Madhya Pradesh High Court
Gr Infra Projects Limited Ratlam ... vs The State Of Madhya Pradesh on 29 October, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 29th OF OCTOBER, 2025
WRIT PETITION No. 40749 of 2025
GR INFRA PROJECTS LIMITED RATLAM THROUGH ITS
AUTHORIZED SIGNATORY MR. BHOORI SINGH
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Jatin Harjai along with Ms. Priyal Jain - Advocate for the
petitioner.
Shri Bhuwan Gautam - Government Advocate for the
respondent/State.
ORDER
Per: Justice Vivek Rusia
1. Petitioner has filed this present petition under Article 226 of the
Constitution of India seeking the following reliefs:-
"(i) Issue a Writ of Certiorari and quash and set aside the
impugned Show Cause Notice dated 13.06.2025 (Annexure P/7).
(ii) Alternatively, issue a Writ of Mandamus to Respondent No.
3 directing it to adjudicate upon the Preliminary Objections filed
by the Petitioner and consequently pass a reasoned, speaking
order.
(iii) Pass any other further orders that this Hon'ble High Court
deem fit in the interest of justice."
2. Petitioner is a Company incorporated under the provisions of the
Companies Act, 1956. The petitioner-company is engaged in the design and
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construction of various roads and highway projects. The petitioner is also
registered under the Central Goods and Services Tax Act, 2017 and M.P.
Goods and Services Tax Act, 2017. Assistant Commissioner, State Tax,
Anti-Evasion Bureau, Indore-B, Madhya Pradesh issued a summon under
Section 70 to Mr. Kuldeep Jain, who is the authorised signatory of the
petitioner, calling upon him to appear along with certain documents. He
appeared along with the documents. In the month of August, 2022 the
premises of the petitioner was searched by the GST officials. According to
the petitioner, the full cooperation was extended by producing all the
documents as demanded time to time.
3. On 29.4.2025 an intimation under Rule 142(1A) in the Form DRC-
01A along with annexure was issued to the petitioner by the respondent
No.3. The petitioner submitted detailed response on 14.5.2025 along with the
preliminary objections to the validity of the proceedings. The petitioner was
not supplied the draft notice dated 3.3.2025, on which this DRC-01A was
based. In response to the objection, respondent No.3 provided the said draft
notice dated 3.3.2025 on 27.5.2025. After going through the said draft
notice, the petitioner again submitted a detailed objection. Now the
respondent No.3 has issued a show-cause notice dated 13.6.2025 under
Section 74 of the CGST Act read with MPGST Act in respect of demand of
tax of Rs.1,52,56,431/-. The details are as under:-
Allegation Amount (in INR)
Inter-state Outward supply in GSTR-3B Vs. E-way Bill 1,06,954/-
Inter-state Inward supply in GSTR-3B Vs. E-way Bill 42,19,025/-
Ineligible ITC (in respect of site office) 2,69,014/-
Post Supply Cancellation of Vendors 1,06,61,438/-
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Total 1,52,56,431/-
4. The petitioner filed a preliminary objection to question the validity
of the impugned SCN and now filed the present petition before this Court
seeking quashment of SCN.
5. Learned counsel appearing for the petitioner submits that the tax
period pertaining to which this notice under Rule 142(1A) and the present
SCN have been issued, is 2018-19. Both the notices are based on the
allegation of evasion of tax by way of fraud or willful misstatement. The
allegations of fraud and willful evasion as they are very vague and no such
details have been given in it. Therefore, such notice is unsustainable in law.
The authorities could have issued the notice under Section 73 in absence of
any material of fraud and willful evasion, for which the limitation is only 3
years. Therefore, instead of participating in the show-cause notice, the
petitioner has approached this Court by way of writ petition. In support of his
contention, learned counsel has placed reliance on the judgment passed by
the Apex Court in the case of Uniworth Textiles Ltd. Vs. Commissioner of
Central Excise, Raipur reported in 2013(9) SCC 753, in which the Apex
Court has held that the burden of proof of proving mala fide conduct under
proviso to Section 28 of the Customs Act, 1962 lies with the Revenue; that
in furtherance of same, no specific averments find a mention in show cause
notice which is a mandatory requirement for commencement of action under
said proviso. Unless the assessee is put to notice, the assessee would have no
opportunity to meet the case of the Department on the issue of fraud,
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collusion or willful misstatement or suppression of fact. Learned counsel has
also placed reliance on a recent Division Bench decision of High Court of
Allahabad in the case of Hcl Infotech Ltd. Vs. Commissioner, Commercial
Tax and others vide order dated 27.9.2024 passed in Writ Tax No.1396 of
2024, in which the similar show cause notice issued to the petitioner (therein)
has been quashed inter-alia on the ground that the show cause notice does
not make a whisper of the fact that petitioner had wrongly availed or utilized
Input Tax Credit due to any fraud, or wilful misstatement or suppression of
facts to evade tax. Learned counsel has also placed reliance on a Division
Bench judgment of Allahabad High Court in the case of SCN issued to sister
concern of the petitioner M/s Varanasi Sangam Expressway Pvt. Ltd. Vs.
