Case Law Details
Mohd. Naseem Khan Vs State of Madhya Pradesh and Others (Madhya Pradesh High Court)
The petitioner challenged the order dated 30.11.2022 passed by the Assistant Commissioner of State Tax under Section 74 of the Central Goods and Services Tax Act, 2017 for the financial year 2019–20, as well as the appellate order dated 04.02.2025 by which the Joint Commissioner dismissed the appeal.
The petitioner was operating a business through a proprietorship firm and had obtained GST registration. A notice in Form ASMT-10 under Section 61 was issued on 02.01.2020 alleging mismatch between GSTR-1 and GSTR-3B returns and requiring payment of Rs.1,33,68,792/-. The petitioner did not file any reply, claiming unawareness of the notice.
Subsequently, a notice under Section 74 in Form DRC-01 dated 12.02.2021 demanded tax of Rs.46,23,586/- along with interest of Rs.12,02,400/- and penalty of Rs.11,55,896/-. The petitioner again did not respond, stating that the notice was uploaded in the “additional notice” tab on the GST portal. Thereafter, an ex parte order dated 30.11.2022 was passed confirming the demand under the CGST/MPGST Act.
The petitioner filed an appeal before the Commissioner without depositing the mandatory pre-deposit amount. The appellate authority dismissed the appeal as time-barred on 04.02.2025. Before the High Court, the petitioner argued that the demand violated Section 75(7) because the tax, interest, and penalty imposed exceeded the amount specified in the show-cause notice. The petitioner also stated that he became aware of the demand only when he attempted to sell land and was prevented from executing the sale deed due to pending GST dues. The petitioner had surrendered the GST registration on 12.04.2021.
The High Court observed that all notices and orders had been uploaded on the GST portal and the petitioner failed to produce any material showing that they were only available in the “additional tab.” The Court noted that the petitioner neither made the mandatory 12.5% pre-deposit nor filed an application for condonation of delay before the appellate authority. The Court further held that the petitioner had been negligent in pursuing statutory remedies.
The Court also observed that the writ petition itself was filed after expiry of the limitation period for filing an appeal before the GST Tribunal. Holding that the petitioner could not bypass the statutory appellate mechanism and avoid compliance with mandatory pre-deposit requirements, the High Court dismissed the writ petition.
FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT
The petitioner has filed this present petition being aggrieved by order dated 30.11.2022 (Annexure P-1), passed by the Assistant Commissioner of State Tax, Vidisha Circle, Bhopal Division under section 74 of the Central Goods and Service Tax Act, 2017 pertaining to the financial year 1st April, 2019 to 31st March, 2020 and order dated 04.02.2025 (Annexure P-11), whereby 1st Appellate Authority i.e Joint Commissioner of the State Tax, Bhopal Division has dismissed the appeal.
2. The petitioner has been running a business through a proprietorship firm under the Trade name of Radisson Binakurwai Road Restaurant. The petitioner obtained a GST Number and certificate. The respondent no. 3 issued a show-cause notice ASMT-10 under section 61 on 02.01.2020 (Annexure P-3), alleging a mismatch between GSTR-1 and GSTR-3 B returns. The petitioner was called upon to deposit a tax of Rs. 1,33,68,792/-. The petitioner did not submit any reply to the said notice on the pretext of being unaware of the issuance of any such notice. Thereafter, the respondent issued a notice under section 74 on 12.02.2021 (Annexure P-5). Vide DRC-01 demanding tax of Rs.46,23,586/- along with interest Rs.12,02,400/- and penalty Rs.11,55,896/-. Again, the petitioner did not submit any response to the said show-cause notice as the said notice was issued on the additional notice tab. The respondent no.3 passed an ex parte order dated 30.11.2022 (Annexure P-1) confirming the demand under section 74 of the CGST/MP GST Act, 2017. The petitioner submitted an appeal before the Commissioner without deposit of mandatory amount of tax as a pre-deposit condition. The Learned Commissioner has dismissed the appeal vide order dated 04.02.2025 (Annexure P-11) as time-barred. Hence, this petition before this Court inter alia on the ground that the impugned demand is in violation of section 75(7) of the Act of 2017 as the amount of tax, interest and penalty demanded in the order exceeds the amount specified in the show-cause notice. The petitioner has surrendered the GST license to the department on 12.04.2021, which has been accepted by the respondent.
3. According to the petitioner, he came to know about the aforesaid demand and orders only when he tried to sell land by reaching the office of the Sub-Registrar, and he was stopped from executing the sale deed as the demand for GST is pending against him.
4. It cannot be believed that the petitioner did not know the notices issued to him under section 61, 74 and the final order passed by the respondent. All notices and orders were published in the GST portal. The petitioner has not filed any document to show that these notices were published in the additional tab. The appellate authority has observed that the petitioner did not deposit 12.5.% of the amount, which is mandatory before entertaining the appeal. No application for condonation of delay has been filed along with the appeal as well; therefore, the petitioner has been negligent in pursuing the remedies before the GST Authorities. Even this writ petition is filed after one year, when the limitation to file an appeal before the GST Tribunal had expired. Therefore, the petitioner cannot be permitted to invoke the jurisdiction of the writ court in order to bypass the statutory remedy, avoidance to deposit 12% amount after expiry of the period of limitations for the filing of an appeal. The petitioner has a remedy of filing an appeal before the GST Tribunal against the impugned order. Accordingly, this writ petition is dismissed.
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