M/S K.M. FOODS INFRASTRUCTURE PVT LTD V. JOINT COMMISSIONER AND ANOTHER

WTAX/1111/2023

AI Insights

The case involves multiple writ petitions filed by M/S K.M. Foods Infrastructure Pvt Ltd and M/S Apparent Marketing Pvt Ltd against orders passed by the Deputy Commissioner, State Tax, Ghaziabad, concerning tax liabilities and penalties imposed under the UPGST Act, 2017/CGST Act, 2017 for the financial year 2017-18. The petitions challenged the legality of the tax and penalty imposed on the grounds of improper procedure and lack of evidence linking the petitioners to the alleged misuse of e-way bills by other firms. The court found that the respondents had considered the objections raised by the petitioners and had not committed any procedural impropriety. The court also noted the availability of an alternative statutory remedy through an appeal under Section 107 of the UPGST Act, 2017/CGST Act, 2017, which was deemed sufficient to address the grievances of the petitioners.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 725798 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 26-09-2023
• Assessment Year: misc
• Other Referred Cases: Durga Rice Mills versus CCT, Sunil Kumar Sushil Kumar versus CCT, M/s Honey Furnitures versus CTT, S/S Ram Dutt Sharma versus CTT, CTT versus Balvant Singh Jagroshan Lal
• Laws Referred To: UPGST Act, 2017, CGST Act, 2017
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: C S C
• Assessee Lawyers: POOJA TALWAR
• Keywords: Interest; Penalty; Search and seizure; Show cause notice; Suppressed turnover; Tax liability; Writ Tax; E-way Bill Misuse
• Section: 50; 74; 107; 122

