High Court Holds That Unnecessary Observations on Validity of
GST Show Cause Notice Should Not Be Made While Relegating Assessee to
Alternative Remedy
Additional Commissioner of Central Tax & Others v. M/s Apkon
Ventures Pvt. Ltd. / High Court of Karnataka / 20 January 2026 / Writ Appeal
No. 141 of 2025 (T-RES)
Introduction
of the Case
This case was decided by
the Division Bench of the High Court of Karnataka in a writ appeal filed by the
Revenue authorities. The dispute arose from certain observations made by the
learned Single Judge while disposing of a writ petition relating to GST proceedings.
Although the writ petition had been dismissed on the ground of availability of
an alternative statutory remedy under Section 107 of the CGST Act, the Single
Judge had also observed that issuance of a single show cause notice for three
financial years was erroneous. The Revenue challenged only this observation
before the Division Bench.
The case mainly dealt
with the issue of whether a Court should make observations on the correctness
or validity of a show cause notice after directing the assessee to avail the
statutory appellate remedy.
Facts of
the Case
A show cause notice dated
20.12.2022 was issued to M/s Apkon Ventures Pvt. Ltd. by the GST authorities.
Pursuant to the said notice, an order was passed under Section 74(9) of the
Central Goods and Services Tax Act, 2017 and Section 73(9) of the Karnataka
Goods and Services Tax Act, 2017.
Aggrieved by the
proceedings, the assessee filed Writ Petition No. 32460 of 2024 before the High
Court. The learned Single Judge declined to entertain the writ petition on the
ground that an effective alternative remedy of appeal was available under Section
107 of the CGST Act. However, while disposing of the writ petition, the Single
Judge made an observation that issuance of a single show cause notice covering
three financial years was erroneous.
The Revenue authorities
challenged this limited observation before the Division Bench through the
present writ appeal.
Submissions
by the Appellants
The Revenue authorities
argued that the learned Single Judge ought not to have made any observation
regarding the validity or correctness of the show cause notice after relegating
the assessee to the statutory appellate remedy.
It was contended that the
observation relating to issuance of a common notice for three financial years
touched upon jurisdictional and legal issues concerning the show cause notice.
According to the appellants, once the writ petition was dismissed on the ground
of alternative remedy, such findings or remarks were unnecessary and could
prejudice further proceedings.
Therefore, the appellants
requested the Court to expunge the specific observation made in the earlier
order.
Submissions
by the Respondents
The respondent-assessee
submitted that the order passed pursuant to the show cause notice had already
been challenged in another writ petition and the Court had subsequently set
aside both the show cause notice and the consequential order by judgment dated
17.12.2025.
On that basis, it was
argued that the present writ appeal had become infructuous and no further
adjudication was necessary.
Analysis
and Judgment of the Court
The Division Bench
examined the impugned order passed by the learned Single Judge. The Court noted
that the writ petition had been disposed of by directing the assessee to avail
the statutory remedy under Section 107 of the CGST Act. However, while doing
so, the Single Judge also made an observation that issuance of a single show
cause notice for three financial years was erroneous.
The Division Bench held
that such an observation was unnecessary because it touched upon the
correctness and jurisdictional validity of the show cause notice itself. The
Court observed that once a party is relegated to the appellate remedy, the
Court should avoid making findings or observations on the merits of the
dispute, as the same may affect subsequent proceedings before appellate
authorities.
Accordingly, the Division
Bench interfered with the order only to the limited extent of deleting the
observation made by the learned Single Judge regarding the validity of the
common show cause notice. Except for deletion of that observation, the writ appeal
was dismissed.
Conclusion
The judgment in
Additional Commissioner of Central Tax & Others v. M/s Apkon Ventures Pvt.
Ltd. clarifies that when a High Court declines to entertain a writ petition on
the ground of availability of an alternative statutory remedy, it should avoid
making unnecessary observations on the merits or validity of the disputed
proceedings. The Division Bench emphasized that such remarks may prejudice
future adjudication before appellate authorities. The decision reinforces
judicial discipline and highlights the importance of limiting observations when
parties are directed to pursue statutory remedies under GST law.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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