M/S Indermani Mineral INDIA Private Limited vs. State Of Chhattisgarh
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The petitioner, M/s Indermani Mineral India Private Limited, a supplier of coal and provider of Goods Transport Agency Services, challenged an order dated 08.04.2024 passed by the Joint Commissioner of State Tax, Raipur. This order confirmed a tax demand of INR 42,73,78,516/-, interest of INR 46,15,68,818/-, and penalty of INR 4,27,37,852/- for the Financial Year 2018-19. The petitioner contended that the Joint Commissioner issued two show cause notices (SCN-1 and SCN-2), with SCN-2 containing new allegations. The petitioner argued that their detailed reply to SCN-2 on 08.04.2024 was not considered, and the order was passed on the same day without a proper hearing, violating principles of natural justice. The State argued that the petitioner had efficacious alternative remedies under Sections 107 and 109 of the Chhattisgarh Goods & Services Tax Act, 2017, and Rules 108 and 109 of the Chhattisgarh Goods and Services Tax Rules, 2017, which were suppressed.
Held
The Court held that the petitioner's plea regarding the violation of principles of natural justice was not correct, as the perusal of documents indicated that the reply filed on 08.04.2024 was duly considered by the Assessing Authority, and a proper opportunity of hearing was provided prior to the impugned order. The Court found the judgments relied upon by the petitioner to be of no help in this context. Citing the Supreme Court's decision in Assistant Commissioner of State Tax & Ors. Versus M/s Commercial Steel Limited, which emphasized the availability of statutory remedies under Section 107 of the CGST Act and held that it was not appropriate for the High Court to entertain a writ petition when such remedies exist, the Court was not inclined to entertain the present writ petition. However, the Court granted liberty to the petitioner to file an appeal before the concerned appellate authority within 30 days from the receipt of the order, with the appellate authority to decide it on merits without raising objections to limitation.
Key Issues
1. Whether the impugned order dated 08.04.2024 passed by the Joint Commissioner of State Tax, Raipur, is liable to be set aside for violation of principles of natural justice and procedural fairness, specifically for not considering the petitioner's reply and not providing an adequate opportunity of hearing, as argued by the petitioner? 2. Whether the writ petition is maintainable before this Court, or should the petitioner be relegated to the statutory alternative remedies available under the Chhattisgarh Goods & Services Tax Act, 2017, as argued by the State? Petitioner's Contentions: The petitioner argued that the Joint Commissioner passed the order on the same day as receiving their detailed reply to SCN-2, without considering it, and without providing an opportunity for a hearing or demanding further documents. This violated principles of natural justice and procedural fairness. They relied on decisions in Netcore Solution Pvt. Ltd v. Union of India, Sree Constructions v. Assistant Commissioner (ST) and Ors, and Basheer Bags v. Deputy State Tax Officer-2. State's Contentions: The State contended that the petitioner had statutory efficacious alternative remedies under Sections 107 and 109 of the CGST Act and Rules 108 and 109 of the CGST Rules, which were suppressed. They argued that the petition was not maintainable as the petitioner directly approached the High Court without exhausting these remedies. They also claimed that the petitioner failed to submit explanations despite opportunities and that the order was passed after due assessment and consideration of replies.
Sections Cited
Section 107, Section 109, Rule 108, Rule 109
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
CAV Order
The petitioner has challenged the order dated 08.04.2024 passed by the Joint Commissioner of State Tax, Raipur Division 01, Civil Lines, Raipur (CG)
2 whereby confirming the tax demand of INR 42,73,78,516/- and levying interest of INR 46,15,68,818/- and penalty of INR 4,27,37,852/-.
