M/S Om Shiv Shakti Traders vs. The Union Of INDIA

Held

The Court held that the petitioner's reply in Form ASMT-11 was vague and did not address the specific discrepancies pointed out by the revenue department regarding the e-way bill data versus the declared returns. The Court found that the notices, including the show cause notice in Form DRC-01 and subsequent reminders, were duly communicated to the petitioner through electronic means (email and SMS) to their registered contact details, as evidenced by GSTN records. Therefore, the Court concluded that the petitioner was aware of the proceedings and had access to the notices and orders via the GST Portal. The Court further held that since the petitioner failed to submit an effective reply to the show cause notice, the respondent authority was not obligated to issue a notice under Section 75(4) of the CGST Act for a personal hearing. The Court also noted that the petitioner had approached the court after a significant delay. Consequently, the Court found no viable reasons to interfere with the ex-parte assessment order dated January 31, 2025, and the appellate order dated March 9, 2026. The writ application was dismissed.

Facts

The petitioner, M/s Om Shiv Shakti Traders, is challenging an ex-parte assessment order dated January 31, 2025, passed by the Deputy Commissioner State Taxes, Samastipur Circle, creating a tax, interest, and penalty liability of Rs. 16,63,384/- for the period 2020-21. The petitioner also challenges the appellate order dated March 9, 2026, which rejected their appeal on grounds of a 301-day delay. The petitioner claims they were denied an opportunity for personal hearing under Section 75(4) of the CGST Act. The revenue department contends that the petitioner failed to reconcile e-way bill data (aggregating Rs. 51,33,913/- with Rs. 9,23,847/- tax) with their declared NIL liability in GSTR-1 and GSTR-3B, despite receiving notices and reminders electronically.

Key Issues

1. Whether the ex-parte assessment order dated January 31, 2025, passed by the Deputy Commissioner State Taxes, Samastipur Circle, is liable to be quashed on the ground of denial of an opportunity of personal hearing under Section 75(4) of the CGST Act, 2017? Petitioner's argument: The petitioner contends that they were not granted an opportunity for personal hearing, violating Section 75(4) of the CGST Act, and that the ex-parte assessment order is therefore bad in law. They also argue that their reply in Form ASMT-11 was sufficient and that the subsequent show cause notice and reminders were not properly communicated. Revenue's argument: The revenue department argues that Section 75(4) is applicable only when a reply has been submitted and an adverse decision is contemplated, or when a request for personal hearing is received. They assert that the petitioner's reply was evasive and that notices and reminders were duly communicated electronically via email and SMS to the registered details, as evidenced by GSTN records. They also argue that the petitioner approached the court with unclean hands and suppressed material facts. 2. Whether the appellate order dated March 9, 2026, rejecting the petitioner's appeal on grounds of delay is sustainable? Petitioner's argument: The petitioner argues that the appellate authority rejected their appeal mechanically without considering the merits and without providing an opportunity for personal hearing, thereby reaffirming the demand order by default. Revenue's argument: The revenue department argues that the appeal was belated by almost one year, and the High Court, like the appellate authority, has limited power to condone delay (one month as per a cited judgment). They also contend that the petitioner deliberately avoided submitting a substantive reply to the show cause notices.