The High Court of Gujarat, while validating the Rule 142(1)(a) of the CGST Rules, 2017 is valid and does not conflict with any of the provisions of the Central Goods and Services Tax Act, 2017 held that where a specific power is conferred without prejudice to the generality of the power already specified, the particular power is only illustrative and it did not in any way restrict the general power.
The writ applicant, M/s Mahavir Enterprise seeks to challenge the legality and validity of the show cause notice issued by the respondent authority under Section 122(1) of the Central Goods and Services Tax Act, 2017 calling upon the writ applicant to show cause why an amount of Rs.6,87,68,821/ should not be recovered for the alleged contravention of the provisions of the Act and the Rules.
Prima facie, it appeared on a plain reading of the impugned show cause notice that it is the case of the department that the writ applicant is involved in bogus billing transactions without any physical movement of the goods.
The writ applicant has come seeking to get the impugned show cause notice quashed and set aside.
The applicant has further challenged the constitutional validity of Rule 142(1)(a) of the CGST Rules on the ground that the same travels beyond the provisions of the Act and is a result of excessive delegation of powers.
The division bench headed by Chief Justice Vikram Nath in the view of the decision of the Supreme Court held that Rule 142(1)(a) of the CGST Rules, 2017 is valid and does not conflict with any of the provisions of the Central Goods and Services Tax Act, 2017.
“The challenge to the legality and validity of the show cause should fail to have regard to the scope of judicial review and the challenge to the validity of Rule 142(1)(a) of the Rules should also fail,” the bench said.