Writ Against Show Cause Notice in GST Not Maintainable: Petitioner Directed to Alternate Remedy

Case Summary

Case Title: M/s Himalaya Wellness Company v. Union of India & Ors.
Court: High Court of Himachal Pradesh, Shimla
Petition Number: CWP No. 9239 of 2024
Category of Dispute: Input Tax Credit
Date of Judgement: 08.05.2025
Relevant Sections: Section 74 of CGST Act, 2017; Article 226 of the Constitution of India
Coram: Hon’ble Mr. Justice Tarlok Singh Chauhan and Hon’ble Mr. Justice Sushil Kukreja

Facts of the Case (Para 4 to 11)

1. The petitioner, M/s Himalaya Wellness Company, a registered partnership under GST, engaged in the supply of medicaments and cosmetics, availed Input Tax Credit (ITC) on Goods Transport Agency (GTA) services between FY 2017–18 and 2021–22.

2. An audit by the CGST Audit Wing found discrepancies, and a Final Audit Report was issued, allegedly ignoring the petitioner’s reply and documents (Para 9).

3. A DRC-01A notice followed demanding ₹4.37 crore in tax, interest, and penalty, to which a detailed reply was submitted (Para 10).

4. A show cause notice (SCN) dated 31.05.2024 was issued under Section 74(1) of the CGST Act, proposing demand and recovery, including alleged inadmissible ITC and short-paid GST (Para 11).

Question(s) in Consideration (Para 1, 3, 13)

1. Whether the writ petition is maintainable against a show cause notice when alternate statutory remedies under CGST Act exist?

2. Whether the issuance of the show cause notice with alleged pre-conceived intent or in violation of natural justice renders it challengeable under Article 226?

Observations of the Court (Para 16 to 24)

1. The Court reiterated the principle that High Courts should refrain from entertaining writ petitions when efficacious alternate statutory remedies exist (Para 16–19).

2. The petitioner failed to establish any exceptions warranting writ interference—no violation of natural justice, no jurisdictional overreach, and no challenge to vires (Para 20, 22).

3. Merely receiving a show cause notice does not justify alleging bias or pre-conceived mindset; the adjudication process must be completed before approaching the Court (Para 22, 24).

4. The Court relied on Radha Krishan Industries v. State of H.P. (2021), Assistant Commissioner of Sales Tax v. M/s Commercial Steel Ltd. (2022), and State of Punjab v. Shiv Enterprises (2023) to reinforce the principle of alternate remedy (Para 21, 23).

Judgement of the Court (Para 25–26)

• The Court held that the writ petition against the show cause notice is not maintainable and dismissed the same without prejudice to the petitioner’s rights to approach the adjudicating authority or statutory appellate forum.

• All legal contentions of the petitioner are kept open to be decided on merits by the appropriate authority.

🧾 Between Fine Lines

1. A mere show cause notice cannot be quashed through writ unless fundamental rights or jurisdictional issues are involved.

2. GST law provides a structured redressal mechanism; courts discourage bypassing it.

3. Filing a writ petition at pre-adjudication stage is considered premature.

4. The petitioner retains the right to defend before the proper authority.

5. Dismissal does not mean the case is meritless—only that remedy lies elsewhere.

📚 Summary of Referred Cases

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