Mahendra Sponge And Power Limited vs Assistant Commissioner
2022 Latest Caselaw 3209 Chatt

                                                                WPT 67/2022
                                   -1-



                                                                   NAFR

            HIGH COURT of CHHATTISGARH, BILASPUR
                             WPT No. 67 of 2022
                                   Judgment reserved on 25.03.2022
                                   Judgment delivered on 04.05.2022
  •     Mahendra Sponge & Power Limited, Registered Office at Plot
        No. 76 and 77, Phaseh Siltara Industrial Area, Siltara, Raipur,
        Chhattisgarh through its Authorized Signatory Shri Kamlesh
        Ghosh, S/o Late Shri S.K. Ghosh, aged about 51 years, R/o
        Sai Nagar, Opp. Agricultural College, Raipur, Chhattisgarh
                                                          ------Petitioner

                                  VERSUS
  •     Assistant Commissioner, State Tax (SGST), Circle-9, Raipur,
        Civil Lines, Raipur, Chhattisgarh
                                                      -------Respondent

For Petitioner : Mr. Bhishma Ahluwalia, Advocate For Respondent : Mr. Sandeep Dubey, Dy. Adv. Gen. with Ms. Ruchi Nagar, Dy. Govt. Advocate

S.B.: Hon'ble Shri Parth Prateem Sahu, Judge C.A.V. Order

1. Petitioner by this writ petition has challenged the impugned order

dated 02.02.2022 passed by appropriate authority under Section

73(9) of Chhattisgarh Goods and Services Tax Act, 2017, making

demand under the "DRC-07".

2. Mr. Bhishma Ahluwalia, learned counsel for petitioner would

submit that the petitioner is engaged in the business of

manufacturer of iron and steel goods, avails the facilities of Input

Tax Credit (ITC) under the CGST/ SGST laws. Petitioner is

continuously depositing its output tax liabilities making payment

through its cash ledger and credit ledger as mentioned under

Section 49 of the CGST Act. Respondent issued notice under

Section 61 r/w Rule 99(1) in Form GST ASMT-10 dated WPT 67/2022

11.08.2021 mentioning that during scrutiny some discrepancies

were noticed and excess credit of ITC of Rs. 27,54,730/- was

availed by the petitioner during the period from 01.04.2019 to

31.03.2020. Respondent has failed to provide details of excess

claim of Input Tax Credit (ITC). On 11.10.2021, Respondent

issued DRC-01 making proposal of payment of Rs. 85,15,273/-

for the aforesaid period without specifying any allegations or

details of excess ITC availed. Thereafter, respondent issued

Show Cause Notice under Section 73 of the CGST/ SGST

without giving details. Petitioner made an application pointing out

that the notice was not proper and detailed show-cause notice be

issued to petitioner. Petitioner, thereafter, filed petition bearing

WPT No 221/2021. Upon hearing, notices were issued to

respondent/ Department and they deliberately not submitted their

reply to the writ petition and passed impugned order. Writ petition

is still pending. The Respondent-department without giving

proper opportunity of hearing, passed the impugned order and

the result of illegal adjudication will follow the illegal recoveries

and may also lead to attachment of bank accounts and debiting

electronic credit ledger of the petitioner. Referring to the

provisions under Section 49, 37 read with Rule 59; Section 38

read with Rule 60 and Section 42 of CGST/ SGST Act, he

submits that the mechanism provided under the aforementioned

provisions of verifying credits are for the purpose of converting

the same from provisional to final was never put in place by the

Government. GSTR-2 and GSTR-3 have been kept suspended

during the entire period after implementation of the new regime

by the Government. The DRC-01 dated 11.10.2021 is not a

show-cause notice as it does not contain all allegations and WPT 67/2022

charges based upon which demand of tax is proposed. No

charges have been framed against the petitioner. The notice

under Section 73 issued only reflects the provisions of the

Section and it does not mention any charges against the

petitioner. The order dated 02.02.2022 is in violation of principles

of natural justice. Reasonable and proper opportunity of hearing

is not provided to put-forth its objection. He places his reliance

upon the case of CCE v. Brindavan Beverages (P) Ltd. reported

in 2007 (213) ELT 487 (SC), Siemens Ltd v. State of

Maharashtra reported in 2007 (207) ELT 168 (SC) in support of

his contentions.

