Shreenath Logistics Vs State of Madhya Pradesh And Others (Madhya Pradesh High Court)
The Madhya Pradesh High Court considered a writ petition filed under Article 226 of the Constitution challenging an order dated 25.03.2026 and the related show cause notice dated 16.05.2024. The petitioner sought quashing of the adjudication order on the grounds that it was passed without assigning reasons, without granting a proper opportunity of hearing, and in violation of the principles of natural justice. The petitioner also challenged the composite show cause notice issued in Form DRC-01 covering the financial years 2017-18 to 2022-23.
According to the petition, the show cause notice alleged discrepancies in the GST returns filed by the petitioner. The petitioner submitted a detailed reply on 05.10.2024 raising objections and providing clarifications. After approximately 17 months, respondent No.4 passed the impugned order dated 25.03.2026 and issued Form DRC-07, raising a tax demand of Rs. 2,58,72,212, interest of Rs. 1,66,59,753, and penalty of Rs. 3,75,000, aggregating to Rs. 4,29,06,965. The petitioner contended that the order was passed without considering the reply, without granting a personal hearing despite a specific written request, and by an officer who allegedly lacked jurisdiction.
The petitioner further submitted that issuance of a composite show cause notice covering multiple financial years was impermissible under the GST regime and referred to previous decisions of various High Courts. Reliance was also placed on an earlier Division Bench decision of the Madhya Pradesh High Court dated 22.01.2024 in W.P. No.15923 of 2023 and connected matters, which held that an opportunity of hearing is mandatory before passing an adverse order. It was argued that Section 75(4) of the GST Act expressly requires grant of a hearing wherever an adverse decision is contemplated or where the person concerned makes a written request.
