M/S Modern Steel vs. Additional Commissioner And Another

Held

The Court addressed two primary issues. Firstly, regarding the opportunity of personal hearing under Section 75(4), the Court noted that the petitioner did not file a reply to the show cause notice. Therefore, neither a request for hearing was made nor an explanation furnished. The Court distinguished the petitioner's cited cases (M/s Mohan Agencies and M/s Viswkarma Furniture) where replies were filed but personal hearings were denied. Consequently, the Court held that Section 75(4) was not attracted in this instance, and the petitioner's argument on this point was not accepted. Secondly, concerning the limitation period for appeal, the Court acknowledged the GST Council's decision to extend the period under an amnesty scheme. While the Appellate Authority correctly dismissed the appeal as time-barred based on the statute, the Court, in light of the amnesty scheme, decided to remand the matter. The Appellate Authority is directed to re-examine the question of limitation considering the provisions of the 52nd GST Council Meeting and pass an appropriate order. The notice and the consequential order dated 22.03.2022 were not interfered with, but the appellate order was set aside to the extent of remand.

Facts

M/s Modern Steel (petitioner) is challenging a notice dated 17.02.2022, an order dated 22.03.2022, and an appellate order dated 11.08.2023. The dispute pertains to the period of June 2019 and Financial Year 2019-20. A notice under Section 74(1) of the UPGST/CGST Act was issued, to which the petitioner did not reply. Consequently, an order under Section 74(9) imposing penalty and interest was passed. The petitioner's subsequent appeal before the appellate forum was dismissed solely on the grounds of being time-barred. The petitioner is a proprietorship firm dealing in MS Angle and steel items.

Key Issues

1. Whether an opportunity of personal hearing, as mandated by Section 75(4) of the Act, should have been granted to the petitioner before the final order was passed by respondent No.2 in proceedings under Section 74? 2. Whether the period of limitation for filing the appeal was extended pursuant to the 52nd Meeting of the GST Council held on 7th October, 2023, and if this benefit should be extended to the petitioner? Petitioner's arguments: The petitioner contended that no opportunity of personal hearing was provided, relying on decisions in M/s Mohan Agencies, M/s Viswkarma Furniture, and Bharat Mint & Allied Chemicals. They also argued that the Appellate Authority erred in rejecting the appeal due to delay, citing the GST Council's decision to extend the appeal filing period under Section 107 of the CGST Act until 31st January 2023 for orders passed under Section 74 before 31st March 2023. Respondent's arguments: The Standing Counsel argued that the CGST Act is a special statute with an inbuilt mechanism, implicitly excluding the Limitation Act. They relied on the Kerala High Court's decision in Penuel Nexus Pvt. Ltd. and the Apex Court's judgment in Commissioner of Customs & Central Excise vs. M/s Hongo India (P) Ltd. & Anr., asserting that delay cannot be condoned once the statutory period expires. They also pointed out that the grounds for delay were not valid.