Ashirwad Industries, A Partnership Firm vs. Unio Of INDIA

Held

The Court held that the order dated 31.01.2023 passed by the Joint Commissioner (Appeals) was liable to be set aside because it was passed ex-parte without sufficient proof of proper service of notice on the petitioner. The Court found that there was no concrete evidence on record to demonstrate that the notices of the appeal were duly served upon the petitioner firm, and the order itself did not clearly explain how the personal hearing was provided. Consequently, the Court deemed it just and proper to grant an opportunity to the petitioner to defend the appeal. The Court set aside the order dated 31.01.2023, the show cause notice dated 29.08.2023, the order in original dated 13.12.2023, and the third-party order dated 04.07.2024. Appeal No. 34-GST/2022 was restored, and the appellate authority was directed to decide it afresh after affording a proper opportunity of hearing to the petitioner. The issue of whether M/s. Ashirwad Industries, Ghaziabad and M/s. Ashirwad Industries, Rewa are the same firm or different entities was not decided on merits but was to be considered in the fresh adjudication.

Facts

The petitioner, Ashirwad Industries, a partnership firm registered in UP, supplied goods to a plant in Rewa, MP. A consignment was detained due to an incorrect address on the e-Way bill. A penalty was imposed, which the petitioner paid and subsequently got set aside by an appellate authority in 2020, with directions for refund. The petitioner then obtained MP GST registration and received the refund. The Commissioner, CGST, Jabalpur, reviewed this refund order and directed an appeal against it, arguing the refund was granted to a different GSTIN (MP) than the one that paid the tax and penalty (UP). The appellate authority decided the appeal ex-parte, holding the refund improper and directing recovery. Subsequent recovery proceedings were initiated, leading the petitioner to file this writ petition.

Key Issues

1. Whether the order dated 31.01.2023 passed by the Joint Commissioner (Appeals) is liable to be set aside on the ground that it was passed ex-parte without proper service of notice on the petitioner, thereby violating principles of natural justice, as argued by the petitioner? 2. Whether the petitioner, M/s. Ashirwad Industries, Ghaziabad (UP), and M/s. Ashirwad Industries, Rewa (MP), are distinct entities for the purpose of GST, as contended by the respondent department, relying on Section 25(4) of the CGST Act, 2017? Petitioner's arguments: The petitioner contended that the original penalty was set aside and attained finality, making subsequent actions illegal. They argued that M/s. Ashirwad Industries, Ghaziabad and M/s. Ashirwad Industries, Rewa are not different entities. Crucially, they asserted that no notices were served for the appeal before the Joint Commissioner (Appeals), leading to an ex-parte order and violation of natural justice. They also argued that the refund was not obtained by fraud or misstatement, and the order was based on procedural technicalities. Respondent's arguments: The respondent department argued that the appellate authority acted correctly in setting aside the refund order. They contended that the tax was deposited by M/s. Ashirwad Industries, Ghaziabad (different registration number), while the refund was claimed by M/s. Ashirwad Industries, Rewa (different registration number). They relied on Section 25(4) of the CGST Act, 2017, to argue that these are distinct persons. They also claimed that notices were issued and an opportunity of hearing was provided before the ex-parte decision.