Telangana High Court
Gmr Pochanpalli Expreessways Limited vs Additional Director on 28 October, 2024
Author: N. Tukaramji
Bench: P.Sam Koshy, N.Tukaramji
THE HON'BLE SRI JUSTICE P. SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N. TUKARAMJI
WRIT PETITION NO. 16266 OF 2023
ORDER:(Per Hon'ble Sri Justice N. Tukaramji) By filing this writ petition under Article 226 of the Constitution of India, the petitioner has prayed for the grant of Writ of mandamus or any other Writ:
(i) To set aside the impugned Show Cause Notice No.5/2023-24 dated 28.04.2023 issued by respondent No.1 demanding Goods and Services Tax (GST) of Rs.68,26,68,000/- along with interest and penalty on the annuity amount received for the period September 2017 -
September 2022;
And
(ii) To declare Circular No.150/6/2021 GST dated 17.06.2021 as ultra vires and in contravention to Sl. No.23-A of Notification No. 12/2017-CT(Rate) dated 28.06.2017 (as amended) and the 22nd recommendations of the GST Council and consequently set aside the same.
2. Heard Mr. S. Niranjan Reddy, learned Senior Counsel appearing on behalf of Ms.Rubaina S. Khatoon, counsel for the 2 PSKJ&NTRJ Wp_16266_2023 petitioner and Mr. Dominic Fernandes learned Senior Counsel for the Central Excise, Customs & Service Tax Department, for the respondents.
FACTUAL MATRIX:
3. The Government of India entrusted certain stretches of National Highway-7 (NH) to the National Highway Authority of India (NHAI) vide Notification No. S.O. 456(E) dated 26.04.2002. After that, the NHAI under Section 16 of the NHAI Act, 1988 took up the widening of existing two lanes i.e. from 367/0 to km 447/20 for improvement, operation and maintenance from 447/0 km to 464/0 km with the participation of the private sector in the Build-Operate- Transfer (BOT) model on an annuity basis for 20 years and invited the bidders to implement the project.
4. The NHAI accepted the proposals of the consortium consisting of GMR Infrastructure Limited and GMR Energy Limited/writ petitioner (from now on, 'the petitioner'). Accordingly, an acceptance letter dated 30.12.2005 was issued. In terms thereof, the NHAI and the petitioner entered into a contract agreement on 31.01.2006 for the execution of work on a BOT annuity basis.
5. The concession agreement stipulates that the petitioner/concessionaire has to bear all the expenditure for the 3 PSKJ&NTRJ Wp_16266_2023 fulfilment of the obligations in execution and perform the entrusted assignments including engineering, financial, construction, operation and maintenance respectively during the concession period and allow the NHAI to levy demand and collect appropriate fees from the vehicles and people liable for payment.
6. The petitioner carried out the entire construction of the road by discharging service tax and value-added tax (VAT) by 26.03.2009 and began operation and maintenance on 27.03.2009.
7. As per the concession agreement, during the period, the petitioner/concessionaire is not allowed to collect tolls from the users and the consideration for the contract is payable by the NHAI in annuity of a fixed sum in instalments towards operation and maintenance of the assigned portion of the highway. However, if there is a failure to perform its obligations during the operation period, the annuity would be proportionally abated.
8. In this position the respondent department issued the show cause notice No.5/2023 dated 28.04.2023 stating that the annuity being paid to the petitioner for the construction of the road and proposed Goods and Service Tax on the annuity amount received for the period from September 2017 to September 2022.
4 PSKJ&NTRJ Wp_16266_2023 Challenging that show cause notice, the present writ petition came to be filed.
PLEADINGS OF THE PETITIONER:
9. Learned Senior Counsel would submit that the respondent Department vide Notification No.12/2017 dated 28.06.2017 in entry No.23 had exempted the toll taxes collected by the concessionaire for construction, maintenance, operation and providing road access to the vehicles on such roads. Subsequently, the annuities paid to the concessionaire in place of the toll charges were considered and on 06.10.2017 the 22nd GST Council recommended treating the annuity on par with the toll in executing the GST. In pursuance thereof, the GST the authority had issued Notifications vide 32 and 33 of 2017 on 13.10.2017 by introducing Entry Nos.23A and 24A, exempted services rendered by way of access to a road or a bridge on payment of annuity from GST.
