M/S Prem Motors PVT. LTD. Through Its Authorised Signatory Tulsiram Vidhiya vs. Union Of INDIA

Held

The Court held that all grounds raised by the petitioner challenging the order on merits are available to be raised before the appellate authority. The statutory remedy of appeal cannot be bypassed merely due to the requirement of depositing 10% of the recovery amount. The Court noted that if the assessing officer did not consider the documents, the appellate authority can do so, and any amount deposited would be refunded if the petitioner succeeds. The appellate authority is also empowered to examine the conduct of subordinate officers. The Court observed that the petitioner had only filed the annual return and reconciliation statement before the High Court, and the supporting documents for the figures therein needed to be examined by the assessing or appellate authority, not the writ court. Therefore, the petition was dismissed with liberty to file an appeal.

Facts

The petitioner, M/s Prem Motors Pvt. Ltd., a registered dealer under the GST Act, is challenging an order dated 3/5/2024 passed by the Additional Commissioner, CGST and Central Excise, Bhopal. The dispute pertains to the tax period 1/4/2017 to 31/3/2018. A mismatch was found between the petitioner's annual return (GSTR-9) and its reconciliation statement (GSTR-9C), showing an un-reconciled turnover of Rs. -80,41,18,618.19. The petitioner's explanation that GST/Excise tax was included in the turnover was deemed unsatisfactory. Consequently, a show cause notice under Section 74 of the CGST Act was issued, leading to a demand and recovery of GST amounting to Rs. 40,24,49,457/-, along with interest and a penalty of Rs. 40,24,49,457/-.

Key Issues

1. Whether the petitioner was denied a proper opportunity of personal hearing as required under Section 75(4) of the CGST Act, 2017, when an adverse decision was contemplated by the Additional Commissioner? 2. Whether the writ petition is maintainable before the High Court despite the availability of a statutory appeal remedy under Section 107 of the CGST Act, 2017, given the alleged financial burden of depositing 10% of the demand for appeal? Petitioner's arguments: The petitioner contended that the amount of CGST was mistakenly included in the annual turnover, contrary to the definition of 'turnover' in the CGST Act. They argued that although they did not explicitly demand a personal hearing after submitting written explanations, an opportunity should have been granted as per Section 75(4) if the authorities were not satisfied. They also submitted that filing an appeal would impose a heavy financial burden due to the pre-deposit requirement. Revenue's arguments: The respondents argued that the writ petition is not maintainable due to the availability of an alternative statutory remedy of appeal. They asserted that the Additional Commissioner had considered the petitioner's explanation and rejected it with cogent reasons, observing a lack of substantial documentary evidence. They relied on Supreme Court decisions stating that while an alternative remedy is not an absolute bar to writ jurisdiction, it should generally be availed unless exceptional circumstances like breach of natural justice or excess of jurisdiction exist.