Judgement Text

"Neutral Citation No. - 2023:AHC:188651-DB Chief Justice's Court i) Case :- WRIT TAX No. - 1111 of 2023 Petitioner :- M/S K.M. Foods Infrastructure Pvt Ltd Respondent :- Joint Commissioner And Another Counsel for Petitioner :- Pooja Talwar Counsel for Respondent :- C.S.C. Along with ii) Case :- WRIT TAX No. - 1112 of 2023 Petitioner :- M/S Apparent Marketing Pvt Ltd Respondent :- Commissioner Commerical And Another Counsel for Petitioner :- Pooja Talwar Counsel for Respondent :- CSC iii) Case :- WRIT TAX No. - 1113 of 2023 Petitioner :- M/S Apparent Marketing Pvt. Ltd. Respondent :- Commissioner, Commercial Tax And Another Counsel for Petitioner :- Pooja Talwar Counsel for Respondent :- CSC iv) Case :- WRIT TAX No. - 1114 of 2023 Petitioner :- M/S K.M. Foods Infrastructure Pvt Ltd Respondent :- Joint Commissioner And Another Counsel for Petitioner :- Pooja Talwar Counsel for Respondent :- CSC v) Case :- WRIT TAX No. - 1115 of 2023 Petitioner :- M/S Apparent Marketing Pvt Ltd Respondent :- Commissioner Commercial Tax And Another Counsel for Petitioner :- Pooja Talwar Counsel for Respondent :- CSC Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Ashutosh Srivastava,J. 1. All the above referred writ petitions involve identical questions of law and facts. The Writ Tax No. 1111 of 2023 is being treated as the leading writ petition and the facts pertaining to the same are being considered for deciding the controversy involved. 2. Heard Smt. Pooja Talwar, learned counsel for the petitioner and Shri Ankur Agarwal, learned counsel for the respondents. 3. The challenge laid in this writ petition is to the order dated 28.6.2023 passed by the Deputy Commissioner, State Tax, Khand- 14, Ghaziabad/respondent No. 2 exercising powers under Section 74 read with Section 122 of the UPGST Act, 2017/CGST Act, 2017 in respect of the financial year 2017-18 whereby and whereunder taking into consideration the materials on record tax on suppressed turnover of Rs.24,12,948/- has been determined as Rs.6,75,625/- (CGST Rs.3,37,812.50, SGST Rs.3,37,812.50) and cess Rs.38,60,717/- total tax Rs.45,36,342/- has been determined to be payable. A penalty liability of Rs.45,36,342/- equal to the prescribed tax and cess have been determined. The total amount payable has been determined to be Rs.90,72,684/-. The amount of tax determined at Rs.45,36,342/- as per rules has been made subject to interest payable upto the date of deposit in terms of Section 50 of the Act. 4. It is the case of the petitioner that it is a registered dealer having valid GSTIN No. 09AAFCK5658Q1ZM and is engaged in the purchase and sale of Paan Masala and Tobacco. An illegal search and seizure proceeding was undertaken at the business premises of the petitioner on 19.7.2019 by the respondent No. 1 in continuation of action taken on M/s Kay Pan Fragrances Pvt. Ltd., Ghaziabad and M/s Mahaveer Trading Co. on the basis of adverse information issued by the Special Task Force (STF) Commercial Tax, Lucknow in respect to the misuse of the e-way bills by the said firms. The petitioner has not made any inward supplies from either of the two firms and in absence of any transactions done with the said firms, no adverse inference could have been drawn against the petitioner. The petitioner was issued a show cause notice dated 3.12.2022 for the period July, 2017 to March, 2018 in Form DRC-01 under Section 74 read with 122 of the UPGST, 2017/CGST Act, 2017 on the basis of the adverse information (SIB). The copy of the SIB report disclosing the adverse material was not supplied to the petitioner. The petitioner filed detailed reply to the show cause notice. The reply submitted by the petitioner has not found favour with the respondent and the impugned order dated 28.6.2023 has been passed. 5. It has been argued that the entire proceedings initiated against the petitioner is illegal inasmuch as the show cause notice under Section 74 read with Section 122 of the UPGST, 2017/CGST Act, 2017 does not specify the violation or infringement of any of the provisions of the Act. The impugned order levels various allegations regarding the misuse of the e-way bills by the two firms and no evidence has either been provided or disclosed as to how and when the petitioner is stated to have misused or caused double movement of the e-way bills. The tax liability has been fastened upon the petitioner merely on the basis of the SIB report. In the absence of any evidence against the petitioner, it cannot be fastened with the tax liability under the impugned order. Reliance is placed upon the decisions rendered in the case of Durga Rice Mills versus CCT (2022) 49 VLJ-03; Sunil Kumar Sushil Kumar versus CCT (2022) UPTC (111)-899; M/s Honey Furnitures versus CTT 2007 (41) STJ 7, 2008 NTN (Vol.38) 216; S/S Ram Dutt Sharma versus CTT 2008 UPTC 280 and CTT versus Balvant Singh Jagroshan Lal 2009 (10) VLJ 233. 6. Shri Ankur Agarwal, learned counsel for the respondents has argued that the impugned order does not suffer from any infirmity warranting any interference by this Court. All the grounds raised in the writ petition were raised before the respondent No. 2 which have been dealt with and only after considering all aspect of the matter, the order dated 28.6.2023 has been passed. There is no procedural impropriety committed by the respondent No. 2 so as to invite interference under Article 226 of the Constitution. Moreover, the petitioner has an efficacious alternative remedy of filing an appeal under Section 107 of the UPGST Act, 2017/CGST Act, 2017 and as such the writ petition is not maintainable. Reliance upon the decision rendered by the Apex Court in Commissioner of Income Tax and others versus Chhabil Das Agarwal, reported in 2014 (1) Supreme Court Cases 603 has been placed to buttress the point that when a statutory forum is created by law for redressal of grievances, writ petition should not be entertained ignoring the said statutory dispensation. He submits that though the said proposition may have exceptions i.e. where remedy available under the statute is not effective but only mere formality with no substantial relief; where statutory authority has not acted in accordance with provisions of the enactment in question; or acted in defiance of fundamental principles of judicial procedure or where the statutory authority has resorted to invoke provisions which have been repealed or where it has passed the order in total violation of the principles of natural justice, the statutory remedy may be bypassed. However, in the case at hand none of the exceptions are attracted. The writ petition thus is not maintainable and is liable to be dismissed at the threshold on the ground of alternative remedy. 7. We have heard the respective counsels and have given our thoughtful consideration to the respective submissions. We have also perused the record. From the tenor of the impugned order, we find that the respondent No. 2 has passed the impugned order after due consideration of the objections of the petitioner taken before him. We find no procedural impropriety committed by the respondent No. 2 in passing the impugned order. 8. In our opinion, this is not a fit case where the statutory remedy of Appeal under Section 107 of the UPGST Act, 2017/CGST Act, 2017 can be bypassed. All the writ petitions are accordingly dismissed on the ground of availability of alternative remedy. However, liberty is granted to the petitioner to file an appeal under Section 107 of the Act before the Appellate Authority within a period of three weeks from today. 9. In the eventuality of the petitioner filing the appeal within the time allowed by this Court, the Appellate Authority shall proceed to decide the same on merits ignoring the aspect of limitation after giving due opportunity of personal hearing to the petitioner in accordance with law. Order Date :- 26.9.2023 Ravi Prakash (Ashutosh Srivastava, J.) (Pritinker Diwaker, CJ.) Digitally signed by :- RAVI PRAKASH High Court of Judicature at Allahabad "