M/S Annapporna Electricals vs. The State Of Madhya Pradesh

Held

The Court held that the writ petition was not maintainable. Regarding the issue of personal hearing, the Court found no violation of Section 75(4) of the GST Act. It reasoned that the provision requires the petitioner to demand a personal hearing, and since the petitioner failed to submit a reply to the show-cause notice, they could not expect a personal hearing to be granted. The Court stated that an opportunity for personal hearing is granted upon request, and failure to file a reply implies no interest in availing such a hearing. The Court also noted that the petitioner did not dispute the order-in-original itself, which was issued under Section 73 in DRC-07 format. Therefore, the legal grounds raised should have been addressed through an appeal under Section 107. As the petitioner did not file an appeal within the limitation period, and delay beyond that is not condonable, the writ petition was dismissed. The Court advised the petitioner to file an appeal with a condonation of delay application before the appellate authority, after which they could approach the GST tribunal. The judgments cited by the petitioner were distinguished as they involved situations where replies were filed, but personal hearings were denied, unlike the present case where no reply was filed.

Facts

The petitioner, M/s Sanjay Paliya Contractor, is a proprietorship firm engaged in construction. Following scrutiny of its GST returns for the year 2020-21, the Assistant Commissioner of State Tax issued a notice (GST ASMT-10) on April 20, 2022, indicating discrepancies and proposing recovery of tax amounting to Rs. 5,75,712/- along with interest and penalty. The petitioner submitted a summary of GSTR-R2 without detailed explanation. Subsequently, a show-cause notice under Section 73 of the GST Act was issued on June 7, 2022, alleging wrong availment/utilisation of input tax credit, with a reply due on July 6, 2022. The petitioner failed to submit a reply. Consequently, the Assistant Commissioner passed an order-in-original on July 28, 2022, confirming a demand of Rs. 5,57,469/- including tax, interest, and penalty. Instead of filing an appeal, the petitioner filed a writ petition before the High Court.

Key Issues

1. Whether the impugned order dated 28.07.2022 is unsustainable due to a violation of the principle of natural justice, specifically the failure to provide an opportunity of personal hearing as mandated by Section 75(4) of the GST Act? 2. Whether there was a violation of Rule 142 of the CGST Rules concerning the uploading of the summary order in FORM GST DRC-07, rendering the order-in-original invalid? Petitioner's Arguments: The petitioner argued that a personal hearing was not provided, violating Section 75(4) of the GST Act and the principles of natural justice, making the order unsustainable. They also contended that Rule 142 of the CGST Rules was violated as the order dated 28.07.2022 was not a proper order-in-original under Section 73, thus precluding an appeal. Reliance was placed on various High Court judgments where orders were quashed for lack of personal hearing. Revenue's Arguments: The respondent argued that the writ petition is not maintainable because the petitioner has an alternative remedy of appeal under Section 107 of the GST Act. They contended that the petitioner failed to avail this remedy within the time limit and that there was no violation of Section 75(4) or Rule 142, as an opportunity for hearing was granted but not availed by the petitioner.