Case Law Details
Concord Tieup Pvt. Ltd. Vs State of Madhya Pradesh (Madhya Pradesh High Court)
In the case of Concord Tieup Pvt. Ltd. v. State of Madhya Pradesh [Writ Petition No. 26956 of 2022 dated April 25, 2023], the Madhya Pradesh High Court, in its esteemed judgment, nullified the order and directed a fresh hearing in light of the show cause notice issued. The court deemed the show cause notice invalid as it failed to include essential details such as the date, time, and venue of the personal hearing. Consequently, the court ordered a remittance of the case for a thorough reconsideration.
Facts:
M/s. Concord Tieup (P.) Ltd. (“the Petitioner”) was served with the notice of intimation of tax under Section 74(5) of the Madhya Pradesh Goods and Services Tax Act, 2017 (“MPGST Act”) (“the Notice”). The Petitioner submitted reply of the Notice on June 23, 2022.
Thereafter a show cause notice dated July 22, 2022 under section 74 of the MPGST Act was issued (“the SCN”). The SCN inter alia mention about personal hearing to the effect that “you may appear before the undersigned for personal hearing either in person or through authorized representative for representing your case on the date, time and venue, if mentioned in table below”, however, no date, time and venue for personal hearing was shown in the SCN.
Thereafter, on August 24, 2022 the Revenue Department passed an order under Section 74 of the MPGST Act (“the Impugned Order”).
The Petitioner filed writ before the High court and contended that as per Section 75(4) of the MPGST Act, before passing the Impugned Order, personal hearing is necessary, which should be mentioned in the notice itself, as such in absence of personal hearing, the Impugned Order is not sustainable.
Issue:
Whether Revenue Department can issue the SCN without providing the date, time and venue for personal hearing and pass order on the basis of such SCN?
Held:
The Hon’ble Madhya Pradesh High Court in Writ Petition no.26956 of 2022 held as under:
- Relied upon, the case of Bharat Mint & Allied Chemicals v. Commissioner of Commercial Tax, 2022 (59) G.S.T.L. 394 (All.), wherein the Hon’ble Allahabad High Court held that opportunity of hearing has to be granted by Revenue Department either on request of the person chargeable with tax for opportunity of hearing or where any adverse decision is given against such person.
- Observed that, the SCN failed to provide opportunity of personal hearing before passing the Impugned Order.
- Noted that, so far argument raised by the Revenue Department regarding availability of alternative remedy of appeal, is concerned, it is well settled that when due opportunity of hearing, as required under the law, has not been afforded and principle of natural justice has not been followed, then the question of availability of alternative remedy does not come in the way.
- Set aside the Impugned Order and remitted back the matter to the Deputy Commissioner for passing order afresh, after giving personal hearing to the Petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT
By way of this writ petition under Article 226 of the Constitution of India, challenge has been made to the order dated 24.08.2022 (Annexure P/4) passed under section 74 of the MPSGST/CGST Act, 2017 and section 20 of IGST Act, 2017 by Deputy Commissioner, Audit Wing, Jabalpur upholding the tax, interest and penalty mentioned in the show cause notice dated 22.07.2022 (Annexure P/3).
2. Learned counsel for the petitioner submits that upon issuance of notice/intimation of tax ascertained as being payable under Section 74(5) of the M.P.G.S.T. Act (in short “the Act”), reply was submitted on 23.06.2022, thereafter show cause notice under Section 74 of the Act dated 22.07.2022 (Annexure P/3) was issued making mention about personal hearing to the effect that “you may appear before the undersigned for personal hearing either in person or through authorized representative for representing your case on the date, time and venue, if mentioned in table below“, but no date, time and venue for personal hearing was shown in the notice. He submits that as per Section 75(4) of the Act, before passing the impugned order, personal hearing was necessary, which is mentioned in the notice itself, as such in absence of personal hearing, the order dated 24.08.2022 (Annexure P/4) is not sustainable. In support of his submissions, he placed reliance on the coordinate Bench decision of Allahabad High Court in the case of Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax, 2022 (59) G.S.T.L. 394 (All.). The relevant paragraphs of which are quoted as under:-
“5. We have carefully considered the submissions of learned counsel for the parties.
Question
The two question involved in this writ petition are as under :-
(i) Whether opportunity of personal hearing is mandatory under Section 75(4) of the CGST/UPGST Act, 2017 ?
(ii) Whether under the facts and circumstances of the case the impugned adjudication order has been passed in breach of principle of natural justice and consequently it deserves to be quashed in exercise of powers conferred under Article 226 of the Constitution of India ?
6. We have perused the show cause notice dated 09.09.2021 in which it has been mentioned as under:
“You may appear before the undersigned for personal hearing either in person or through representative for representing your case on the date, time and venue, if mentioned in the table below.”
7. In the table below the aforementioned lines, date, time and venue of personal hearing has not been mentioned. Section 75(4) of the Act, 2017 provides that opportunity of personal hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty or where any adverse decision is contemplated against such person.
8. Section 75(4) of the Act, 2017 reads as under:
“An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
9. From perusal of Section 75(4) of the Act, 2017 it is evident that opportunity of hearing has to be granted by authorities under the Act, 2017 where either a request is received from the person chargeable with tax or penalty for opportunity of hearing or where any adverse decision is contemplated against such person. Thus, where an adverse decision is contemplated against the person, such a person even need not to request for opportunity of personal hearing and it is mandatory for the authority concerned to afford opportunity of personal hearing before passing an order adverse to such person.”
3. Learned counsel appearing for the respondents supports the impugned order and prays for dismissal of the writ petition, although has failed to justify the impugned order on the ground of non-affording of personal hearing to the petitioner. However, he submits that the petitioner has alternative remedy of appeal against the impugned order, therefore, no interference is warranted in the limited scope of Article 226 of the Constitution of India.
4. Heard learned counsel for the parties and perused the record.
5. The show cause notice dated 22.07.2022 (Annexure P/3) issued under Section 74 of the Act, itself shows that before passing final order dated 24.08.2022 (Annexure P/4), the intention of the respondents was to give personal hearing to the petitioner as required under the law, but in the table given below, captioned as “Details of personal hearing etc.”, no Date, Time and Venue of personal hearing has been shown and in front of columns 3,4&5 of Date, Time and Venue, NA has been mentioned, which is sufficient to infer that no personal hearing was given to the petitioner before passing the impugned order dated 24.08.2022.
6. So far as argument raised by counsel for the respondents regarding availability of alternative remedy of appeal, is concerned, it is well settled that when due opportunity of hearing, as required under the law, has not been afforded and principle of natural justice has not been followed, then the question of availability of alternative remedy does not come in the way for exercising jurisdiction under Article 226 of the Constitution of India.
7. In view of the aforesaid and following the law laid down by the co-ordinate Bench of Allahabad High Court in the case of Bharat Mint & Allied Chemicals (supra), the impugned order is not sustainable and deserves to be and is hereby quashed and the matter is remitted back to the Deputy Commissioner, Audit Wing, Jabalpur for passing order afresh, after giving personal hearing to the petitioner as indicated above.
8. Resultantly, writ petition succeeds and is allowed. No order as to the costs.
9. Interim application(s), if any, shall stand disposed off.
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