M/S Sai Rubber Works Through Its Proprietor Shashikant Vishwanath Bherde vs. The State Of Madhya Pradesh

Held

The Court held that the appeal filed by the petitioner before the appellate authority was indeed time-barred. As per Section 107 of the SGST Act, an appeal can be filed within three months, with a further condonable period of one month, making the outer limit four months. The impugned order was dated 02-07-2019, and the appeal was filed on 16-12-2019, significantly beyond the four-month limit. The appellate authority correctly noted that it lacked the power to condone delays beyond this period. Regarding the violation of natural justice, the Court observed that while principles of natural justice are flexible, the appellate authority had considered the petitioner's written submissions, especially in the context of the COVID-19 pandemic, which was deemed a sufficient compliance. Furthermore, the Court noted that even if there was a procedural violation, it did not cause prejudice to the petitioner, as the merits of the case were also considered by the authorities below in reaching the conclusion of tax evasion. The Court found no illegality or perversity warranting interference under Article 226/227 of the Constitution. The petition was dismissed.

Facts

The petitioner, M/s Sai Rubber Works, engaged in manufacturing rubber products, inadvertently generated a Tax Invoice for goods destined for Madhya Pradesh in the name of its Uttar Pradesh registered unit. During transit, the goods and the transporter's vehicle were detained by Respondent No. 3, the Joint Commissioner, Anti Evasion Bureau, Gwalior. The detention was based on the discrepancy between the place of supply in the E-way bill (Jhansi, UP) and the actual location of seizure (Morena, MP), leading to a penalty order dated 02-07-2019. The petitioner's appeal filed on 16-12-2019 before the appellate authority was dismissed for being time-barred and on merits. The petitioner then filed a writ petition challenging both orders.

Key Issues

1. Whether the detention and imposition of penalty under Section 129 of the CGST Act were illegal, given that the petitioner possessed all required documents and the error in the E-way bill was a procedural mistake without fraudulent intent or gross negligence, as argued by the petitioner citing Section 68 of the SGST Act, Rule 138A of the CGST Rules, and Section 126(1) of the CGST Act? 2. Whether the appellate authority violated the principles of natural justice by passing the order dated 28-11-2020 without providing an opportunity for a personal hearing to the petitioner? Petitioner's arguments: The petitioner contended that Section 129 of the CGST Act was not invocable as all necessary documents were carried, and the E-way bill error was minor and unintentional, falling under Section 126(1) of the CGST Act, supported by a circular dated 14-09-2018. They also argued a violation of natural justice due to the lack of a personal hearing. Revenue's arguments: The State argued that the discrepancy in the E-way bill clearly invoked Section 129 of the CGST Act, as no distinction is made between clerical and inadvertent errors. They asserted that the driver's statement indicated delivery at Morena, not Jhansi, and that sufficient opportunity was given before the initial order. Regarding the appeal, they stated it was dismissed due to delay, as it was filed beyond the stipulated period under Section 107 of the SGST Act, and the appellate authority had no power to condone further delay.