Commissioner of State Tax vide order dated 8.10.2025 passed in Writ Tax
No.1028 of 2025.
6. Shri Bhuwan Gautam, learned Government Advocate appearing for
the respondents submits that the writ petition is not maintainable. The
petitioner has already filed reply to the show cause notice. The petitioner is
free to raise all these grounds before the proper officer. After passing the
order in original, the petitioner shall have a remedy under Section 107 of the
MPGST Act to file an appeal and thereafter further appeal to the GST
Appellate Tribunal.
We have heard the learned counsel for the parties and perused the
record.
7. So far as the judgments passed by the Allahabad High Court in the
matter of Hcl Infotech Ltd. & M/s Varanasi Sangam Expressway Pvt. Ltd.
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(supra) is concerned, there is a specific observation by the Court that in the
SCN there is no whisper about the allegations of fraud, or wilful
misstatement or suppression of facts. The copy of show cause notice issued
and the relied on cases has not been filed by the petitioner in this petition to
compare with the show cause notice issued to the petitioner. In the show
cause notice issued in the present case, there are specific allegations of fraud
and willful suppression of facts against the petitioner.
8. It is clear from the contents of draft notice dated 3.3.2025 prepared
by the Office of Dy. Commissioner, Commercial Tax, Audit Wing-2, Indore
that the commercial place of the petitioner was searched under Section 67 of
the GST Act. This report runs into 191 pages containing material of wilful
evasion of GST of Rs.1,52,56,431/- in the year 2018-19. As per the language
of Section 67 of the GST Act, where the proper officer, not below the rank of
Joint Commissioner, has a reasons to believe that a taxable person has
suppressed any transaction relating to supply of goods or services or both or
the stock of goods in hand and indulged in contravention of any of the
provisions of this Act to evade tax under this Act may, in writing, inspect
any place of business of the taxable person or the person engaged in the
business. Where the proper officer has reasons to believe that any person said
to have evaded or is attempting to evade the payment of any tax, he may, for
reasons to be recorded in writing, seize the accounts, registers or documents
of such person. The power of arrest has been given under Section 69. After
completing such inspection, search and seizure, the proper officer either may
issue notice under Section 73 or under Section 74 to the assessee. The
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difference between both the sections is regarding period of limitation, which
is 3 years and 5 years respectively. Therefore, at this stage, once the show
cause notice has been issued under Section 74, it cannot be examined by the
writ court that the proper officer has erroneously issued the notice under
Section 74 without there being any reason of fraud or willful misstatement of
fact to evade the tax. Even after conducting an enquiry under Section 74, if
the proper officer is failed to establish the allegations of fraud, willful
misstatement or suppression of fact, the order-in-original may be passed
under Section 73. Sub-section (3) of Section 74 says that "where a notice has
been issued for any period under sub-section (1), the proper officer may
serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised." Sub-
section (4) says that "the service of statement under sub-section (3) shall be
deemed to be service of notice under sub-section (1) of section 73, subject to
the condition that the grounds relied upon in the said statement, except the
ground of fraud, or any wilful-misstatement or suppression of facts to evade
tax."
9. Therefore, at present no prejudice is being caused to the petitioner to
participate in the show cause notice proceedings. Learned counsel for the
petitioner submits that even if the petitioner participates and proper officer
may pass order under Section 73, but the period of limitation under Section
73 is 3 years, whereas the limitation under Section 74 is 5 years, therefore,
this SCN proceeding would be time barred. This issue will also be decided
by the authority after considering the material against the petitioner.
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10. The Apex Court in the case of State of Maharashtra & 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 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 by-pass 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
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authority shall decide and dispose of the same on its own merits in
accordance with law without raising any question of limitation,
however, 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."
11. In view of the above, the petition is dismissed. The proper officer
shall not be influenced by any observations made hereinabove.
(VIVEK RUSIA) (BINOD KUMAR DWIVEDI)
JUDGE JUDGE
trilok
