Madhya Pradesh High Court
M/S Jay Laxmi Industries Through Its ... vs Union Of India Through Office Of The ... on 25 August, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:23872
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THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 25th OF AUGUST, 2025
WRIT PETITION No. 23441 of 2025
M/S JAY LAXMI INDUSTRIES THROUGH ITS PROPRIETOR
JIGNESHBHAI JASHWANT LAL RAVAL
Versus
UNION OF INDIA THROUGH THE OFFICE OF THE
COMMISSIONER CGST AND CENTRAL EXCISE AND OTHERS
Appearance:
Shri Rishabh Gupta - Advocate for the petitioner.
Shri Prasanna Prasad, Advocate for the respondents.
ORDER
Per: Justice Vivek Rusia
Petitioner has filed the present petition under Article 226 of the
Constitution of India, challenging the show cause notice dated
13.09.2024 and the cancellation of registration dated 01.10.2024.
02. The petitioner M/s Jay Laxmi Industries is a sole proprietorship
concern of Mr. Jigneshbhai Jashwantlal Raval engaged in the business
of manufacturing and sale of pesticides, insecticides, herbicides,
disinfectants, etc. The petitioner has had the GST registration of the
State of M.P. since 01.07.2017. According to the petitioner, the returns
have been submitted under the GST losses upto July 2024 despite that
the respondent No.2 issued a show cause notice dated 13.09.2024
proposing cancellation of registration by invoking the provisions of
Section 29(2)(e) of the Central Goods and Service Tax Act, 2017
(hereinafter referred as "CGST Act, 2017") read with Rule 21(a) and (b)
of the Central Goods and Service Tax Rules, 2017.
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03. The petitioner was called upon to furnish the reply within 7
working days from the date of service of the notice. Admittedly, the
petitioner did not submit the reply as they failed to open the common
portal. The respondent No.2 passed a final order dated 01.10.2024 for
cancellation of registration form GST REG-17 with a retrospective date
w.e.f. 01.07.2017, assigning the reasons firstly, that the registration
obtained by means of fraud, willful misstatement or suppression of fact,
secondly, the firm does not conduct any business from the declared
place of business and thirdly, issued invoices or bills without supply of
goods or supply under the GST act and rules.
04. Instead of challenging the said order by way of appeal within
the period of limitation, the petitioner has filed this writ petition
challenging the show cause notice as well as the cancellation of
registration inter alia on the ground that the procedure contained in Rule
25 of CGST Rules, 2017 has not been followed and the petitioner was
not given specific date and time to appear in the show cause notice
which invalidates the entire proceedings. It is further submitted that the
show cause notice was not issued in a prescribed form, GST REG-17. It
is further submitted that the petitioner has not been given an opportunity
for a personal hearing before the order of cancellation of registration. In
support of the above contentions, learned counsel has placed reliance on
the judgments passed by the various High Courts in which the order of
cancellation of GST has been set aside because of the non-grant of a
personal hearing.
05. Learned counsel for the petitioner submits that the respondent
has also illegally cancelled the GST registration with retrospective effect
which has been deprecated by the various High Courts in following
cases: (i) Suresh Trading Corporation v/s The Assistant Commissioner
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(Circle) of CGST passed in Writ Petition No.21109 of 2021 by the High
Court of Madras, (ii) M/s S.S. Traders v/s State of U.P. and others
passed in Writ Tax No.651 of 2021 by the High Court of Allahabad, (iii)
M/s Jinesh Associates v/s Commissioner of Commercial Taxes and
another passed in Writ Petition No.2929 of 2022 by the High Court of
Karnataka, (iv) Phuljhora Agro Plantation Pvt. Ltd. & another v/s
Union of India & another passed in W.P.A. No.1740 of 2024 by the
High Court of Calcutta, (v) Shilpkal Buildcon v/s Commissioner of
CGST and others passed in Writ Petition No.40821 of 2024 by High
Court of M.P. Principal Seat at Jabalpur, (vi) Rashid Proprietor v/s
Union of India and others passed in Writ Petition (C) No.1635 of 2025
by High Court of Delhi, (vii) Juri Bhuyan v/s Union of India and
others passed in Writ Petition (C) No.1701 of 2025 by High Court of
Gauhati, (viii) Chauhan Construction Co. v/s Commissioner of DGST
and another passed in Writ Petition (C) No.12506 of 2024 by High
Court of Delhi, (ix) M/s Neelam Food Industries v/s State of Madhya
Pradesh and others passed in Writ Petition No.35004 of 2024 by High
Court of M.P. Principal Seat at Jabalpur, (x) JSP Traders LLP v/s
Additional Commissioner, CGST and another passed in Writ Petition
(C) No.2608 of 2025 by High Court of Delhi.
06. Learned counsel for the petitioner has placed reliance on the
following judgments passed by the various High Courts dealing with the
order of GST, registration cancellation without strict compliance of Rule
25 of CGST Rules, 2017: (i) F R Trade Link v/s The State Tax Officer,
SGST and others passed in Writ Petition (C) No.28917 of 2020 by High
Court of Kerala, (ii) Bimal Kothari v/s Assistant Commissioner
(DGST) and others passed in Writ Petition (C) No.9207 of 2019 by
High Court of Delhi, (iii) KPM Enterprises v/s The Commissioner,
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DGST and others passed in Writ Petition (C) No.16388 of 2022 by
High Court of Delhi, (iv) M/s Ultra Steel v/s State of Madhya Pradesh
and others passed in Writ Petition No.21659 of 2022 by High Court of
Madhya Pradesh.
