M/S.Mpm Ventures Private Limited vs. The Additional Commissioner Of Central Tax

Held

The High Court held that the impugned order was not passed in violation of the principles of natural justice. The Court noted that the respondent authority had granted multiple opportunities for personal hearings and a written reply, which the petitioner failed to utilize. Regarding the appreciation of the Managing Director's statement, the Court held that whether the statement was properly or wrongly appreciated is a matter that cannot be scrutinized under Article 226 of the Constitution, especially when a statutory alternative remedy exists. Citing the Supreme Court's decision in State of Madhya Pradesh v. Commercial Engineers & Body Building Co. Ltd., the Court concluded that it should not entertain the writ petition when a statutory appeal under Section 107 of the CGST Act is available. Therefore, the writ petition was rejected solely on the ground of the availability of an alternative statutory remedy, reserving the petitioner's right to avail it. The questions of law raised were left open to be decided by the concerned authorities in appropriate proceedings.

Facts

The petitioner, M/s. MPM Hotels, filed a writ petition challenging an order-in-original dated July 28, 2023, passed by the Additional Commissioner of Central Tax. The petitioner sought to declare the order without jurisdiction, erroneous, and passed in violation of natural justice. They also challenged a prior show cause notice dated March 9, 2022, as vague and contradictory, and certain GST notifications as ultra vires. The petitioner sought a declaration that they are not liable to pay any tax, including CGST and SGST amounting to Rs. 1,78,58,096 each, along with interest and penalties under Sections 74 and 122 of the CGST Act, and penalties under Section 125. The impugned order was passed after the petitioner allegedly failed to file a written reply to the show cause notice for over a year and did not attend personal hearing opportunities, despite multiple adjournments granted by the respondent authority.

Key Issues

1. Whether the order-in-original dated July 28, 2023, passed by the Additional Commissioner of Central Tax, was passed in violation of the principles of natural justice, as argued by the petitioner? The petitioner contended that the order was passed without jurisdiction and in violation of natural justice. The respondents argued, based on paragraph 7 of the impugned order, that the petitioner was granted ample time and multiple opportunities for personal hearings, which they failed to avail. 2. Whether the Additional Commissioner of Central Tax properly appreciated the statement of the Managing Director of the petitioner's establishment, as argued by the petitioner? The petitioner argued that the authority did not properly appreciate their statement. The respondents, through the impugned order, indicated that the statement was considered, but the High Court noted that the correctness of appreciation is not subject to scrutiny under Article 226 when a statutory appeal is available. 3. Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India when a statutory alternative remedy of appeal is available to the petitioner, as per the Supreme Court's decision in State of Madhya Pradesh v. Commercial Engineers & Body Building Co. Ltd.? The petitioner sought to challenge the order directly via writ, while the respondents implicitly relied on the existence of the statutory remedy. The Court's decision hinged on this point.