10. Thereafter the 43rd GST Council clarified that payment of annuity for construction of roads/highways which is not instead of tolls is not exempt from the GST. Based on it, the respondent department issued the impugned Circular No.150/6/2021 GST dated 17.06.2021 settling that the Entry No.23A of the Notification No.12
5 PSKJ&NTRJ Wp_16266_2023 of 2017 does not exempt GST on annuity paid for the construction of the roads.
11. He asserts that the agreement is the BOT model, as such, during the period of concession, the petitioner would be in control and possession of the project and provide access to the users. Therefore equating the concession agreement to that of works the contract is implausible.
12. Further, the concession agreement and the construction of the road were completed in January 2009. By this fact, it is obvious that the taxable event was much before the enactment and enforcement of the GST Act, 2017. Thus levy of GST where the supplies were before the GST law particularly, in the absence of any construction services after 01.07.2017 would be without authority of law and jurisdiction.
13. Additionally contested that the concession agreement and annuity do not qualify the definition of supply of service in Section 7 of the CGST Act. Further citing Articles 2, 3, 6, and 18 of the agreement claimed that subject to making the availability of length of the road and period, the annuity proportionately abates, and the covenant explains that the annuity is linked to the access to the 6 PSKJ&NTRJ Wp_16266_2023 carriageway, which is, in principle as opposed to the toll charges. Therefore, the annuity paid by the NHAI to the petitioner is exempted under Sl. No.23A of the Notification No.32 of 2017. That apart, asserted that the impugned circular applies to the hybrid annuity models but not the BOT annuity model. As such, the show cause notice based on the impugned circular is untenable.
14. Besides pleaded that, in M/S DPJ Bidar - Chincholi (Annuity) Road vs. Union of India & Ors, Writ Petition No.22250 OF 2021 judgment dated 11.07.2022 the Hon'ble High Court of Karnataka held that the Circular dated 17.6.2021 for issuance of the impugned show cause notice is contrary to the exemption Notifications and quashed the Circular. The dictum in Kusum Ingots & Alloys Ltd. v.Union of India, (2004) 6 SCC 254 and Shiv Kumar v. Union of India, AIR 2014 Kar 73, T.Rajakumari and others v. Govt. of TN AIR 2016 Md 177 stipulates that any pronouncement regarding the constitutionality of a particular Act or Rule or Notification or Circular would apply with full force across the country. As such the quashment of the impugned circular stands non-est and in consequence, the show cause notice shall lose legal effect.
7 PSKJ&NTRJ Wp_16266_2023
15. Furthermore pleaded, for gross illegality in the issuance of the impugned show cause notice, the Writ remedy is maintainable. On this point cited authority between Whirlpool Corpn. V. Registrar of Trade Marks, (1998) 8 SCC 1 and pleaded that the Hon'ble Supreme Court found fault with the High Court in dismissing the writ petition at the initial stage without examining the contention that the show cause notice issued to the writ petitioner was wholly without jurisdiction and held that entertaining a writ petition under Article 226 of the Constitution is maintainable, despite alternative statutory remedy, especially in a case where the authority against whom the writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation. Hence prayed for intervention and set aside the impugned circular and show cause notice.
PLEADINGS OF THE RESPONDENT DEPARTMENT:
16. The learned Senior Standing Counsel for the Department would submit that the concession agreement between the petitioner/concessionaire and the NHAI is manifesting the period of the contract and the amount payable after completion of each of the milestones and the invoices to be raised are for 20 years inclusive of periodical payment obligations. Nonetheless, the petitioner in self-
8 PSKJ&NTRJ Wp_16266_2023 assessment claimed exemption from payment of the GST in Sl. No.23A of the Notification No.12 of 2017 dated 28.06.2017 claiming Service Accounting Code (SAC) 9967, though the services rendered by the petitioner/concessionaire are under SAC 9954. The clarification in Circular No.150/06/2021-GST dated 17.06.2023 is that the exemption does not cover the construction of road services under heading 9954, even if the deferred payment is made by way of instalments (annuities). Therefore the exemption under Sl. No.23A of the Exemption Notification would not apply to the petitioner's case. On that account, the impugned show cause notice demanding the GST is justified. Further, the contention that the department cannot impose GST on the annuity amount received for September 2017 to September 2022 cannot be accepted as the petitioner had raised invoices during the GST regime and received the amounts.
