The Calcutta High Court has dismissed the writ petition filed by Britannia against the show cause notice (SCN) issued by the Directorate General of GST Intelligence (DGGI) asking why the recovery worth Rs. 105 crores should not be made, citing alternative remedy.
The bench of Justice Rajarshi Bharadwaj has observed that writ courts do not interfere in cases where statutory remedies are available unless there is a clear violation of fundamental rights, lack of jurisdiction, or procedural perversity leading to manifest injustice. The petitioner has not demonstrated any such exceptional circumstances warranting this Court’s intervention.
The bench noted that instead, the statutory framework under the CGST Act provides adequate mechanisms for addressing the petitioner’s concerns, including responding to the SCN, participating in adjudication proceedings and availing appellate remedies if dissatisfied with the outcome.
The Petitioner is engaged in the manufacture and supply of various food items, including bakery products such as biscuits, bread, cakes, and rusks, along with dairy products. These products are distributed to customers and dealers through the Petitioner’s multiple units located across India.
On December 16, 2021, the officers of the Directorate General of GST Intelligence (DGGI), Delhi Zonal Unit conducted a search at the Petitioner’s premises in Delhi. During the proceedings, several summonses were issued, statements were recorded and various documents and information were sought from the Petitioner. The Petitioner duly complied with all the requirements during these proceedings.
Subsequently, DGGI issued a Show Cause Notice under Section 74(1) of the CGST Act, 2017, read with Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017. The Show Cause Notice sought recovery of Rs. 1,05,11,99,662 in GST, along with interest under Section 50 and an equivalent penalty under Section 74(1) of the CGST Act, 2017.
The SCN contained several allegations against the Petitioner. It accused the Petitioner of wrongfully availing the benefit of an exemption on the supply of “Kulcha” by misclassifying it as “bread” under S. No. 97 of Notification No. 02/2017 – Central Tax (Rate) dated June 28, 2017.
Additionally, the SCN denies the reduction of the Petitioner’s outward tax liability based on credit notes issued for deficient services and destroyed goods. This denial is grounded on the claim that the corresponding Input Tax Credit (ITC) was not reversed by the suppliers or recipients of such goods, as required under Section 34 of the CGST Act.
The court refrained from adjudicating or delving into the merits of the case as the issues raised in the writ petition pertain to complex questions of fact and law that are squarely within the jurisdiction of the adjudicating authority under the Central Goods and Services Tax (CGST) Act, 2017. The petitioner’s grievances primarily relate to the invocation of the extended period of limitation, allegations of misclassification of goods and denial of Input Tax Credit (ITC).
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Case Details
Case Title: M/s. Britannia Industries Limited -Vs- Union of India & Ors.
Case No.: W.P.A 24534 of 2024
Date: 23.12.2024
Counsel For Appellant: Sr. Adv. Abhratosh Majumder
Counsel For Respondent: Vipul Kundalia
