M/S Study Metro Edu Consultant Pvt. Ltd. ... vs Joint Director on 5 August, 2025

Here's a summary of the judgment:

1. Outcome
The Writ Petition was dismissed. The Court clarified that any observations or findings on the merits in the show-cause notice (SCN) are not binding on the adjudicating authority. It also provided an option for the petitioner to request adjudication by an officer of the rank of Additional Commissioner/Joint Commissioner.

2. Core Issue
The core issue was whether a writ petition challenging a show-cause notice (SCN) issued by the Directorate General of Goods & Service Tax Intelligence (DGGSTI) is maintainable, specifically when the SCN is highly exhaustive, contains detailed findings, and is to be adjudicated by a subordinate officer, leading the taxpayer to believe the adjudication process would be a futile exercise due to pre-determination.

3. Key Facts
* The petitioner, M/S Study Metro Edu Consultant Pvt. Ltd., is a GST-registered company providing "Software as a Service" (SaaS) based student recruitment solutions, including overseas advisory services to foreign universities and services to students.
* The petitioner claims that services to students are subject to GST, but services to foreign universities constitute "export of service" under Section 2(6) of the IGST Act, hence not liable for GST.
* The respondents (CGST Department) initiated proceedings alleging that the petitioner's services to foreign universities are "intermediary services" under Section 2(13) of the IGST Act, making them taxable.
* The petitioner was summoned under Section 70 of the CGST Act, provided statements, and submitted a detailed reply denying the services were intermediary.
* Subsequently, a show-cause notice dated 30.09.2023 was issued by the Joint Director, DGGSTI, calling upon the petitioner to appear before the Deputy/Assistant Commissioner, CGST, Division - 4, for adjudication under Section 74 of the CGST Act.
* The petitioner challenged this SCN in a writ petition, arguing that the SCN itself contained pre-determined findings and conclusions, making the adjudication by a subordinate officer a mere formality.

4. Arguments
* Taxpayer (Petitioner):
* The petitioner should not be compelled to face inquiry under Section 74 of the CGST Act.
* Even if the services are deemed intermediary under Section 2(13) of the IGST Act, the place of supply is Indore (India), making it an intra-state supply under Section 8(2) of the IGST Act, implying IGST provisions for inter-state transactions or export cannot be invoked. (This argument implicitly suggests that if it's intermediary, it's a domestic supply, and if it's an export, it's not intermediary, challenging the SCN's premise).
* The SCN, issued by the Joint Director, DGGSTI, is detailed and exhaustive, rejecting all the petitioner's contentions and recording pre-determined findings (e.g., that the petitioner is an agent/intermediary, place of supply is in India, and services are not export).
* Since the issuing authority has already made up its mind, the adjudication by a subordinate Assistant Commissioner would be a futile exercise, rendering the writ petition maintainable against such a premeditated SCN.
* Revenue (Respondents):
* Citing Circular No. 31/05/2018-GST dated 09.02.2018, the Central Tax Officers of DGGSTI are empowered only to issue show-cause notices, while adjudication is carried out by the Central Tax Officer of the Executive Commissionerate in whose jurisdiction the noticee is registered. This addresses the grievance about the 'Proper Officer.'
* Any findings or observations in the show-cause notice are merely prima facie and are not binding on the adjudicating authority. They reflect the application of mind by DGGSTI before initiating Section 74 proceedings, especially since the petitioner raised various issues during the preliminary inquiry.
* A writ petition challenging a mere show-cause notice is generally not maintainable.
* In a gesture of fairness, the respondents offered that if the Court deems it appropriate, the SCN could be adjudicated by an officer of the rank of Additional Commissioner/Joint Commissioner, and a suitable corrigendum would be issued.

5. Court’s Reasoning
* The Court acknowledged the petitioner's apprehension regarding the detailed nature of the SCN and the specific findings recorded by the Joint Director, DGGSTI, potentially influencing the adjudicating authority.
* However, the Court clarified that these findings, while exhaustive, are not final. The extensive nature of the SCN was a result of the detailed enquiry conducted by DGGSTI, where the petitioner submitted documents, replies, and case laws, which the Joint Director appropriately addressed before issuing the SCN.
* The Court highlighted that the Investigating Authority (DGGSTI) and the Adjudicating Authority are distinct entities. The Investigating Authority provides an opinion for issuing the SCN, whereas the Adjudicating Authority is a quasi-judicial body that must adjudicate the matter based on the material on record without being influenced by the observations or findings of the Investigating Authority, even if the latter is superior.
* The Court took note of paragraph 93 of the SCN, which explicitly stated that it was issued "without prejudice to any other action/enquiry."
* The Court also relied on Circular No. 31/05/2018-GST dated 09.02.2018, which clearly demarcates the roles, affirming that the adjudication is to be done by the Executive Commissionerate.
* Considering the respondents' offer to have the matter adjudicated by a higher-ranking officer (Additional/Joint Commissioner), the Court found no sufficient ground to interfere with the SCN or dismiss the proceedings.
* The Court ultimately directed that any observations on the merits within the SCN shall not influence the Adjudicating Authority. It also provided the petitioner the option to apply in writing for adjudication by an Additional Commissioner/Joint Commissioner, in which case a corrigendum would be issued; otherwise, adjudication would proceed as per the Circular.

6. Statutory References
* Article 226 of the Constitution of India
* Companies Act, 2013
* Integrated Goods & Service Tax Act, 2017 (IGST Act):
* Section 2(6) (definition of 'export of service')
* Section 2(13) (definition of 'intermediary services')
* Section 8(2) (place of supply for intra-state supply)
* Central Goods & Service Tax Act, 2017 (CGST Act):
* Section 70 (power to summon persons to give evidence and produce documents)
* Section 74 (determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilful misstatement or suppression of facts)
* Section 74(9)
* Circular No. 31/05/2018 - GST dated 09.02.2018

7. Precedents Cited
* By Petitioner:
* Siemens Limited v/s State of Maharashtra & Others (2006) 12 SCC 33
* Oryx Fisheries Private Limited v/s Union of India & Others (2010) 13 SCC 427
* M/s TRF Limited & Others v/s the Commissioner, Central Excise & Service Tax, Jamshedpur & Others 2013 SCC OnLine Jhar 526
* Ratlam Straw Board Mills Private Limited v/s Commissioner of Sales Tax & Others (1996) 29 VKN - 127
* Filterco & Another v/s Commissioner of Sales Tax, M.P. & Another (2014) 24 STJ 491 (SC)
* Whirlpool Corporation v/s Registrar of Trade Marks, Mumbai & Others (1998) 8 SCC 1
* Mulay Brothers v/s State of Madhya Pradesh & Others [1991] 81 STC 269 (MP)
* Godrej & Boyce Mfg. Co. Ltd. v/s Union of India & Others [2022] 98 GSTR 103 (Bom)
* M/s Godrej Sara Lee Limited v/s The Excise & Taxation Officer - cum - Assessing Authority & Others 2023 SCC OnLine SC 95
* By Respondents:
* Abhishek Mundhra v/s A.D.G., D.G. Of Revenue Intelligence, Chennai 2015 (318) E.L.T. 245 (Mad.)
* KVS Cargo v/s Commissioner of Customs (General), New Delhi 2016 (342) E.L.T. 24 (Del.)
* Creative Infopace Private Limited v/s Additional Commissioner, Chennai 2010 (18) S.T.R. 553 (Mad.)
* Jay Kumar Lohani v/s Commissioner of Central Excise, Indore 2012 (285) E.L.T. (M.P.)