17. Further submits that the impugned writ petition against the show cause notice itself is premature as the proceedings are at the initial stage before the authority and any interest much less fundamental right has been infringed at the moment. Further explained that the initiation of proceedings under Section 73 of the CGST Act is time-bound and to protect the revenue, show-cause 9 PSKJ&NTRJ Wp_16266_2023 notice has been issued. Therefore the contention that the demand was predetermined by the authority is unacceptable. That apart, as there is a continuous supply of service, the pleading of the petitioner that they are not liable to pay tax as the construction was completed even before the commencement of the GST Act 2017 is unsuitable as the time of supply of service would be in tune with the issuance of the invoice by the service provider or the date of receipt of payment in terms of Section 13(2) and Section 31(5) of the CGST Act. Furthermore, the agreement and invoices drawn by the petitioner make it obvious that the ownership of the project is with the NHAI, except for rendering operation and maintenance service by the petitioner. Admittedly the authorisation to collect the toll is with the NHAI. Above all, neither the agreement nor the invoice nor any other communications specify that the annuity is in contrast with the toll. Therefore the petitioner to evade the tax, claiming exemption by wrongly classifying the services rendered and the taxability of the services are within the purview of the GST Council and CBIC and the NHAI has no role in determining the taxability of the service. Thus, the challenge against the show cause notice is premature and in catenae of judgments, the Hon'ble Supreme Court had deprecated interference at the stage of show cause notice, 10 PSKJ&NTRJ Wp_16266_2023 except for glaring illegality and error of jurisdiction. The contentions raised in the writ petition are not on these aspects as such interference at this stage is unwarranted.
18. In support, the learned counsel for the Department placed reliance on the judgments (i) The State of Punjab v. M/s Shiv Enterprises and Ors (Arising out of SLP (C) No. 19295/2022), (ii) Rajendra Narayan Mohanty v. CT and GST Cuttack -1 East Circle and Ors, WP (C) No. 5332/2022, (iii) Federation of Hotel and Restaurants Association v. UOI, (1989) 3 SCC 634, (iv) Nitdip Textile Processor vs UOI, (2012) 1 SCC 226, (v) Anant Mills Co. Ltd. v. State of Gujarat and Ors, (1975) 2 SCC 175 and (vi) Valliamma Champaka Pillai v. Siuvathanu Pillai, 1979 (8) TMI 210. ANALYSIS:
19. The foundational facts i.e., the petitioner's contract with NHAI for execution, operation and maintenance of the notified portion of National Highway in BOT annuity Model for a period of 20 years and completion of construction by March 2009 and continuance of maintenance contract up to 2029 are not in dispute.
20. Additionally, there cannot be disagreement as to the facts of the respondent department vide notification dated 28.06.2017 in 11 PSKJ&NTRJ Wp_16266_2023 Sl.No.23 under heading 9967 exempted tax for the services by way of access to a road or a bridge on payment of toll charges. The relevant portion is extracted hereunder:
Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 G.S.R......(E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest to do, on the recommendations of the Council, hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely:-
TABLE Sl.No. Chapter,Section,Heading, Description Rate Condition Group or Serivce Code of Services (per (Tariff) cent) (1) (2) (3) (4) (5) 23 Heading 9967 Service by Nil Nil way of access to a road or a bridge on payment of toll charges.
12 PSKJ&NTRJ Wp_16266_2023 Therefore it is obvious that Sl.No.23 is specifying exempting the tax for the services by way of access to a road or a bridge, the consideration is by way of toll charges.
21. Thenceforward the 22nd GST Council's deliberation on the issue of payment of annuity in place of toll charges to the developers of public infrastructure and its recommendation to treat the annuity on par with toll and exempt from tax for the service by way of access to a road or bridge on payment of annuity. Whereupon, Notifications 32 and 33 of 2017 were issued exempting the services by way of access to road or a bridge on payment of annuity, from GST by inserting Sl.Nos.23A and 24A under the services SAC 9967.
