Section 174 of the CGST Act, 2017 — Show Cause Notice – The Association of Textile Processors is aggrieved that the respondent department has been issuing SCNs indiscriminately under the proviso to Section 73(1) of the Finance Act, 1994 read with Section 174 of the Act, 2017 on an erroneous assumption that the Company concerned is engaged in providing textile services under the provisions of the Finance Act, 1994. The counsel for the petitioner submitted that none of the members of the Association could be said to be engaged in providing textile services. The court observed that they could have rejected application outright asking each of the members of the Association who are in receipt of such SCNs to file an appropriate reply before the authority, but the same would not have put an end to the harassment that may be caused unnecessarily. The court asked from respondents  as to how did they come to know that the applicants are engaged in providing textile services.

Held that:- The Hon’ble High Court issued notice to the respondents, returnable on 27th January, 2022.