Learned counsel for petitioner would submit that the Petitioner is a bulk supplier of a wide range of coal and is engaged in catering to the diversified needs of various industrial sectors throughout the southern and central part of India covering Cement Plants, Power Generation Plants, Steel Mills, etc. via their industrial products dealing and also provides Goods Transport Agency Services. On 21.11.2023, Respondent No. 2 issued FORM ASMT-10 Notice to the Petitioner, pointing out discrepancies in the GST return following scrutiny of the GST Monthly & Annual Returns for the Financial Year 2018-19. Subsequently, on 26.12.2023, Respondent No. 2 served Show Cause Notice-1 (SCN-1) through FORM GST DRC-01 for FY 2018-19, alleging tax, interest, and penalty based on the identified discrepancies. The Petitioner requested a 30-day extension to reply to Show Cause Notice-1 (SCN-1) on 25.01.2024. On 23.02.2024, the Petitioner responded to SCN-1 in detail, providing all necessary evidence, documents, and reconciliations. Despite this, on 19.03.2024, Respondent No. 2 issued another Show Cause Notice-2 (SCN-2) for FY 2018-19 via FORM DRC-01, which included new allegations not mentioned in SCN-1 or the ASMT-10 Notice. The Petitioner sought a one-week adjournment on 28.03.2024 to respond to SCN-2 due to the year-end closing of accounts. A detailed reply was submitted on 08.04.2024 against SCN-2. However, Respondent No. 2 passed an order on the same day without considering the Petitioner's reply and without providing an opportunity for a hearing or without demanding details/documents for forming an opinion against the Petitioner, confirming the demand based on both SCN-1 and SCN-2, thus violating principles of natural justice and procedural fairness. It would further submit that since no opportunity of hearing was given, the matter was to be remanded back to the Assessing Authority as it came to be passed in violation of the principles of natural justice. In support of his contention, he relied upon decisions of various High
3 Courts i.e. Netcore Solution Pvt. Ltd v. Union of India 2024 (5) TMI 967, Sree Constructions v. Assistant Commissioner (ST) and Ors 2022(4) TMI 350, Basheer Bags v. Deputy State Tax Officer-2 (2024) 1 TMI 110. 3. Per contra learned Counsel for the State would submit that that the petitioner had statutory efficacious alternative remedies available to him which is suppressed by the petitioner in his petition at para 5 of the petition. It is respectfully submitted that the present petition as framed and filed by the petitioner is not maintainable and therefore the same deserves to be dismissed as the petitioner has directly rushed to this Hon'ble Court without exhausting the statutory efficacious alternative remedy of approaching the competent authority against the order impugned i.e. before the Additional Commissioner, State Tax, Chhattisgarh and thereafter before the Appellate Tribunal as per the provisions of section 107 & 109 of the Chhattisgarh Goods & Services Tax Act, 2017 and Rule 108 & 109 of the Chhattisgarh Goods and Services Tax Rules, 2017. It would further submit that despite the opportunities dated 20/11/2023 and issuance of SCN dated 26/12/2023 and further clarificatory letter dated 19/03/2024 the petitioner failed to submit his explanation and supporting documents with respect to GST Annual Returns (GSTR-9 & 9C) for the Financial Year 2018-19 and time and again sought for adjournment and accordingly after due assessment and going through all the replies filed by the petitioner the order impugned dated 08/04/2024 Annexure-IX has been issued wherein the petitioner has been issued with the tax, interest and penalty of Rs. 93,16,85,186/- (Ninety-Three Crores Sixteen Lakhs Eighty-Five Thousand One Hundred and Eighty-Six).
I have heard learned counsel for the parties and perused the documents placed on record with utmost circumspection.
From the perusal of the documents filed with the writ petition and order dated 08.04.2024, it is very much clear that the reply filed by the petitioner on 08.04.2024 has been duly considered by the Assessing Authority and prior to the passing of the impugned order the Assessing Authority has provided the 4 proper opportunity of hearing to the petitioner, therefore the plea taken by the petitioner in the instant writ petition is not correct and judgments relied by the petitioner are no help to him.
In the case of Assistant Commissioner of State Tax & Ors. Versus M/s Commercial Steel Limited reported in 2021 (7) SCR 660 the Hon’ble Apex Court has observed that respondents therein had a statutory remedy under Section 107 of CGST Act. Relevant paras are reproduced herein below:-
In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent.
For the above reasons, we allow the appeal and set aside the impugned order of the High Court. The writ petition filed by the respondent shall stand dismissed. However, this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has been adopted by the state in the present case.
The arguments which have been advanced by the learned counsel for the petitioner are very well to him while filing for statutory appellate remedy. Therefore, looking to the facts and circumstances of the case and the arguments advanced herein above, this Court, at this stage, is not inclined to entertain this petition. However, this Court is inclined to grant liberty to the petitioner to file an appeal before the concerned appellate authority according to the provisions of the Act, within 30 days from the date of receipt of a copy of this order and the same shall be decided by the appellate authority in 5 accordance with law within a reasonable period of time without raising objection to limitation.
With the aforesaid observation(s) and direction(s), the writ petition stands disposed of. (Ravindra Kumar Agrawal) Judge sagrika SAGRIKA AGRAWAL AGRAWAL Date: 2025.04.07 18:44:55 +0530
Reproduced from the public record of the Chhattisgarh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.