22. For better appreciation the preamble and relevant portions of Notification Nos.32 and 33 of 2017 - Central Tax (Rate) are extracted hereunder:
Notification No. 32/2017- Central Tax (Rate) New Delhi, the 13th October, 2017 G.S.R......(E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the 13 PSKJ&NTRJ Wp_16266_2023 Government of India, in the Ministry of Finance (Department of Revenue), No.12/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 691(E), dated the 28th June, 2017, namely:-
(i) in the Table, -
(a) ....
(b) ....
(c) ....
(d) after serial number 23 and the entries relating thereto, the following serial number and entries shall be inserted namely: -
Sl.No. Chapter,Section,Heading, Description Rate Condition Group or Serivce Code of Services (per (Tariff) cent) (1) (2) (3) (4) (5) "23A Heading 9967 Service by Nil Nil way of access to a road or a bridge on payment of annuity.
Notification No. 33/2017- Integrated Tax (Rate) New Delhi, the 13th October, 2017 G.S.R. 1276(E). - In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 9/2017 Integrated Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 684 (E), dated the 28th June, 2017, namely:-
14 PSKJ&NTRJ Wp_16266_2023
(i) in the Table,
(a) ....
(b) ....
(c) ....
(d) after serial number 24 and the entries relating thereto, the following serial number and entries shall be inserted namely:
Sl.No. Chapter,Section,Heading, Description Rate Condition Group or Serivce Code of Services (per (Tariff) cent) (1) (2) (3) (4) (5) "24A Heading 9967 Service by Nil Nil"
way of
access to a
road or a
bridge on
payment of
annuity.
23. Hence, the above notifications by supplementing the Serial Numbers 23A and 24A in the GST Act 2017 and IGST Act 2017 respectively, the services by way of access to a road or bridge on payment of an annuity, under the service head of 9967 are exempted from tax.
24. Subsequently at the instance of the government authorities on a query, the 43rd GST Council explicated that the annuity paid as deferred payment for construction of roads has not been exempted from GST. Nonetheless reiterated that Entry No.23A of 2017 Notification exempts service by way of providing access to road or bridge on payment of annuity.
15 PSKJ&NTRJ Wp_16266_2023
25. Thereupon the respondent department issued an impugned circular on 17.06.2021 as clarification, which reads as under:
"CIRCULAR No.150/06/2021-GST [CBIC-190354/36/2021-TRU SECTION-CBEC] SECTION 9, READ WITH SECTION 11 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - LEVY AND COLLECTION OF TAX - CLARIFICATION REGARDING APPLICABILITY OF GST ON ACTIVITY OF CONSTRUCTION OF ROAD WHERE CONSIDERATIONS ARE RECEIVED IN DEFERRED PAYMENT (ANNUITY) CIRCULAR No.150/06/2021-GST [CBIC-190354/36/2021-TRU SECTION-CBEC], DATED 17-6-2021 Certain representations have been received requesting for a clarification regarding applicability of GST on annuities paid for construction of road where certain portion of consideration is received upfront while remaining payment is made through deferred payment annuity spread over the years.
2. This issue has been examined by the GST Council in its 43rd meeting held on 28th May, 2021.
2.1 GST is exempt on service, falling under heading 9967 (service code), by way of access to a road or a bridge on payment of annuity [entry 23A of notification No.12/2017-Central Tax]. Heading 9967 covers "supporting services in transport" under which code 996742 covers "operation services of National Highways, State Highways, Expressways, Roads & streets; bridges and tunnel operation services". Entry 23 of said notification exempts "service by way of access to a road or a bridge on 16 PSKJ&NTRJ Wp_16266_2023 payment of toll". Together the entries 23 and 23A exempt access to road or bridge, whether the consideration is in the form of tolls or annuity [heading 9967].
2.2 Services by way of construction of road fall under heading 9954. This heading inter alia covers general construction services of highways, streets, roads railways, airfield runways, bridges and tunnels. Consideration for construction of road service may be paid partially upfront and partially in deferred annual payments (and may be called annuities). Said entry 23A does not apply to services falling under heading 9954 (it specifically covers heading 9967 only). Therefore, a plain reading of entry 23A makes it clear that it does not cover construction of road services (falling under heading 9954), even if deferred payment is made by way of instalments (annuities).
