MP Supreme Court Rejects Claim

The Madhya Pradesh High Court dismissed a writ petition filed by Future Consumer Limited in the Indore court challenging an order passed by the State Deputy Commissioner of Taxation under Section 73 of the GST Act. The petitioner stated that he was denied the right to a personal hearing under Section 75(4) of the Act.

The dividing bench consists of: Judge Vivek Russia and Judge Binod Kumar Dwivedi The plaintiff’s argument regarding the satisfaction of the procedural requirements for requesting a personal hearing is disputed.

“The petitioner did not choose to raise any objection within the limitation period and approached this Court directly through writ petition only on the ground that he was not afforded the opportunity of personal hearing contemplated under Section 75(4) of the GST Act. Therefore the order cannot be maintained legally.”

The court found that Future Consumer Limited did not appear before the tax authority and did not seek any written reply or personal hearing in response to the show-cause notice issued under Section 73(1).

The court stated: “Subsection (4) of Article 75 of the GST Act states that an opportunity for hearing will be given if a written request is received from the person responsible for the tax or penalty or if any negative decision is considered against that person. The Division Bench of this Court held that opportunity for hearing means opportunity for hearing to individuals and if opportunity for personal hearing is not provided, the order is unsustainable and liable to be set aside.”.

The court held that the case referred to by the plaintiffs i.e. M/s Technosys Security System Pvt. Ltd. – The Commissioner of Commercial Taxes case is different and in this case the petitioner filed an answer but was not given the chance for a personal hearing. In this case, the petitioner did not respond to the show-cause notice or attend the scheduled hearing before the Deputy Commissioner. The court stated that personal hearings must be requested in writing under Section 75(4) of the GST Act or at least orally if the party is present.

“If the person, after receiving the reasoned notice, chooses not to appear before the competent authority to answer or request a personal hearing, he cannot claim that he was denied the opportunity for a hearing after making the final decision. Therefore, the plaintiff’s case is M/s Technosys Security System Pvt. Ltd.’s case. Ltd..”

The present case relates to the imposition of tax liability of Rs. 86,73,188 and interest and penalties of Rs. 1,16,65,438. The petitioner submitted that the order was unfair as it denied him the right to personal hearing provided under Section 75(4). The petitioner quoted: M/s Technosys Security System Pvt. Ltd.. A case in which it is decided that a personal hearing is necessary if requested, even if it is not expressly requested in writing. The applicant claimed that they had the right to resort to the same remedy because the circumstances were similar.

The court stated that the plaintiff did not provide any response or requested a hearing, so they could not claim that the opportunity for a hearing was denied. The petition was rejected and the court ruled that the plaintiff had the right to appeal to the appellate authority, as well as to request forgiveness of the delay.

“The petitioner may, if advisable, file an objection on the merits together with an application for confirmation of delay before the Appellate Authority..”

Case Title: M/S Future Consumer Limited Vs State of Madhya Pradesh and Others

Case Number: WP-29375-2024