M/S. Ajay Kumar Sharma, Jharsuguda vs. Deputy. Commnr, GST And Central Excise, Jharsuguda

Facts

The petitioner, M/s. Ajay Kumar Sharma, challenged an order in original dated June 24, 2022, passed by the Deputy Commissioner, GST and Central Excise, Jharsuguda. The petitioner sought an opportunity to file a reply to a show-cause notice dated August 16, 2021, stating that the reply could not be filed due to Covid-19 and other reasons. The revenue opposed the writ petition, arguing that an alternative statutory remedy was available and the petition was filed more than two years after the impugned order. The petitioner further clarified that the impugned order was based on income tax return information for FY 2016-17, concerning ₹94,96,605 received for electrical works. The petitioner relied on a notification to argue that the value of works contract should exclude the value of transferred goods and GST.

Held

The Court inclined to grant relief to the petitioner. It directed the revenue to accept the petitioner's reply to the show-cause notice if submitted by September 11, 2024, along with a copy of the order. The revenue was then directed to consider the reply and pass a fresh order. The impugned order dated June 24, 2022, was set aside for this purpose. The Court clarified that if the reply was not submitted by the stipulated date, the impugned order would stand automatically restored. The petitioner undertook to obtain a certified copy of the order. The issue regarding the interpretation of the notification dated March 17, 2012, and its applicability to the taxable value of works contract was not expressly decided on merits but would be considered in the fresh adjudication.

Key Issues

1. Whether the petitioner is entitled to an opportunity to file a reply to the show-cause notice, despite the delay and the existence of an alternative statutory remedy, given the circumstances cited by the petitioner? (Mixed question of law and fact, concerning principles of natural justice and procedural fairness under GST law). Petitioner's arguments: The petitioner contended that due to Covid-19 and other reasons, they were unable to file a reply to the show-cause notice. They sought an opportunity to present their case. They also relied on a notification dated March 17, 2012, to argue that the taxable value of works contract should exclude the value of goods transferred and GST. Revenue's arguments: The revenue argued that an effective alternative statutory remedy was available to the petitioner and that the writ petition was filed more than two years after the impugned order, making it unsustainable.