Ms Kemford Healthcare Private Limited vs. The Union Of INDIA

Held

The Court held that the writ application was not maintainable due to the availability of an alternative statutory remedy under Section 107 of the CGST/BGST Act, 2017. The Court noted that the petitioner had not availed this remedy and had filed the writ petition after an inordinate delay of approximately 20 months from the date of the impugned order. Relying on its previous judgment in CWJC No. 6180 of 2026 (M.K. Traders Vrs. State of Bihar and Ors.) and the Supreme Court's decision in ACST Vrs. M/s Commercial Steel Ltd., the Court opined that entertaining a writ petition filed after such a significant delay would frustrate the legislative intent and render the statutory scheme otiose. The Court found that the respondent department had considered the petitioner's reply and that the petitioner had opted for no personal hearing. Therefore, the Court dismissed the writ petition, leaving the petitioner to pursue their appellate remedy if permissible within the law.

Facts

The petitioner, MS Kemford Healthcare Private Limited, filed a writ petition challenging an order dated 30.08.2024 passed by the Joint Commissioner of State Tax, Patna City West, demanding Rs. 15,56,592/- for tax, interest, and penalty for the period 2019-20. The petitioner also sought to quash a notification extending the time limit under Section 73(10) of the CGST/BGST Act, 2017, and a show cause notice dated 29.05.2024. The show cause notice alleged short payment of tax liability and excess claim of Input Tax Credit (ITC). The petitioner submitted a reply on 29.08.2024, seeking a personal hearing. The respondent department contended that the petitioner had opted for no personal hearing and that an alternative remedy of appeal under Section 107 of the CGST/BGST Act, 2017, was available but not availed within the statutory period, leading to a delay of approximately 20 months in filing the writ petition.

Key Issues

1. Whether the impugned order dated 30.08.2024, demanding Rs. 15,56,592/- for tax, interest, and penalty for the period 2019-20, passed under Section 73(9) of the CGST/BGST Act, 2017, is liable to be quashed on grounds of violation of principles of natural justice, specifically the denial of a personal hearing and non-consideration of the petitioner's reply. 2. Whether Notification No. 56/2023 dated 28.12.2023, extending the time limit specified under Section 73(10) of the CGST/BGST Act, 2017, is valid. Petitioner's Arguments: The petitioner argued that the impugned order was passed without due consideration of its reply and without affording an opportunity for a personal hearing, thus violating principles of natural justice. The petitioner also sought to challenge the validity of the notification extending the time limit. Respondent's Arguments: The respondent department argued that the petitioner had a statutory remedy of appeal under Section 107 of the CGST/BGST Act, 2017, which was not availed. They contended that the writ petition was filed after an inordinate delay of approximately 20 months, circumventing the limitation period. Regarding the notification, the respondent cited a previous judgment of the Patna High Court in M/S Barhonia Engicon Pvt. Ltd. Vrs. The State of Bihar, which held a similar notification to be intra vires. The respondent also claimed that the petitioner had opted for no personal hearing as per their reply.