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
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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
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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.
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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
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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
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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.
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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-
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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
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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,
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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
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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.
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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, 2017G.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
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Wp_16266_2023Government 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:-
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(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.
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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 17-6-2021Certain 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
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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
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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.
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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
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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
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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
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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
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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
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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