3. Accordingly, as recommended by the GST Council, it is hereby clarified that Entry 23A of notification No. 12/2017- CT(R) does not exempt GST on the annuity (deferred payments) paid for construction of roads.
4. Difficulty if any, in the implementation of this circular may be brought to the notice of the Board."
26. Therefore by the contents of the circular, the Entry of 23A in the Notification that the GST is exempt on service falling under Service Code 9967, by way of access to a road or a bridge on payment of annuity has been reaffirmed. Additionally, explained that the service code covers (a) supporting services in transport (b) operation 17 PSKJ&NTRJ Wp_16266_2023 services of National Highways, State Highways, Express Highways, Roads and streets, (c) bridges and tunnel operation services, by way of access to a road or bridge on payment of toll under Entry 23 of the Notification. In substance, the services enumerated in 23 and 23A for providing access to roads or bridges are exempted, whether the consideration is in the form of tolls or annuities. On top of that, specified the services of construction of highways, streets, road railways, airfield runways, bridges and tunnels, which fall under Service Code 9954, whether the consideration may be upfront or partially in deferred annual payment/annuity is not covered under Entry 23A and not exempt from the GST.
27. The resolution of the 22nd GST Council and the consequent notification Nos.32 and 33 of 2017 elucidates that payment of annuity to the developers of public infrastructure has been equated with toll which was already exempted from tax. In effect, the service of access to a road or bridge on payment of an annuity covered under Code 9967 is qualified for exemption. Therefore insertion of entries 23A and 24A is in consonance with the resolution of the 22nd GST Council.
18 PSKJ&NTRJ Wp_16266_2023
28. The clarification of the 43rd GST Council saved exemption to the service under 9967 in entry No.23A and held that the exemption does not cover any deferred/annuity payment for construction service. Therefore it has been announced that the construction of roads simplicitor is taxable service, though the payment is in full or annuity to the concessionaire. The council's reiteration preserved the exemption of the Service under the Code 9967 and enunciated that the taxable Service fall within the scope of heading 9954. A close reading of notification Nos. 12, 32 and 33 of 2017 in no way suggests that the entries 23 or 23A or 24A exempts the services under 9954 i.e. construction service of the highways, bridges, and so on. Thus, we are of the considered opinion that there is no intersection or overlap or contradiction of direction in the resolutions of the 22nd and the 43rd GST Council vis-à-vis Notifications Nos. 12, 32 and 33 of 2017 and the impugned circular. In this view, the circular's explanation aligns with the 43rd GST Council resolution.
29. Thus, we respectfully disagree with the conclusion drawn by the learned single Judge of the High Court of Karnataka in M/S DPJ Bidar-Chincholi(Annuity) Road, (supra) that the impugned circular is overriding the notifications and bad in law, as it cannot be countenanced. That apart, we are unable to accept that the 19 PSKJ&NTRJ Wp_16266_2023 impugned show cause notice would stand or fall with the circular, as the demand for the tax against the petitioner was on the ground that the services of the petitioner fall under heading 9954 and is not exempted under entry 23A.
30. Pertinently, even as per the petitioner, the agreement has no straight covenant evidencing that the annuity is in place of the toll. Rather the agreement specifies that the NHAI is alone entitled to collection of toll. Although the petitioner claims that the payment of annuity is in the place of toll for providing access to the road in the contract, no specific material is pointed to ex-facie make out this fact. Further, the claim that an annuity is being received towards earlier work that was executed even before the regime of the GST Act, 2017 and as the maintenance is in continuation, the petitioner cannot be saddled with GST is another aspect of determination. In all, the contest would be within the compass of whether the service of the petitioner falls within the heading of SAC 9967 covered under Entry 23A or the annuity is being paid for the construction and maintenance of the road within the meaning of services covered under heading 9954 to make out the taxability under GST. Thus, we are of the considered opinion that a fact-finding deliberation is 20 PSKJ&NTRJ Wp_16266_2023 essential in determining the petitioner's position, which cannot be done in a writ petition.
31. Be that as it may, the challenge in the writ petition is against the show cause notice. It is a settled position that ordinarily no writ petition can be entertained against a show cause notice. A mere show cause notice does not give rise to any cause of action or cannot be considered as an adverse order that affects the rights of the parties unless it is established that such show cause notice has been issued by an authority without jurisdiction or the show cause notice has been issued without affording the recipient an opportunity to be heard or it is vague or ambiguous or the show cause notice is issued with malicious intention or in abuse of process or the notice threatened to cause irreparable harm, the court may not interfere with the show cause notice.
