HC dismisses writ petition challenging CGST assessment turnover calculation, directs petitioner to pursue statutory appeal remedy

The MP HC dismissed the writ petition challenging CGST assessment where the petitioner's annual turnover allegedly included CGST amounts contrary to statutory definition. The court held that statutory appeal remedy cannot be bypassed merely due to 10% pre-deposit requirement. Despite petitioner's claims of improper turnover calculation and denial of personal hearing violating natural justice, the court found that documentary evidence supporting the figures requires examination by assessing or appellate authorities, not the writ court. The petition was dismissed with liberty to file statutory appeal.

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Issues:
1. Challenge to order passed by Additional Commissioner, CGST and Central Excise on the payment of GST for the period 1/4/2017 to 31/3/2018.
2. Discrepancy in turnover declared in annual return and reconciliation statement.
3. Lack of opportunity for personal hearing to explain the discrepancy.
4. Imposition of GST demand, interest, and penalty on the petitioner.
5. Maintainability of the writ petition in light of the availability of the remedy of appeal.
6. Consideration of documents and merits of the case by the appellate authority.

Analysis:
1. The petitioner challenged the order passed by the Additional Commissioner, CGST and Central Excise regarding the payment of GST for a specific period. The dispute arose due to a discrepancy in the turnover declared by the petitioner in the annual return and the reconciliation statement. The petitioner, a Private Limited Company engaged in the retail/wholesale business of motor vehicles, submitted explanations for the inconsistency, attributing it to the inclusion of CGST in the turnover. The Additional Commissioner issued a notice under section 74 of the CGST Act, 2017, demanding payment of GST amounting to Rs. 40,24,49,457/- along with interest and penalty.

2. The petitioner contended that they were not afforded a proper opportunity for personal hearing to explain the discrepancy. Despite submitting oral and written explanations, the petitioner did not opt for personal hearing as the authorities seemed satisfied with the submissions. The petitioner argued that if an adverse decision was contemplated, a hearing should have been provided as per section 75(4) of the CGST Act, 2017. The petitioner raised concerns about the financial burden of appealing the order, which required payment of 10% of the total demand.

3. The respondents raised objections regarding the maintainability of the writ petition, citing the availability of the remedy of appeal under section 107 of the CGST Act, 2017. The respondents highlighted the discrepancy in the values declared by the petitioner in different sections of the GSTR-9C form, leading to an un-reconciled turnover.

4. The learned counsel for the respondents argued that the Additional Commissioner had validly rejected the petitioner's explanations and that the appellate authority should consider the merits of the case. Emphasizing the requirement of depositing 10% of the total recovery amount for an appeal, the respondents referred to relevant court decisions supporting the necessity of exhausting statutory appeal remedies.

5. The High Court dismissed the petition, emphasizing that the grounds raised by the petitioner could be addressed in the statutory appeal process. The court noted that the appellate authority could consider the documents and conduct of the assessing officers. It highlighted the importance of proper verification of contentions through supporting documents, which should be examined by the assessing or appellate authority, not the writ court. The petitioner was granted liberty to file an appeal as per the statutory process.

This detailed analysis showcases the key issues, arguments, and the court's decision in the legal judgment.

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