Facts of the Case

The petitioner, M/S Modern Steel, a proprietorship firm engaged in trading of MS Angle and steel items and registered under both the UPGST Act and the CGST Act, challenged a show-cause notice dated 17.02.2022, the consequential order dated 22.03.2022 passed under Section 74(9) imposing tax, interest and penalty for the period June 2019 (FY 2019-20), and the appellate order dated 11.08.2023 dismissing its first appeal as time-barred. The petitioner had not replied to the original show-cause notice. Before the Allahabad High Court in Writ Tax No.1192 of 2023, the matter was heard on 19th October 2023 by a Single Judge.

Issues Involved

  1. Whether personal hearing under Section 75(4) of the CGST/UPGST Act was mandatory before passing the Section 74(9) order, despite the assessee not replying to the show-cause notice.
  2. Whether the period of limitation for filing the appeal stood extended pursuant to the 52nd GST Council Meeting decision to grant amnesty for appeals against Section 74 orders passed on or before 31st March 2023.

Petitioner's Arguments

  • No opportunity of personal hearing, as mandated under Section 75(4) of the CGST Act, was granted before the final order was passed, relying on M/s Mohan Agencies v. State of U.P. and M/s Viswkarma Furniture v. Additional Commissioner.
  • The appellate authority was not justified in dismissing the appeal on limitation, since the GST Council, at its 52nd Meeting on 7th October 2023, had extended the appeal filing deadline under Section 107 of the CGST Act to 31st January 2024 for orders passed under Section 74 on or before 31st March 2023.

Respondent's Arguments

  • The CGST Act is a special, self-contained statute; Section 107 impliedly excludes the application of the Limitation Act, relying on Penuel Nexus Pvt. Ltd. v. Additional Commissioner (Kerala HC) and Commissioner of Customs & Central Excise v. Hongo India (P) Ltd.
  • Once the appeal was filed beyond the statutory limitation and the extended condonable period, delay could not be condoned, and the grounds of appeal disclosed no valid explanation for the delay.

Court Order/Findings

  • The Court distinguished the precedents relied on by the petitioner, noting that in those cases the assessee had replied to the notice but was denied a hearing, whereas here no reply was ever filed, so Section 75(4) was not attracted.
  • The Court found no plausible ground for condoning the delay beyond the statutory period under Section 107(4) and held the appellate authority had rightly dismissed the appeal on limitation as it then stood.
  • The Court held that since the GST Council had since extended the limitation for filing appeals against Section 74 orders till 31st January 2024 under the amnesty scheme, the matter deserved to be remanded to the Appellate Authority to re-examine the question of limitation afresh in light of that extension.
  • The original notice and assessment order were left undisturbed, but the appellate order dated 11.08.2023 was set aside solely on the limitation aspect, and the writ petition was disposed of accordingly.

Important Clarification

Personal hearing under Section 75(4) is mandatory only where the assessee has responded to the show-cause notice or specifically requested a hearing; a subsequent GST Council amnesty extension of the appeal-filing period, however, applies retrospectively to appeals already dismissed as time-barred and requires the appellate authority to reconsider limitation afresh.

Sections Involved

  • Sections 74, 75(4) and 107 of the Central Goods and Services Tax Act, 2017 and the corresponding Uttar Pradesh Goods and Services Tax Act, 2017.
  • Amnesty extension pursuant to the 52nd GST Council Meeting held on 7th October 2023.

Decision – In Favour of

The outcome is mixed but leans in favour of the Assessee on the limitation question. The Court declined to interfere with the original notice and Section 74(9) demand order, rejecting the personal-hearing argument, but it set aside the appellate dismissal and remanded the limitation issue for fresh consideration under the GST Council's amnesty extension, giving the petitioner another opportunity to have the appeal admitted.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Allahabad High Court
  • Case No.: Writ Tax No.1192 of 2023
  • CNR: Not available
  • Coram: Justice Rohit Ranjan Agarwal
  • Decision Date: 19-10-2023
  • Disposal Nature: Writ petition disposed of, appeal remanded on limitation issue under GST amnesty scheme

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