3. Mr. Sandeep Dubey, learned Dy. Advocate General representing

the State would submit that the writ petition is not maintainable in

view of efficacious alternate remedy available to the petitioner by

way of filing an appeal under Section 107 of GST Act, 2017. In

support of his contentions, he placed his reliance upon the

judgment of Hon'ble Supreme Court passed in Civil Appeal No.

5121/2021 between The Assistant Commissioner of State Tax

and others v. M/s Commercial Steel Limited dated 03.09.2021.

He further contended that the respondent upon detecting

discrepancies on scrutiny of return submitted by petitioner has

issued notice in Form GST ASMT-10 under Rule 99(1) of the

GST Act, 2017 dated 11.08.2021. In the said notice, the reason

for issuance of notice is specifically mentioned of difference of

ITC of Rs. 27,54,730.75/-. The petitioner did not submit any

explanation, whatsoever, to the notice under Form GST ASMT-10

dated 11.08.2021 and therefore the show-cause notice issued

under Section 73 of CGST/ SGST Act on 11.10.2021 mentioning WPT 67/2022

the details of difference of tax with interest along with summary

show-cause notice in Form GST DRC-01 under Rule 100(2) and

Rule 142(1)(a) mentioning difference of 3B & 2A. Petitioner

instead of participating in the proceedings has sought time

seeking adjournment of hearing vide order dated 20.10.2021.

Again, the petitioner has forwarded the letter seeking for detailed

show-cause notice. In the notice, reasons for issuance of notice

have been specifically mentioned. He contended that as this writ

petition is filed challenging the final order on notice under Section

73 of CGST/ SGST, the remedy available now to the petitioner is

to file an appeal under Section 107 of GST Act, 2017.

4. I have heard learned counsel for the parties and also perused the

record.

5. Undisputedly, upon scrutiny, notice under Section 61, notice in

FORM GST ASMT-10 was issued to the petitioner on 11.08.2021

followed by show-cause notice under Section 73 of CGST/ SGST

Act and the respondent authority by impugned order had

determined the tax liabilities, interest and penalty upon the

petitioner under Section 73(9) of CGST/ SGST Act and made

demand of the amount mentioned therein. Section 107 of the

GST Act, 2017 provides for appeal to appellate authority against

the order of adjudicating authority. The order impugned is passed

by adjudicating authority, hence, the order is to be assailed

before the appellate authority under Section 107 of GST Act,

2017. Petitioner is having statutory alternate remedy of

challenging the impugned order. The petitioner instead of availing

the statutory remedy available to it of filing appeal under Section

107 of GST Act, 2017 has filed this writ petition. The grounds WPT 67/2022

raised in this writ petition, very well be considered by the

appellate authority and as held by Hon'ble Supreme Court in the

aforementioned rulings ie. M/s Commercial Steel Limited

(supra) the existence of an alternate remedy is not an absolute

bar but the discretionary jurisdiction under Article 226 of the

Constitution can be exercised only in exceptional circumstances

like:

(i) a breach of fundamental rights;

(ii) a violation of principles of natural justice;

(iii) an excess of jurisdiction; or

(iv) a challenge to the vires of the statute or delegated legislation.

6. In the case at hand, respondent issued notice under Section 61

of GST Act, calling explanation upon the discrepancies found by

the authority to which the petitioner did not reply, thereafter,

show-cause notice under Section 73 of CGST/SGST along with

the summary of show-cause notice dated 11.10.2021 was also

issued.

7. In the facts of the case, this Court is of the opinion that no

exceptional circumstances as mentioned above are available

for entertaining this writ petition.

8. For the foregoing reasons, writ petition being devoid of any

substance which is liable to be and is hereby dismissed

accordingly. However, petitioner will be at liberty to take

recourse to the appropriate remedy available to it under Section

107 of the GST Act, 2017 for redressal of its grievance.

Sd/-

(Parth Prateem Sahu) Judge Pawan