Ankesh Kumar vs. The Union Of INDIA

Held

The Court dismissed the writ application. The Court noted that the petitioner failed to file replies to the intimation (DRC-01A), show cause notice (DRC-01), and reminder issued by the respondent authorities. Consequently, the impugned order dated August 29, 2024, was passed. Regarding the opportunity for personal hearing under Section 75(4) of the BGST/CGST Act, 2017, the Court, relying on a previous Patna High Court judgment in M/s. Barhonia Engicon Private Limited v. The State of Bihar, held that such an opportunity is available only to taxpayers who submit a reply to the show cause notice. Since the petitioner did not submit a reply, they were not entitled to a personal hearing. Furthermore, the Court found that the petitioner had failed to avail the alternative remedy of appeal under Section 107 of the BGST/CGST Act, 2017, and had filed the present writ application after an inordinate delay of approximately 24 months. Citing judgments of the Supreme Court and this Court, the Court held that entertaining a writ application filed after such a significant unexplained delay, despite the existence of a statutory remedy, would frustrate the legislative intent and render the statutory scheme otiose. Therefore, the writ application was not entertainable and was dismissed.

Facts

The petitioner, Ankesh Kumar, filed a writ petition challenging an adjudication order (Form GST DRC-07) dated August 29, 2024, issued under Section 73 of the BGST/CGST Act, 2017. This order raised a demand of Rs. 14,63,236/- for the financial year 2019-20 (April 2019 to March 2020), comprising tax, interest, and penalty. The petitioner argued that the demand was based solely on Form 26AS information and Section 194C, without independently determining the nature, classification, or taxability of transactions. The petitioner also challenged consequential recovery proceedings, including bank attachment under Section 79, and alleged violations of natural justice and statutory provisions regarding notice and opportunity to be heard. The petitioner claimed that the receipts reflected in Form 26AS pertained to milk collection, chilling, preservation, transportation, and supply for Daya Society, which were not taxable supplies as per relevant notifications.

Key Issues

1. Whether the impugned adjudication order dated 29.08.2024, passed under Section 73 of the BGST/CGST Act, 2017, is liable to be quashed for being founded solely on Form 26AS/Section 194C information without independent determination of the nature, classification, exemption, and taxability of the transactions? 2. Whether the receipts reflected in Form 26AS can be treated as taxable outward supplies without examining books of account, invoices, agreements, recipient confirmation, exemption notifications, and the real nature of supplies? 3. Whether the transactions related to milk collection, chilling, preservation, transportation, and supply for Daya Society could be mechanically treated as taxable turnover without considering Notification No. 2/2017-Central Tax (Rate) and Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017? 4. Whether the impugned order and consequential recovery proceedings are violative of Section 169 of the BGST Act, 2017, principles of natural justice, and Articles 14, 19(1)(g), and 300A of the Constitution of India, due to non-service/non-communication and lack of effective opportunity? Petitioner's Arguments: The petitioner contended that the demand was arbitrary, based on a mechanical comparison of Form 26AS and GST returns, without proper inquiry into the nature of supplies, applicable exemptions, or recipient confirmation. They argued that the authorities failed to consider relevant exemption notifications and did not conduct independent inquiries. Furthermore, the petitioner claimed that notices and orders were not effectively served as per Section 169, and personal hearing was denied, violating principles of natural justice. They also argued that the limitation period for appeal had lapsed due to non-communication, justifying the writ petition, and relied on various High Court judgments regarding proper inquiry and opportunity to be heard. Respondent's Arguments: The respondent department argued that the petitioner failed to file replies to the intimation (DRC-01A), show cause notice (DRC-01), and reminder. They asserted that the opportunity for personal hearing under Section 75(4) is available only to those who submit a reply to the show cause notice. The department also highlighted that the writ petition was filed after an unexplained delay of approximately 24 months, and the existence of an alternative statutory remedy (appeal under Section 107) should bar the entertainment of the writ petition, citing Supreme Court judgments on delayed writ petitions and the importance of statutory remedies.