Dismissal of a writ appeal is warranted when a show cause notice

Dismissal of a writ appeal is warranted when a show cause notice requires factual examination.

Issue

Whether a writ petition challenging a Show Cause Notice (SCN) that demands GST on an overseas government construction project is maintainable, or if the notice requires detailed factual examination regarding the integration of Indian and local supply channels, thereby precluding immediate judicial intervention.

Facts

In 2017, the appellant-contractor, based in Tamil Nadu, was awarded a government contract to construct the New Supreme Court building in Port Louis, Mauritius, funded by a Government of India grant.
The project agreement was executed, and construction was successfully completed in the year 2020.
Following an official inspection, the tax authorities issued an SCN dated July 22, 2024, demanding GST on the execution of this overseas project.
The SCN detailed that while materials were procured both locally in Mauritius and via shipments from the contractor’s Indian office, and receipts were accounted for at the Mauritius site, the overall revenue and expenditures were consolidated within the company’s financial records in India.
The appellant filed a writ petition to quash the SCN, which the Single Judge dismissed on the grounds that the challenge was premature. The appellant subsequently filed a writ appeal against this dismissal.

Decision

Held, no: The writ appeal was dismissed entirely in favor of the revenue, upholding the validity of the SCN process.
Factual Basis Established: The court observed that the SCN disclosed a clear factual nexus linking the supply operations with India, directly impacting the statutory applicability of the GST law.
Not Patently Without Jurisdiction: Because the alleged lack of jurisdiction was not apparent on the face of the record and heavily depended on a detailed examination of transactional facts, the SCN could not be termed ex facie without jurisdiction.
No Infringement of Rights: The court ruled that the mere issuance of an SCN does not infringe upon the absolute rights of the assessee, and the appellant must agitate these factual nuances before the adjudicating authority rather than rushing to the High Court.

Key Takeaways

Writ Court Restraint on SCNs: High Courts will generally not entertain writ petitions against regular Show Cause Notices unless the notice suffers from a patent, undeniable lack of statutory jurisdiction or violates principles of natural justice.
Mixed Questions of Fact and Law: The determination of the “place of supply” under the IGST Act, especially involving cross-border contracts with blended domestic and foreign accounting trails, is a mixed question of fact and law that must be primary resolved by the designated tax authorities.
Exhaustion of Alternative Remedies: Taxpayers must submit to the statutory adjudication process, file their detailed replies to the SCN, and allow the primary authority to evaluate the financial and operational integration before seeking high court intervention.

HIGH COURT OF MADRAS

Renaatus Projects (P.) Ltd.

Joint Director, Directorate General of gst Intelligence, Chennai

DR. G. JAYACHANDRAN and Mrs. N.MALA, JJ.

W.A. No.190 of 2026
CMP. No.1755 of 2026

JUNE 23, 2026

Shivkumar G for the Appellant. G.Meganathan for the Respondent.

ORDER

Mrs. N. Mala, J.- Writ appeal is filed against the order dated 26.08.2025 passed in W.P.No.32465/2024, dismissing the writ filed for Certiorari to quash the impugned Show Cause Notice bearing No.76/2024-GST dated 22.07.2024 issued by the 1^st respondent herein.

2. The appellant is a Private Limited company and a registered GST tax payer in the State of Tamil Nadu. The appellant is engaged in the business of construction of roads, highways, bridges and other infrastructural projects, industrial structures, hotels and civil works of the Government and private entities. NBCC India Limited, New Delhi, a blue chip Government of India Navratna Enterprise under the Ministry of Housing and Urban Affairs, floated a tender on 19.09.2017, for construction of New Supreme Court Building at Port Louis, Mauritius. The project was a Government of India Grant project to the Mauritius Government. After due process, tender was awarded to the appellant company by the Letter of Award dated 14.11.2017. Thereafter, formal agreement was entered into between NBCC India Limited and the appellant on 06.12.2017. Even though the appellant has referred to several other facts in his affidavit, suffice it to state that consequent to the aforesaid letter of Award and agreement, the appellant completed the project of constructing the Supreme Court building at Port Louis, Mauritius, in the month of October, 2020. While so, the 1^st respondent issued impugned show cause notice bearing No.76/2024-GST, demanding GST for the execution of the above project, which the appellant challenged in W.P.No.32465 of 2024. The learned Judge, after elaborately considering all the appellant’s objections to the impugned show cause notice, dismissed the writ petition as pre-mature. Aggrieved by the order passed in the writ petition, the appellant has filed the above writ appeal.

3. The learned counsel for the appellant submitted that the 1^st respondent had no jurisdiction to issue the impugned show cause notice for a project the situs of which was outside India. The learned counsel relying on the provisions of Section 2(70), 2(71) and 2(71)(iii) of the Goods and Services Tax Act, 2017, submitted that the said project was not an interstate supply, and therefore the GST Act was inapplicable. The learned counsel further submitted that since the GST Act was inapplicable, the demand made under the impugned show cause notice is completely without jurisdiction and beyond the provisions of GST Act. The learned counsel for the appellant submitted that both the service provider, i.e. the appellant and the recipient (NBCC) had registered offices in Mauritius i.e. outside India, for execution of the project and that all transactions including financial ones were carried out only in Mauritius and therefore the territorial laws of India had no application to the project which was executed completely outside India. The learned counsel relied on the judgment of the Telangana High Court in the case of Sri Avantika Contractors (I) Ltd. v. Appellate Authority for Advance Ruling (GST) 106 GST 636/91 GSTL 75 (Telangana)/2024 (8) TMI 943, to buttress his submission that GST Act was inapplicable to the subject contract. The learned counsel therefore submitted that the impugned show cause notice, was issued without jurisdiction and hence deserved to be set aside.

4. In contra, the learned counsel for the respondent relying on Section 12(3) and 7(1) of the GST Act, contended that the supply made by the appellant from Chennai and received by NBCC, at New Delhi was only an inter-state transaction and hence amenable to the provisions of the GST Act. The learned counsel for the respondent further submitted that since the challenge in the writ petition was only to a show cause notice, the learned Judge rightly rejected the same on the ground that it was premature.

5. We have heard both the learned counsels and perused the materials placed on record.

6. The facts are undisputed, suffice it to state that the appellant was awarded the contract on 14.11.2017 for construction of “New Supreme Court building at Port Louis, Mauritius”. The formal agreement for the contract was entered on 06.12.2017 between NBCC and the appellant. The project was completed in the month of October, 2020. Later, based on the intelligence information, an inspection was conducted in the appellant’s company, under the letter of authorization dated 08.10.2020, of the Additional Director, the premises of the appellant was visited on 09.10.2020 and verifications were carried out. Pursuant to the inspection, the impugned show cause notice dated 22.07.2024 was issued to the appellant.

7. A bare reading of the show cause notice, reveals the reason why the respondents considered that the appellants project was taxable under GST. According to the respondents, the materials for the project in Mauritius were procured locally and also through shipments from the appellant’s India office. The respondents in their inspection, found that though the receipts and proceeds (consideration for the construction service rendered) from NBCC were accounted by the site office at Mauritius, the revenue and expenditure relating to the site office at Mauritius were merged, consolidated and reported finally under the financials of the appellant’s India company. In this factual scenario, we are of the view that these factual aspects have a bearing on the applicability of the GST Act, to the appellants subject project and therefore in our considered opinion, the show cause notice ex facie cannot be considered as without jurisdiction.

8. It is settled law that a mere show cause notice does not infringe the right of any one. It is only a final order imposing some penalty or which otherwise adversely affects a party that a party can be said to be aggrieved. Even though the appellant has raised a jurisdictional issue, in the present case. We find that the lack of jurisdiction is not patent. The interpretation placed on the provisions of the GST Act, are dependent on an examination of the facts and therefore we find no lack of jurisdiction in the authorities in issuing the show cause notice.

9. The learned counsel for the appellant relied on the judgment of the Telangana High Court in the case of Sri Avantika Contractors (I) Ltd. (Supra), in support of his case. We have gone through the judgment and find that the judgment was rendered in a matter arising out of an advance ruling order issued by the competent authority against the petitioner therein, and therefore clearly distinguishable from the facts of the present case. Having examined the matter thoroughly, we find the learned Judge has correctly addressed the appellant’s objections. We see no warrant for interference and concur entirely with the views taken by the learned Judge.

10. In view of the above discussions, we find no merit in the writ appeal. It is open to the appellant to utilize the liberty given by the learned Judge. However, the time of 30 days granted by the learned Judge shall run from the date of receipt of a copy of this order.

Accordingly, the writ appeal is dismissed. No costs, consequently, the connected miscellaneous petition is closed.