Concord Tieup PVT. LTD. A Company Incorporated Under The Companies Act 1956 vs. The State Of Madhya Pradesh

Held

The Court held that the impugned order dated 24.08.2022 was not sustainable. The show cause notice dated 22.07.2022, issued under Section 74 of the Act, indicated an intention to provide a personal hearing to the petitioner as required by law. However, the notice failed to specify the date, time, and venue for this hearing, with 'NA' mentioned in the relevant columns. This omission meant that no personal hearing was afforded to the petitioner before the final order was passed. The Court found this to be a violation of the principles of natural justice. Regarding the respondents' argument about the alternative remedy of appeal, the Court held that when a mandatory opportunity of hearing has not been provided, the availability of an alternative remedy does not preclude the High Court from exercising its jurisdiction under Article 226 of the Constitution. Following the precedent set by the Allahabad High Court in Bharat Mint & Allied Chemicals, the Court quashed the impugned order and remitted the matter back to the Deputy Commissioner, Audit Wing, Jabalpur, for fresh adjudication after providing a personal hearing to the petitioner.

Facts

The petitioner, Concord Tieup Pvt. Ltd., challenged an order dated 24.08.2022 passed by the Deputy Commissioner, Audit Wing, Jabalpur, under Section 74 of the MPSGST/CGST Act, 2017 and Section 20 of the IGST Act, 2017. This order upheld the tax, interest, and penalty proposed in a show cause notice dated 22.07.2022. The petitioner argued that the show cause notice mentioned a personal hearing but failed to provide a specific date, time, and venue for it. The respondents supported the impugned order but could not justify the lack of personal hearing, instead arguing for the availability of an alternative remedy of appeal. The High Court considered the submissions and the record.

Key Issues

1. Whether an opportunity of personal hearing is mandatory under Section 75(4) of the CGST/MPSGST Act, 2017, when an adverse decision is contemplated against a person? 2. Whether the impugned adjudication order, passed without affording a proper personal hearing, is sustainable in law and breaches the principles of natural justice? The petitioner contended that Section 75(4) of the Act mandates a personal hearing when an adverse decision is contemplated, as was the case here. They argued that the show cause notice itself indicated an intention to provide a personal hearing, but its omission of date, time, and venue rendered the subsequent order unsustainable, relying on the Allahabad High Court's decision in Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax. The respondents supported the impugned order but failed to justify the lack of personal hearing, arguing instead that the petitioner had an alternative remedy of appeal under the Act, thus precluding interference under Article 226 of the Constitution.