2025(04)LCX0432

Ashirwad Inds.

Versus

Union of India

WRIT PETITION No. 7056 of 2025 decided on 24-04-2025

IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE

HON'BLE SHRI JUSTICE SANJEEV SACHDEVA
&
HON'BLE SHRI JUSTICE VINAY SARAF

ON THE 24^th OF APRIL, 2025

WRIT PETITION No. 7056 of 2025

ASHIRWAD INDUSTRIES, A PARTNERSHIP FIRM
Versus
UNION OF INDIA AND OTHERS

Appearance:

Shri Anshuman Singh - Advocate for the petitioner.

Shri R. D. Padhraha - Govt. Advocate for the respondents No.2 to 6

ORDER

Per: Justice Vinay Saraf

Petitioner a partnership firm has challenged the order dated 19.01.2022 passed by Commissioner, CGST and Central Excise, Jabalpur, order dated 31.01.2023 passed by the Joint Commissioner (Appeals), CGST and Central Excise, Bhopal, order dated 13.12.2023 passed by Superintendent, CGST and Central Excise, Rewa and order dated 04.07.2024 issued by the Assistant Commissioner, Central Goods and Service Tax and Central Excise, Rewa Division, Rewa, in the present petition.

2. With the consent of the parties, final arguments were heard for the purpose of final disposal of the petition.

3. From the pleadings of the parties and documents available on record, the following facts reveal in the case:-

3.1 Petitioner is a partnership firm having its registered office at Murad Nagar, Ghaziabad (UP) and is engaged in the business of manufacturing and trading of cold roll form sections, pre-fabricated building systems and structural steel and allied products. The petitioner firm was having GST registration No.O9AAHFA4616R3ZW issued for the purpose of business in the State of U.P.

3.2 Petitioner firm supplied certain goods to Larsen and Toubro Company at its plant situated at Rewa. One of the consignments was detained by the Sales Tax Department on the allegation that wrong address was mentioned in the e-Way bill. As per e-Way bill the distribution address was of Bhopal, whereas the goods were supplied at Rewa. Considering the same, the department imposed penalty upon the petitioner firm, which was paid by the petitioner firm and the petitioner firm challenged the order of penalty dated 09.03.2019 before the Appellate Authority, Satna Division cum Joint Commissioner, State Tax Bhopal, which was allowed by the order dated 24.08.2020 and the penalty imposed by the State Tax Officer, AEB Satna by order dated 09.03.2019, was set aside and direction was issued to refund the amount of penalty to the petitioner firm. The order was passed mentioning GST Number of Ghaziabad of the petitioner firm as well as temporary number of GST TN i.e. 231950291TMP. During this period, the petitioner firm applied for registration in the State of M.P. and registered at GSTIN 23AAHFA4616R1Z8.

3.3 The order passed by the appellate authority dated 24.08.2020 by which the penalty was set aside and the direction was issued to refund the amount of penalty already paid by the petitioner was not challenged before any competent forum and has attained finality.

3.4 In furtherance of the order passed by the appellate authority, the petitioner applied for refund of the amount of penalty already deposited by the petitioner using GSTIN 23AAHFA4616R1Z8 of MP, which was registered later on. The refund was allowed and the amount of penalty was refunded to the petitioner.

3.5 The Commissioner, CGST and Central Excise, Jabalpur by exercising its power conferred under Section 107(2) of CGST Act, 2017 has called for and had examined the record of the proceedings, in which the Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa has allowed the refund on 07.08.2021 amounting to Rs.2,24,118/-. In the case of petitioner firm for the purpose of satisfying himself as to legality and propriety of the said order, the Commissioner after examining the same has held that the order was not correct, legal and proper for the reasons mentioned in the review order dated 19.01.2022 by which the Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa was directed to file an appeal in an appropriate forum before the Joint Commissioner (Appeals), CGST and Central Excise, Bhopal under Section 107(2) of the CGST Act, 2017 immediately with a prayer to set aside the refund sanctioned order dated 7.8.2021 by which the amount of Rs.224118/- deposited by the petitioner firm was returned to the petitioner under GSTIN 23AAHFA4616R1Z8 of MP. The review order was passed on the ground that the tax and penalty was deposited by M/s Ashirwad Industries, Ghaziabad having GSTINO9AAHFA4616R3ZW whereas the refund was allowed to M/s Ashirwad Industries, Rewa in GSTIN 23AAHFA4616R1Z8, which was not in accordance with the provisions of Section 54 of CGST Act, 2017.

3.6 In compliance of review order, Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa preferred Appeal under Section 107(2) of the CGST Act, 2017 assailing the order dated 07.08.2021 before the Commissioner (Appeals), CGST and Central Excise, Bhopal.

3.7 Appellate Authority claimed that three opportunities of personal hearing through virtual/physical provided to the petitioner firm on 19.01.2023, 22.01.2023 and 30.01.2023 respectively, however, petitioner firm did not turn-up therefore, the appeal was decided ex-parte. By order dated 31.01.2023, the appeal was allowed and the refund order dated 07.08.2021 was held improper, illegal and incorrect. In terms of Section 54 of CGST Act, 2017, it is held that petitioner firm was not entitled to claim refund of Rs.2,24,118/- in M.P. registration number and direction was issued to recover the said amount from petitioner firm.

3.8 The appellate authority has recorded the finding that the tax and penalty was paid by M/s. Ashirwad Industries, Ghaziabad vide challan mentioning GST Number of Ghaziabad of the petitioner firm as well as Temporary number GSTIN 281900000291TMP and the appeal against the imposed of tax and penalty was also preferred by M/s Ashirwad Industries, Ghaziabad but refund was claimed by M/s Ashirwad Industries, Rewa having its permanent GSTIN number, therefore, refund order was passed in favour of different entity.

3.9 The appeal was preferred by the department of M/s. Ashirwad Industries, