On January 16, a division bench of the Supreme Court led by Justices MR Shah and CT Ravi Kumar overturned a decision made by the Punjab and Haryana High Court, stating that the High Court's use of Article 226 jurisdiction to overturn a show-cause notice issued under Section 130 of the Central Goods and Service Tax Act was "premature." 

The Supreme Court observed that there had been claims of tax evasion and that the High Court should not have made any judgements concerning whether or not there had been any evasion of taxes. The same had to be taken into account in a suitable proceeding for which the notice was issued under Section 130 of the Act.

A Bench has overturned a decision and order made by the High Court of Punjab and Haryana in Chandigarh, which had overturned the notice given under Section 130 of the CGST Act of 2017 and the order of detention of goods/vehicles issued by the Assistant Commissioner State Tax. 

Justice Shah ruled in his decision, “…it was premature for the High Court to opine anything on whether there was any evasion of the tax or not. The same was to be considered in an appropriate proceeding for which the notice under section 130 of the Act was issued. Therefore, we are of the opinion that the High Court has materially erred in entertaining the writ petition against the show cause notice and quashing and setting aside the same.”

As a result, the judgement quashed and set aside the notice issued under section 130 of the CGST Act on September 14, 2021, and remanded the matter to the appropriate authority that had issued the notice. The judgement also set aside the impugned judgement and order passed by the High Court. 

The order of detention of goods or a vehicle issued by the Assistant Commissioner of State Tax and the notice issued pursuant to Section 130 of the CGST Act of 2017 were both set aside by the High Court in a decision dated 04-02-2022. The state filed an appeal against this decision.

Nevertheless, the High Court accepted the writ suit against the show cause notice and invalidated the show cause notice under section 130 of the Act in accordance with its authority under Article 226 of the Indian Constitution.

Case Title: State of Punjab Versus Shiv Enterprises
Citation: Civil Appeal No. 359 of 2023

Appearance of the Advocates:-

For Petitioner(s)

Ms. Nupur Kumar, AOR
Mr. Divyansh Tiwari, Adv.

For Respondent(s)

Mr. Sandeep Goyal, Adv.
Mr. Pawanshree Agrawal, AOR
Ms. Vidisha Swarup, Adv.
Ms. Shubhangi Negi, Adv.