32. Regarding interference at the stage of show cause notice and the exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, the Hon'ble Supreme Court (i) In, Special Director and another v. Mohd. Gulam Ghouse and another - 2004(3) SCC 440 in para 5 held as under:
"5. This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petitions 21 PSKJ&NTRJ Wp_16266_2023 questioning the legality of the show-cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless the High Court is satisfied that the show- cause notice was totally non-est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine, and the writ petitioner should invariably be directed to respond to the show-cause notice and take all stands highlighted in the writ petition. Whether the show-cause notice was founded on any legal premises is a jurisdictional issue which can even be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the court. Further, when the court passes an interim order, it should be careful to see that the statutory functionaries specially and specifically constituted for the purpose are not denuded of powers and authority to initially decide the matter and ensure that ultimate relief which may or may not be finally granted in the writ petition is not accorded to the writ petitioner even at the threshold by the interim protection granted."
(ii) In, Union of India v. Kunisetty Satyanarana - (2006) 12 SCC 8 in paras 14, 15 and 16 held as under:
"14. The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge sheet is that at that stage the writ petition may be held to be premature. A mere charge sheet or show-cause notice does 22 PSKJ&NTRJ Wp_16266_2023 not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. It is well settled that a writ petition lies when some right of the party is infringed. A mere show-cause notice or charge sheet does not infringe on the rights of anyone. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance.
15. Writ jurisdiction is discretionary jurisdiction and hence such discretion under Article 226 should not ordinarily be exercised by quashing a show-cause notice or charge- sheet.
16. No doubt, in some very rare and exceptional cases the High Court can quash a charge sheet or show-cause notice if it is found to be wholly without jurisdiction or for some other reason if it is wholly illegal. However, ordinarily, the High Court should not interfere in such a matter."
(iii) In, Secretary, Ministry of Defence and others v. Prabhash Chandra Mirdha - (2012) 11 SCC 565 in para No.10 held as under:
"10. Ordinarily, a writ application does not lie against a charge- sheet or show-cause notice for the reason that it 23 PSKJ&NTRJ Wp_16266_2023 does not give rise to any cause of action. It does not amount to an adverse order which affects the right of any party unless the same has been issued by a person having no jurisdiction/competence to do so. A writ lies when some right of a party is infringed. In fact, a charge sheet does not infringe the rights of a party. It is only when a final order imposing the punishment or otherwise adversely affecting a party is passed, it may have a grievance and cause of action. Thus, a charge sheet or show-cause notice in disciplinary proceedings should not ordinarily be quashed by the Court."
33. Further in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others (supra) the Hon'ble Supreme Court while holding that the writ petition against the show cause notice is maintainable specified that the interference could be in the cases where the authority had no jurisdiction or attempting to usurp jurisdiction without any legal foundation.
34. Thus, it shall be held that the Court shall not ordinarily exercise judicial review against show cause notice except for rare and exceptional cases where the show cause notice is wholly without jurisdiction or in the circumstances enumerated above making it illegal.
35. In the present case, so many factors need determination to positively conclude the petitioner's claims and in the absence of any 24 PSKJ&NTRJ Wp_16266_2023 specific tenable ground demonstrating lack or error in the jurisdiction of the respondent department in the issuance of show cause notice or any other tenable ground necessitating interference of the Court at the stage of show cause notice and as there is also possibility of dropping the show cause notice considering the reply of the petitioner and on determination of facts, we are of the considered opinion that interference at this stage is not warranted.
36. For the aforesaid reasons, keeping open the claims of the petitioner to be presented before the appropriate authority and determination of contested facts, this writ petition is dismissed. Nevertheless, having regard to the elapsed time, the petitioner is permitted to submit its explanation within four (4) weeks from today, whereupon, the respondent authority shall be at liberty to proceed with the matter as per law. No costs.
As a sequel, pending miscellaneous petitions if any, stands closed.
_______________ P.SAM KOSHY, J _______________ N. TUKARAMJI, J Date :28-10.2024 CCM