The Madhya Pradesh High Court has held that the GST order cannot be challenged citing no personal hearing if hearing was not requested after receipt of Show Cause Notice (SCN).
The bench of Justice Vivek Rusia and Justice Binod Kumar Dwivedi has observed that Section 75(4) of GST Act says that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with the tax or penalty or any adverse decision is contemplated against such person. The opportunity of hearing means persons opportunity of hearing and if such personal opportunity of hearing is not provided then the order is unsustainable and liable to be set aside.
Table of Contents
Background – No Personal Hearing
The petitioner/assessee is a Public Limited company having its presence in the address mentioned in the memo of parties above. Petitioner is a Food led – FMCG brand engaged in the business of branding, manufacturing, processing, selling and distribution of consumer products. The Petitioner’s product categories include food, home care, personal care and beauty.
The Petitioner is registered with GST Deputy Commissioner State Tax, Circle -14, Indore is the jurisdictional authority who has been empowered to adjudicate the case of petitioner pertaining to Goods and Services Tax matters. The Commissioner of State Tax, having its jurisdiction over petitioner for Goods and Service Tax matters.
The Finance Department, State of Madhya Pradesh having their jurisdiction over petitioner to exercise its legislative power to make laws for the whole or any part of the territory in Madhya Pradesh.
The respondent served the notice in form GST ASMT-10 dated 26.06.2023 to the petitioner intimating discrepancies in the return after the scrutiny, the petitioner was directed to explain the reasons for the said discrepancies.
The petitioner did not appear before the authority, therefore, a show-cause notice under Section 73(1) of GST Act dated 24.08.2023 was issued directing the petitioner to appear on 25.09.2023. The petitioner neither appeared nor filed the reply hence, the final order dated 30.10.2023 was passed.
The petitioner did not prefer any appeal within the period of limitation and directly approached this Court by way of writ petition solely on the ground that the opportunity of personal hearing as contemplated under Section 75(4) of GST Act has not been afforded to him, therefore, the order is unsustainable in law.
The petitioner/assessee has challenged the order passed by the respondent Deputy Commissioner, State Tax under Section 73 of GST Act, by which the tax liability of Rs.86,73,188 along interest and penalty, in total 1,16,65,438 has been imposed.
Instead of availing the remedy of appeal against the order, the petitioner has approached the Court by way of writ petition seeking quashment of the order.
Arguments
The petitioner contended that it was entitled for personal hearing as contemplated under sub-section (4) of Section 75 of GST Act. As a result of which, the proceedings after the stage of the reply to the show-cause notice were set aside with the direction to provide an opportunity of hearing, therefore, the relief be granted to the petitioner.
The department contended that the petitioner is not entitled for the similar relief as granted by the Court in case of M/s Technosys Security System Pvt. Ltd. because the petitioner did not even file the reply to the show-cause notice and did not appear before the competent authority. In case of M/s Technosys Security System Pvt. Ltd., the petitioner filed the reply, but he was not given the opportunity of personal hearing, therefore, the matter was remitted back to the authority.
Relevant Provisions
Sub-section (4) of Section 75 of GST Act says that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with the tax or penalty or any adverse decision is contemplated against such person. The Division Bench of this Court has held that the opportunity of hearing means persons opportunity of hearing and if such personal opportunity of hearing is not provided then the order is unsustainable and liable to be set aside.
As per sub-Rule 4 an opportunity of personal hearing shall be granted where a request is received in writing from a person chargeable with the tax or penalty.
Conclusion
The court held that if the request is not received in writing, the oral request is also liable to be accepted provided the person appears and makes a request for grant of an opportunity of hearing, then only he can plead or claim an opportunity of personal hearing. When the person after receipt of the show-cause notice choose not to appear before the authority to file a reply or to make a request for personal hearing, then after passing the final order, he cannot allege that an opportunity of hearing has been denied to him.
The court dismissed the writ petition.
Case Details
Case Title: M/S Future Consumer Limited Versus The State Of Madhya Pradesh And Others
Case No.: Writ Petition No. 29375 Of 2024
Date: 22/10/2024
Counsel For Petitioner: Aditya Goyal
Counsel For Respondent: Anand Soni, AAG
