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of <h1>Writ dismissed; petitioner must pursue statutory GST appeals after alleged fraudulent input tax credit and unclear SCN reply consideration</h1> <h3>SD Polymers Through Its Proprietor Prop. Hem Lata Gupta Versus Commissioner Of Central Goods And Service Tax And Anr.</h3> SD Polymers Through Its Proprietor Prop. Hem Lata Gupta Versus Commissioner Of Central Goods And Service Tax And Anr. - 2025:DHC:6825 - DB 1. ISSUES PRESENTED and CONSIDERED Whether the Show Cause Notice (SCN) and subsequent demand order were issued within the prescribed limitation period. Whether the reply filed by the petitioner to the SCN was duly considered by the adjudicating authority. Whether the petitioner was afforded the opportunity of personal hearing in accordance with the principles of natural justice. Whether the writ petition under Article 226 is maintainable in the context of the availability of alternate statutory remedies under the CGST Act. Whether the allegations of fraudulent availment of Input Tax Credit (ITC) on the basis of goods-less invoices by non-existent firms are sustainable on the facts and law. Whether the adjudicating authority was justified in proceeding ex parte due to non-appearance of the petitioner or its authorized representatives at personal hearings. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Limitation for issuance of Show Cause Notice and demand order - Relevant Legal Framework and Precedents: The limitation period for issuance of orders under the CGST Act is prescribed by statute. The date of issuance of the order is critical for determining limitation, not the date of uploading on the GST portal. - Court's Interpretation and Reasoning: The impugned order was dated 1st February, 2025, while the Form DRC-07 was uploaded on 9th February, 2025 due to a technical glitch. The Court held that the order was issued within the limitation period as the date of the order governs limitation, not the date of uploading. - Key Evidence and Findings: The order bears the date 1st February, 2025, signed by the Additional Commissioner, CGST (North). The delay in uploading on the GST portal was attributed to technical issues. - Application of Law to Facts: The Court rejected the limitation plea, holding that the impugned order was validly issued within time. - Treatment of Competing Arguments: The petitioner argued belated issuance based on the portal upload date; the Court rejected this argument relying on statutory interpretation and precedent. - Conclusion: The demand order is not barred by limitation. Issue 2: Consideration of the petitioner's reply to the Show Cause Notice - Relevant Legal Framework and Precedents: Principles of natural justice require that replies to SCNs be considered. However, the adjudicating authority may proceed ex parte if the party fails to appear or adequately respond. - Court's Interpretation and Reasoning: The impugned order records that personal hearings were granted on multiple dates and replies were considered for those who appeared or submitted responses. It is unclear whether the petitioner's reply was considered, but the Court notes a faint stamp indicating receipt. - Key Evidence and Findings: The adjudicating authority's order states that replies from some noticees were considered, but the petitioner neither appeared for personal hearing nor clearly established that its reply was considered. - Application of Law to Facts: The Court observed that the petitioner may raise non-consideration of its reply in the appellate proceedings but did not find grounds to interfere at the writ stage. - Treatment of Competing Arguments: The petitioner contended non-consideration of its reply; the Department asserted personal hearings were granted and replies considered where submitted. - Conclusion: No interference at writ stage; petitioner may raise this issue in appeal. Issue 3: Opportunity of personal hearing and adherence to principles of natural justice - Relevant Legal Framework and Precedents: Natural justice mandates opportunity of personal hearing before adverse orders. An adjudicating authority is entitled to proceed ex parte if the party fails to appear despite notice. - Court's Interpretation and Reasoning: The impugned order discloses that personal hearings were granted on three occasions. The petitioner and other noticees failed to appear. The adjudicating authority proceeded ex parte based on available records. - Key Evidence and Findings: The impugned order references multiple personal hearing dates and absence of the petitioner or authorized representatives. The Court referred to a precedent affirming ex parte adjudication in such circumstances. - Application of Law to Facts: The Court found that the principles of natural justice and adjudication were duly followed and opportunities were provided. - Treatment of Competing Arguments: Petitioner's argument of denial of personal hearing was rejected based on record of multiple hearings granted and non-appearance. - Conclusion: No violation of natural justice; ex parte adjudication justified. Issue 4: Maintainability of writ petition under Article 226 versus alternate remedy under CGST Act - Relevant Legal Framework and Precedents: Supreme Court jurisprudence establishes that writ petitions under Article 226 challenging orders under the CGST Act are maintainable only under exceptional circumstances such as breach of fundamental rights, violation of natural justice, excess of jurisdiction, or challenge to vires of statute. - Court's Interpretation and Reasoning: The Court relied on the Supreme Court decision which held that alternate statutory remedies under Section 107 of the CGST Act must be availed, and writ petitions should not be entertained absent exceptional circumstances. - Key Evidence and Findings: No breach of fundamental rights or violation of natural justice was established. The petitioner failed to show exceptional circumstances warranting writ jurisdiction. - Application of Law to Facts: Given the availability of statutory appellate remedy, the Court relegated the petitioner to pursue appeal rather than entertain writ petition. - Treatment of Competing Arguments: Petitioner argued writ petition maintainability; Court emphasized adherence to statutory remedy and precedent. - Conclusion: Writ petition not maintainable; petitioner must avail appellate remedy. Issue 5: Allegations of fraudulent availment of Input Tax Credit on goods-less invoices issued by non-existent firms - Relevant Legal Framework and Precedents: The CGST Act prohibits fraudulent availment of ITC. The adjudication involves detailed factual inquiry into transactions, genuineness of suppliers, and invoice authenticity. - Court's Interpretation and Reasoning: The impugned order records that multiple non-existent firms issued goods-less invoices, resulting in wrongful availment of ITC by 106 noticees including the petitioner. The Court noted that such complex factual issues require detailed adjudication and cannot be resolved in writ jurisdiction. - Key Evidence and Findings: SCN and impugned order detail involvement of fake firms controlled by certain individuals, and the quantum of ITC fraudulently availed by the petitioner. - Application of Law to Facts: The Court refrained from delving into merits, emphasizing that these matters require thorough investigation and adjudication via statutory process. - Treatment of Competing Arguments: Petitioner challenged the allegations; Court deferred to statutory authorities for fact-finding. - Conclusion: Allegations of fraudulent ITC availment require adjudication in appeal; not suitable for writ interference. Issue 6: Adjudicating authority's right to proceed ex parte due to non-appearance - Relevant Legal Framework and Precedents: Established legal principle that adjudicating authority may proceed ex parte if the party fails to appear despite notice. - Court's Interpretation and Reasoning: The impugned order records multiple personal hearing dates with non-appearance by the petitioner. Reliance was placed on precedent affirming ex parte proceedings under such circumstances. - Key Evidence and Findings: Absence of petitioner or authorized representatives at personal hearings documented in the order. - Application of Law to Facts: The Court held that the adjudicating authority was entitled to proceed ex parte and that the petitioner forfeited the right to future claims of violation of natural justice. - Treatment of Competing Arguments: Petitioner argued denial of opportunity; Court found adequate opportunity was afforded and non-appearance justified ex parte adjudication. - Conclusion: Ex parte adjudication valid and justified. Additional Observations - The Court allowed the petitioner to file an appeal by a specified date with requisite pre-deposit, and directed that such appeal would not be dismissed on limitation grounds. - All rights and contentions of the petitioner remain open for consideration in the appellate proceedings. - Pending applications related to the writ petition were disposed of along with the main petition.
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