Writ petition against Show Cause Notice dismissed as premature; Adjudication must precede Writ

Issue

Whether a Writ Petition under Article 226 of the Constitution is maintainable against a Show Cause Notice (SCN) issued under Section 73 of the GST Act, or if the petitioner must first exhaust the alternative statutory remedy of participating in the adjudication process.

Facts

The Demand: The Department issued a Show Cause Notice to the petitioner proposing the recovery of wrongly availed Input Tax Credit (ITC) amounting to approximately Rs. 0.11 lakhs, along with applicable interest and penalty.
The Process: The notice called upon the petitioner to show cause as to why the demand should not be confirmed, effectively initiating the adjudication process under the GST enactments.
The Challenge: Instead of filing a reply to the SCN, the petitioner invoked the writ jurisdiction of the High Court to challenge the notice at the pre-adjudication stage.

Decision

Premature Challenge: The High Court held that a writ challenge at the stage of a Show Cause Notice is premature. The GST Act provides a complete machinery for adjudication (Section 73/74) and subsequent appeals (Section 107).
Alternative Remedy: The Court noted that the petitioner has an effective statutory remedy available: to file a reply to the SCN and participate in the personal hearing. The petitioner is not precluded from raising all legal and factual contentions before the Adjudicating Authority.
No Opinion on Merits: The Court clarified that it was not expressing any opinion on the merits of the case (i.e., whether the ITC was actually wrongly availed).
Ruling: The challenge to the Show Cause Notice was rejected. The Writ Petition was dismissed with liberty granted to the petitioner to file a reply and participate in the adjudication proceedings.

Key Takeaways

SCN is just a Proposal: A Show Cause Notice is merely a proposal of demand, not a final order. Courts generally do not interfere at this stage unless the notice is issued without jurisdiction or is palpably time-barred.

Exhaust Statutory Remedies: High Courts rarely entertain writs if you haven’t first utilized the remedies provided within the tax law (i.e., filing a reply, attending hearings, and filing statutory appeals).

Small Demands: For small amounts (like Rs. 11,000 in this case), bypassing the adjudicating officer to go to the High Court is viewed as an unnecessary burden on the judicial system.

HIGH COURT OF MADRAS

Antony Projects

Superintendent of GST & Central Excise, Chennai

C. Saravanan, J.

W.P. No. 42706 of 2025
W.M.P. Nos. 47772 and 47774 of 2025

NOVEMBER 12, 2025

A.Kiruthika for the Petitioner. S.Gurumoorthy, Senior Standing Counsel and G.Meganathan, Junior Standing Counsel for the Respondent.

ORDER

1. This Writ Petition is before this court against the impugned Show Cause Notice dated 30.05.2024 bearing reference No.O.C.No.381 of 2024. The impugned Show Cause Notice calls upon the petitioner to show cause notice as to why:-

(i)

an amount of Rs.10,962/-(Rupees Ten Thousand Nine Hundred and Sixty-Two only) [CGST-Rs.5,481/- and SGST-Rs.5,481/-], being the irregular/wrongly availed Input Tax Credit as explained it should not be demanded and recovered from them as provided under Section 73(1) of the CGST Act, 2017;

(ii)

why interest at the applicable rate should not be charged and demanded for the irregular input tax credit mentioned in Sl.No.(i) above, as provided under Section 50(1) of the CGST Act, 2017; and

(iii)

why penalty should not be imposed under Section 73(1) of the Central/Tamil Nadu Goods and Services Tax Act, 2017 read with Section 122(2)(a) of the Central/Tamil Nadu Goods and Services Tax Act, 2017 for the contraventions mentioned in the preceding paragraphs.

2. The learned counsel for the petitioner submits that the dispute pertains to belated availing of input that credit and that in view of the statutory intervention by insertion of Sections 16(40 and 16(5) of the respective GST enactments, the deadline for filign GSTR-3B stood extended to 30.11.2021.

3. It is submitted that the impugned show cause notice has, however, reckoned 28.10.2010 as the last date for filing the GSTR-3B return.

4. The learned counsel for the petitioner has placed reliance on the decision of this Court rendered on 17.10.2024 in a batch of cases in W.P.Nos.25081, 26548, and connected cases Sri Ganapathi Pandi Industries v. Asstt. Commissioner (State Tax) (FAC) (Mad)(GSTIN:33B2QPK5727DIZG) Rep.by its, with specific reference to paragraph No.10 which reads as follows:-

10. After filing of these Writ Petitions, certain development took place, I.e that 53^rd GST Council Meeting was held on 22.06.2024, and during the said Meeting, the GST Council recommended for extension of the deadline for availing ITC on any invoice or debit note under Section 16(4) of the CGST Act and this extension would be applicable to any GSTR-3B returns filed for the Fys 2017-2018, 2018-19, 2019-20 and 2020-21 with a new deadline deemed to be as “30.11.2021”, to which, the Presidential Assent was also obtained by the Government of Indian on 16.08.2024.

5. The case of the peittioner prima facie appears to be squarely convered by the aforesaid decision. The petitioner is therefore not precluded from relying on the same before the respondent in the adjudication proceedings. Therefore, this Writ Petition is dismissed in view of the availability of an alternative and more effective remedy the challenge to the show cause notice is also premature.

6. Hence, without expressing any further opinion on the merits of the case, this case is dismissed with liberty to the petitioner to work out the remedy. The petitioner can participate in the adjudication proceedings pursuant to the impugned notice. The petitioner shall therefore file a reply within a period of 30 days from the date of receipt of a copy of this order. Thereafter, the respondent shall pass appropriate orders on merits. Needless to state, the petitioner is entitled to raise all submisions available in law.

7. This Writ Petition is dismissed with the above liberty and directions. No costs. Consequently, the connected W.M.Ps are closed.