Madhya Pradesh High Court Rejects GST Writ for Delay and Breach of Pre-Deposit Requirement
Overview of the Dispute
The case of Mohd. Naseem Khan Vs State of Madhya Pradesh And Others came before the Madhya Pradesh High Court as a writ petition under Article 226 of the Constitution. The assessee challenged:
- An assessment order dated 11.04.2023 passed under
Section 74of the Central Goods and Service Tax Act, 2017 (CGST Act, 2017) and corresponding provisions of the MP GST Act, 2017, relating to Financial Year 2018-19; and - An appellate order dated 03.03.2025 passed by the Joint Commissioner of State Tax, Bhopal Division, acting as the First Appellate Authority, dismissing the statutory appeal.
The High Court ultimately declined to interfere, primarily on the grounds of:
- Inordinate delay,
- Non-compliance with the mandatory pre-deposit condition, and
- Availability of alternate statutory remedies, including an appeal before the GST Tribunal.
Factual Background
Business and Registration Details
The assessee was operating a restaurant business as a sole proprietorship under the trade name Radisson Binakurwai Road Restaurant. A valid GST registration had been obtained and a GSTIN and registration certificate were issued by the department.
Subsequently, the assessee surrendered the GST registration on 12.04.2021, and this surrender was accepted by the department. However, the surrender did not impact the earlier period’s liability, which was under scrutiny for 01.04.2018 to 31.03.2019.
Initiation of Proceedings under Section 61
The State Tax Authorities initiated scrutiny proceedings under Section 61 of the CGST Act, 2017. On 02.01.2021, the jurisdictional officer (respondent no. 3) issued ASMT-10:
- Allegation: Mismatch between GSTR-1 (outward supply details) and GSTR-3B (summary returns).
- Proposal: Calling upon the assessee to pay tax of Rs.34,34,082/-.
This notice was uploaded on the GST portal. According to the record, no reply was furnished by the assessee to this notice.
The assessee’s stand before the Court was that he was unaware of the issuance of this notice as it was available only on the portal and he did not receive any physical communication.
Show Cause Notice and DRC-01 under Section 74
Following the non-response to Section 61 notice, the department escalated proceedings under Section 74 of the CGST Act, 2017. On 06.02.2021, a show cause notice in DRC-01 was issued:
- Tax demanded: Rs.34,50,938/-
- Interest: Rs.18,30,340/-
- Penalty: Rs.8,62,734/-
The assessee contended that this Section 74 notice was reflected under an “additional notice tab” on the portal and, therefore, he remained unaware of its existence and did not file any reply or appear before the authority.
The department, however, treated service through the portal as due and proper.
Ex Parte Order under Section 74
As there was no response from the assessee, the Assistant Commissioner of State Tax, Vidisha Circle, Bhopal Division proceeded ex parte and passed an order dated 11.04.2023 under Section 74:
- Confirming the tax demand,
- Imposing interest and penalty, and
- Finalizing the liability for the period in question.
This order (Annexure P-1) became the subject matter of challenge, initially before the appellate authority and later in the writ petition.