of the statutory appellate remedy against the final order, since the appellate forum is best suited to examine the merits of the adjudication in the first instance.

This approach avoids parallel or duplicative litigation on the same subject matter at two different stages of the same proceeding, and ensures that the assessee's substantive grievances regarding the correctness of the tax demand are examined by the appellate authority, which is best placed to weigh both the departmental record and the assessee's response on merits.

Sections Involved

  • Odisha Goods and Services Tax Act, 2017 / Central Goods and Services Tax Act, 2017 – provisions governing show-cause notice, adjudication and appeal.
  • Article 226 of the Constitution of India, 1950 – writ jurisdiction invoked against the show-cause notice.

Decision – In Favour of

The order is broadly in favour of the Department's procedural position, since the Court declined to interfere with the show-cause/adjudication process at the writ stage. However, the petitioner retains a full opportunity to contest the matter on merits by filing a statutory appeal, so the final outcome on the substantive dispute remains open.

Related Case Laws

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

Case Details

  • Court: High Court of Orissa at Cuttack
  • Case No.: W.P.(C) No.27265 of 2023
  • CNR: Not available
  • Coram: Acting Chief Justice Dr. B.R. Sarangi and Justice Murahari Sri Raman
  • Decision Date: 4 December 2023
  • Disposal Nature: Writ petition disposed of, liberty granted to prefer appeal

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