Pvcon Engineering Vs CGST And Central Excise (Madhya Pradesh High Court)
Summary: The Madhya Pradesh High Court at Jabalpur dismissed the writ petition filed by M/S PVCON ENGINEERING challenging a show-cause notice dated 26.07.2024, an Order-in-Original dated 03.10.2024 imposing penalty under Section 122(1)(ii) and (vii) of the CGST Act, 2017 and Section 20 of the IGST Act, 2017, and an Order-in-Appeal dated 21.10.2025 by which the appeal under Section 107 of the CGST Act was dismissed on limitation. The petitioner was engaged in construction, site development and road construction activities. An investigation had commenced on 02.12.2020 on the allegation of passing on irregular input tax credit without actual supply of goods, and its GST registration was cancelled on 24.03.2021. The petitioner challenged the jurisdiction of the authorities, contending that the respondent No.2, a DGGI officer, was not the proper officer for issuing the notice under Section 122 and relying upon Circular No. 31/05/2018-GST, which, according to the petitioner, permitted DGGI officers to issue show-cause notices only under Sections 73 and 74. The petitioner also questioned the retrospective operation of the circular dated 27.10.2025 assigning functions of proper officer to respondents No.1 and 2. The respondents supported the impugned action.
Read SC Judgments: Pre-Deposit on GST Penalty Appeals: SC Allows Appeal Without Pre-Deposit
The High Court noted that the petitioner had a statutory remedy under Section 112 of the CGST Act before the GST Tribunal and that Presiding Officers had been appointed and directed to join their concerned Tribunals. The Court further found disputed questions of fact concerning alleged violation of natural justice and whether respondent No.2 was the proper officer, requiring examination by the GST Tribunal on the documents to be filed by the petitioner. As regards the challenge to the mandatory pre-deposit requirement under Section 112, the Court held that the petitioner could not invoke writ jurisdiction merely to avoid the statutory condition. In view of the available appellate remedy and the statutory tribunal comprising judicial and technical members, the Court dismissed the petition while granting liberty to the petitioner to approach the concerned Tribunal and avail the appellate remedy.
FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT
In this writ petition the petitioner has challenged the show-cause notice issued by respondent No.2 dated 26/7/2024; the impugned order dated 03.10.2024 (Annexure P/1), whereby respondent No.1/Additional Commissioner, CGST and Central Excise, Bhopal imposed penalty upon the petitioner under Section 122(1)(ii) & (vii) of the CGST Act, 2017 and Section 20 of the IGST Act, 2017 as also the impugned Order-in-Appeal dated 21.10.2025 passed by the Appellate Authority. In the alternative, prayer has been made to declare that provision mandating pre-deposit under section 112 of CGST Act cannot be applied retrospectively.
Facts of the case, in short, are as under :-
2. The petitioner is engaged in the business of construction work, site development, road construction, etc. having GSTIN registration. On 02.12.2020, an investigation was initiated against the petitioner by respondent No.2 on the ground that it was found involved in passing on irregular input tax credit without actual supply of goods. On 24.3.2021, the registration of the petitioner has been cancelled. The respondent No.2 issued show-cause notice dated 26.7.2024 proposing penalty u/s 122(1)(ii) & (iv) of CGST Act and section 20 of IGST Act, 2017 in respect of financial years 2017-18 & 2018-19. The respondent No.1 vide impugned Order-in-Original dated 03.10.2024 imposed penalty under aforesaid provisions. Being dissatisfied with the Order-in-Original the petitioner preferred an appeal before the Appellate Authority u/s 107 of CGST Act. The Appellate Authority vide impugned order dated 21.10.2025 dismissed the appeal u/s 107 of the CGST Act on the ground of limitation. Hence, this petition.
3. Learned counsel for the petitioner submitted that respondent No.3 vide circular dated 27.10.2025 assigned functions of proper officer to respondents No.1 & 2, therefore, the impugned show-cause notice and impugned Order-in-Original by the respondents No.1 & 2 are without jurisdiction as aforesaid circular cannot be made effective retrospectively. According to the petitioner, the Impugned Show Cause Notice issued by Respondent No. 2 (DGGI officer) proposing to impose penalty under Section 122 (1) (vii) of the CGST Act is without any jurisdiction as Respondent No. 2, is not the ‘proper officer’ for the purpose of issuing the Impugned Show Cause Notice under Section 122 of the CGST Act as the Circular No. 31/05/2018-GST only permits DGGI officers to issue show cause notice only under Section 73 or 74 of CGST/ Act.
4. Learned counsel for the respondents has supported the impugned action of the respondents and submitted that the impugned orders are just and proper.
5. The petitioner has a remedy under section 112 of the CGST Act before the GST Tribunal. Now, the Presiding Officers have been appointed, and they have been directed to join their concerned GST Tribunal. The Central Government has issued a circular granting 30 days’ time to file an appeal from the date of starting of filing before the Tribunal.
6. Even otherwise, there are disputed questions of fact as to whether entire proceedings were conducted in violation of principles of natural justice and whether the respondent no. 2 was a “proper officer” which are required to be examined by the GST Tribunal based on documents to be filed by the petitioner. As far as relief relating to declaring the mandatory provision of pre-deposit for preferring appeal u/s 112 of CGST Act is concerned, it is observed that in order to avoid the condition of pre-deposit, the petitioner cannot be permitted to invoke the writ jurisdiction of this Court. Once the statute has created a tribunal comprising judicial as well as technical members to deal with the matter related to the GST disputes, the High Court cannot be permitted to entertain the petition under Article 226 of the Constitution of India. The parties should be relegated to the GST Tribunal for redressal of their grievance relating to GST. If the High Court is required to entertain each and every matter, then what would be the use of the constitution of the tribunal, comprising judicial as well as expert members, to deal with the case on judicial as well as technical side, both?
7. In view of the aspect that remedy of an appeal u/s 112 of the CGST Act is available to the petitioner, the instant petition is dismissed with liberty to the petitioner to approach the concerned Tribunal to avail the remedy of an appeal.
