M/S Shiv Ratan Construction vs. The State Of Madhya Pradesh

Held

The Court held that the impugned order dated 06.06.2022, passed by the Assistant Commissioner of State Tax, Hoshangabad, and the notice dated 17.11.2022 were not sustainable. The reasoning was that the show cause notice dated 28.12.2021, while mentioning the intention to provide a personal hearing as required by law, failed to specify the date, time, and venue for such hearing, instead marking them as 'NA'. This omission amounted to a failure to provide the mandatory opportunity of personal hearing, thereby violating the principles of natural justice. The Court found that the availability of an alternative remedy of appeal does not preclude High Court intervention under Article 226 when principles of natural justice are violated. Following the precedent set by the Allahabad High Court in Bharat Mint & Allied Chemicals, the Court quashed the impugned order and notice. The matter was remitted back to the Assistant Commissioner to pass a fresh order after affording the petitioner a proper personal hearing. The writ petition was allowed.

Facts

The petitioner, M/s Shiv Ratan Construction, challenged an order dated 06.06.2022 passed by the Assistant Commissioner of State Tax, Hoshangabad, under Section 74 of the MPSGST/CGST Act, 2017. This order upheld the tax, interest, and penalty mentioned in a show cause notice dated 28.12.2021. The petitioner also challenged a subsequent notice dated 17.11.2022 issued under Section 79(1)(c) of the Act. The petitioner argued that the show cause notice mentioned a personal hearing but failed to provide a specific date, time, and venue, rendering the subsequent order unsustainable due to a breach of natural justice. The respondents supported the impugned order but could not justify the lack of personal hearing, instead arguing for the availability of an alternative remedy.

Key Issues

1. Whether the 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, even if no specific request for hearing is made? (Question of law) Petitioner's contention: The petitioner argued that Section 75(4) mandates a personal hearing when an adverse decision is contemplated. They relied on the fact that the show cause notice itself indicated an intention to provide a personal hearing, but failed to specify the details (date, time, venue), thus breaching the principle of natural justice. They cited the Allahabad High Court's decision in Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax. Respondents' contention: The respondents supported the impugned order but failed to justify the non-affording of personal hearing. They contended that the petitioner had an alternative remedy of appeal, and therefore, the High Court should not interfere under Article 226 of the Constitution of India.