M/Sfuture Consumer Limited vs. The State Of Madhya Pradesh

Held

The Court held that the petitioner's case was distinguishable from the precedent relied upon (M/s Technosys Security System Pvt. Ltd.). The Court reasoned that while Section 75(4) of the GST Act mandates an opportunity of hearing when a request is received in writing or an adverse decision is contemplated, the opportunity for personal hearing can only be claimed if the person appears before the authority and makes a request. In the present case, the petitioner admittedly did not appear before the authority after receiving the show-cause notice, nor did they file a reply or make any request for a personal hearing. Therefore, the petitioner could not subsequently allege that an opportunity of hearing was denied. The Court found that the petitioner had chosen not to engage with the proceedings at the appropriate stage. Consequently, the writ petition was dismissed. The petitioner was granted liberty to file an appeal before the Appellate Authority on merits, along with an application for condonation of delay.

Facts

The petitioner, M/s Future Consumer Limited, filed a writ petition challenging an order dated 24.08.2023 passed by the Deputy Commissioner, State Tax, Circle-14, Indore, under Section 73 of the GST Act. This order imposed a tax liability of Rs. 86,73,188/-, along with interest and penalty, totaling Rs. 1,16,65,438/-. The petitioner did not avail the statutory remedy of appeal. Instead, they approached the High Court, relying on a previous Division Bench judgment in M/s Technosys Security System Private Limited V/s Commissioner, Commercial Taxes. The petitioner contended that they were entitled to a personal hearing as per Section 75(4) of the GST Act. The respondents argued that the petitioner's case was distinguishable as they had not filed a reply to the show-cause notice nor appeared before the authority, unlike the petitioner in the cited case.

Key Issues

1. Whether the petitioner is entitled to a personal hearing under Section 75(4) of the GST Act, despite not filing a reply to the show-cause notice or appearing before the authority, thereby rendering the impugned order unsustainable? Petitioner's contention: The petitioner argued that the Division Bench of this Court in M/s Technosys Security System Pvt. Ltd. V/s Commissioner, Commercial Taxes had held that a personal hearing is mandatory under Section 75(4) of the GST Act. Consequently, proceedings where this opportunity was denied were set aside and remitted. The petitioner sought similar relief, asserting their right to a personal hearing. Revenue's contention: The State contended that the petitioner was not entitled to similar relief because, unlike the M/s Technosys case where a reply was filed but a personal hearing was denied, the petitioner in this case did not file any reply to the show-cause notice and did not appear before the competent authority. The State argued that an opportunity for personal hearing can only be claimed if the assessee appears and requests it.