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2020 ] MAHAVIR ENTERPRISE v. ASSISTANT COMMISSIONER OF STATE TAX 21
19. We do not propose to enter into the merits of the allegations lev-
elled against the writ applicant as regards bogus billing transactions without
there being any physical movement of the goods as the matter is at the stage of a
show cause notice, we only propose to consider whether the impugned show
cause could be termed as per se without jurisdiction and a nullity and the validity
of Rule 142(1)(a) of the Rules.
20. The scope of judicial review, against the show cause notice, is re-
quired to be dealt with first. In the case of Standard Chartered Bank and Others v.
Directorate of Enforcement and Others reported in AIR 2006 SC 1301 = 2006 (197)
E.L.T. 18 (S.C.), it is held that ordinarily the Court should be reluctant to interfere
with the show cause notice unless the notice is shown to have been issued appar-
ently without any authority of law. The relevant observations are thus :
“23. The prayer for the issue of a writ of prohibition restraining the au-
thorities under the Act from proceeding with the adjudication and the
prosecution is essentially based on the constitutional challenge to the rele-
vant provisions of the Act on the ground that they violate Articles 14 and 21
of the Constitution of India. Once we have held, as the High Court did, that
the provisions are constitutional, the basis on which the writ of prohibition
is sought for by the appellants disappears. It is settled by the decisions of
this Court that a writ of prohibition will issue to prevent a Tribunal or Au-
thority from proceeding further when the Authority proceeds to act with-
out or in excess of jurisdiction; proceeds to act in violation of the rules of
natural justice; or proceeds to act under a law which is itself ultra vires or
unconstitutional. Since the basis of the claim for the relief is found not to ex-
ist, the High Court rightly refused the prayer for the issue of a writ of pro-
hibition restraining the Authorities from continuing the proceedings pursu-
ant to the notices issued. As indicated by this Court in State of Uttar Pradesh
v. Brahm Datt Sharma [(1987) 2 SCC 179] when a show cause notice is issued
under statutory provision calling upon the person concerned to show
cause, ordinarily that person must place his case before the Authority con-
cerned by showing cause and the courts should be reluctant to interfere
with the notice at that stage unless the notice is shown to have been issued
palpably without any authority of law. On the facts of this case, it cannot be
said that these notices are palpably without authority of law. In that situa-
tion, the appellants cannot successfully challenge the refusal by the High
Court of the writs of prohibition prayed for by them.”
21. In the case of Commissioner of Customs and Central Excise, Madurai v.
Charminar Nonwovens Limited, reported in 2004 (167) E.L.T. 372 dispute involved
therein was a classification dispute and challenge was made to a show cause no-
tice wherein it is held that the High Court should remit the matter to the con-
cerned authority for adjudication. However, in the case of State of Uttar Pradesh
and Another v. Anil Kumar Ramesh Kumar Chandra Glass Works and Another report-
ed in (2005) SCC 451, the Apex Court carved out an exception that if the facts,
narrated in the show cause notice, are not accepted to be correct; if it can be
demonstrated that offence is not disclosed; or the show cause notice is without
jurisdiction, the Court should not entertain the writ petition under Article 226 of
the Constitution of India in the following words :
“6. In our view, the High Court proceeded on an incorrect basis. Hence,
the decision cannot stand. In any event, this Court had repeatedly held that
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