07. In response to the preliminary objection about the
maintainability of writ petition for want of efficacious remedy of appeal,
the learned counsel submits that there is no absolute bar in entertaining
the writ petition as held by the Hon'ble Apex Court in the case of M/s
Radha Krishan Industries v/s State of Himachal Pradesh & others in
C.A. No.1151 of 2021 and the High Court of Bombay in the case of
Saurabh Sahu v/s State of Maharashtra in Writ Petition No.8537 of
2025.
REPLY OF THE RESPONDENTS
08. Shri Prasanna Prasad, learned counsel for the petitioner,
submits that the petitioner has wrongly filed the writ petition under
Article 226 of the Constitution of India when the statutory remedy of
appeal is available under Section 107 of the GST Act against the order
dated 01.04.2024. It is further submitted that the genesis of the
cancellation of registration proceedings against the petitioner arises
from the data received from the Directorate General of Analytics and
Risk Management, New Delhi. Pursuant to the nationwide risk
assessment exercise undertaken by DG ARM. A list of suspicious
taxpayers who were prima facie found engaged in non-genuine business
activities was sent to the concerned jurisdictional authorities. The name
of M/s Jay Laxmi Industries appeared in the list No.2; therefore, a show
cause notice was issued to the petitioner. It is further submitted that Mr.
Jigneshbhai Jashwantlal Raval, the Proprietor of this petitioner, was also
found non-existent by the GST authority of Maharashtra and a similar
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show cause notice was issued on 12.05.2022, followed by cancellation
of registration vide order dated 25.05.2022. The petitioner had a remedy
to submit a response to the show cause notice, and now there is a
remedy of filing an appeal; thus, the writ petition is dismissed.
We have heard learned counsel for the parties at length and
perused the entire record.
09. The petitioner is challenging the show cause notice as well as
the order of cancellation of registration on merit, but the petitioner has
not filed any documentary evidence to show that the allegations and the
findings recorded by the competent authority are not correct. The
petitioner had an opportunity to submit a reply along with all the
documents before the respondent, within 30 days. The only explanation
offered by the respondent is that he did not open the portal, which
cannot be a justification for the non-filing of the reply. Even after the
passing of the final order, the petitioner had 30 days to file an
application for rectification. The petitioner has also failed to invoke the
remedy of appeal within the time limit prescribed for filing an appeal.
10. So far as the cancellation of registration with retrospective date
is concerned, the power is given to the Proper Officer under sub-Section
(2) of Section 29 of the CGST Act, 2017 if any of the conditions
prescribed in sub-clause A to E are not fulfilled.
11. The petitioner has not disclosed what action has been taken
against the order passed by the Proper Officer against him in respect of
the cancellation of GST registration in the State of Maharashtra. In this
case, after cancellation of registration, now a show cause notice dated
28.06.2025 has been issued to the petitioner under Section 122 of the
CGST Act, 2017 for recovery of GSY and penalty.
12. The Hon'ble Apex Court in the case of State of Maharashtra &
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Others v/s Greatship (India) Limited reported in (2022) 17 SCC
332 has held that the High Court has seriously erred in entertaining the
writ petition under Article 226 of the Constitution of India against the
assessment order and ought to have relegated the writ petitioner to avail
the statutory remedy of appeal. Paragraphs No.14 to 17 of the aforesaid
judgment are reproduced below:
"14. Applying the law laid down by this Court in the aforesaid
decision, the High Court has seriously erred in entertaining
the writ petition under Article 226 of the Constitution of India
against the assessment order, by-passing the statutory
remedies.
15. Now so far as the reliance placed upon the decisions of
this Court by the learned Senior Advocate appearing on behalf
of the respondent, referred to herein above, are concerned, the
question is not about the maintainability of the writ petition
under Article 226 of the Constitution, but the question is
about the entertainability of the writ petition against the order
of assessment by-passing the statutory remedy of appeal.
There are serious disputes on facts as to whether the
assessment order was passed on 20.03.2020 or 14.07.2020 (as
alleged by the assessee). No valid reasons have been shown
by the assessee to bypass the statutory remedy of appeal. This
Court has consistently taken the view that when there is an
alternate remedy available, judicial prudence demands that the
court refrains from exercising its jurisdiction under
constitutional provisions.
16. In view of the above and in the facts and circumstances of
the case, the High Court has seriously erred in entertaining the
writ petition against the assessment order. The High Court
ought to have relegated the writ petitioner - assessee to avail
the statutory remedy of appeal and thereafter to avail other
remedies provided under the statute.
17. Under the circumstances, the impugned judgment and
order passed by the High Court is hereby quashed and set
aside. The writ petition filed before the High Court
challenging the assessment order and consequential notice of
demand of tax is hereby dismissed. The respondent - assessee
is relegated to avail the statutory remedy of appeal and other
remedies available under the MVAT Act and CST Act. It is
directed that if such a remedy is availed within a period of
four weeks from today, the appellate authority shall decide
and dispose of the same on its own merits in accordance with
law without raising any question of limitation, however,
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subject to fulfilling the other conditions, if any, under the
statute. It is made clear that we have not expressed any
opinion on the merits of the case in favour of either of the
parties and it is for the appellate authority and/or appropriate
authority to consider the appeal/proceedings on its/their own
merits and without being influenced in any way by any of the
observations made by the High Court which otherwise have
been set aside by the present order. The present appeal is
allowed in the aforesaid terms. However, in the facts and
circumstances of the case, there shall be no order as to costs."
13. In view of the above and keeping in view the aforesaid
judgment, this Writ Petition stands dismissed. The petitioner shall be at
liberty to file an appeal against the order of cancellation of Registration.
(VIVEK RUSIA) (BINOD KUMAR DWIVEDI)
JUDGE JUDGE
Divyansh
