Gr Infra Projects Limited Ratlam Through Its Authorized Signatory Mr. Bhoori Singh vs. The State Of Madhya Pradesh

Held

The Court held that the writ petition is not maintainable at this stage. It reasoned that the show cause notice (SCN) issued under Section 74 of the CGST Act contains specific allegations of fraud and willful suppression of facts, supported by a 191-page report from an inspection under Section 67 of the GST Act, which details alleged willful evasion of GST amounting to Rs. 1,52,56,431/- for the year 2018-19. The Court distinguished the present case from the Allahabad High Court judgments cited by the petitioner, noting that the SCN in this case does contain specific allegations, unlike those in the cited cases. The Court emphasized that the distinction between Section 73 and Section 74 lies in the period of limitation (3 years vs. 5 years) and the allegations of fraud or willful misstatement. It stated that at the stage of an SCN, the writ court cannot examine whether the proper officer erroneously issued the notice under Section 74 without sufficient reason. The Court also referred to the Supreme Court's decision in *State of Maharashtra & Others v/s Greatship (India) Limited*, which held that High Courts should relegate petitioners to statutory remedies of appeal when available, rather than entertaining writ petitions against assessment orders or SCNs, especially when there are disputed facts. Therefore, the Court dismissed the petition, directing the petitioner to participate in the SCN proceedings.

Facts

The petitioner, GR Infra Projects Limited, is challenging a show cause notice (SCN) dated June 13, 2025, issued by Respondent No. 3, the Assistant Commissioner, State Tax, Anti-Evasion Bureau, Indore-B, Madhya Pradesh. The SCN demands tax of Rs. 1,52,56,431/- for the period 2018-19, alleging evasion of tax through fraud or willful misstatement. This followed an intimation under Rule 142(1A) in Form DRC-01A issued on April 29, 2025. The petitioner had previously filed preliminary objections regarding the validity of the proceedings, including the non-supply of a draft notice. The petitioner contends that the allegations of fraud and willful evasion are vague and that the SCN should have been issued under Section 73 due to the absence of such specific allegations, making the current proceedings time-barred under Section 74's five-year limitation period.

Key Issues

1. Whether the Show Cause Notice dated 13.06.2025, issued under Section 74 of the CGST Act read with MPGST Act, is liable to be quashed and set aside on the ground that the allegations of fraud and willful misstatement are vague and lack specific details, rendering the proceedings time-barred under Section 74 as opposed to Section 73? Petitioner's Arguments: - The allegations of fraud and willful evasion are vague and lack specific details, making the SCN unsustainable in law. - In the absence of material indicating fraud and willful evasion, the notice should have been issued under Section 73, which has a limitation period of 3 years, not Section 74 with a 5-year limitation period. - Relied on *Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur* for the principle that the burden of proof for mala fide conduct lies with the Revenue and specific averments are mandatory. - Relied on *Hcl Infotech Ltd. Vs. Commissioner, Commercial Tax* and *Varanasi Sangam Expressway Pvt. Ltd. Vs. Commissioner of State Tax* (Allahabad High Court decisions) where similar SCNs were quashed for lacking allegations of fraud, willful misstatement, or suppression of facts. Respondent's Arguments: - The writ petition is not maintainable as the petitioner has already filed a reply to the SCN and can raise all grounds before the proper officer. - After the order-in-original, the petitioner has statutory remedies of appeal under Section 107 of the MPGST Act and further appeal to the GST Appellate Tribunal.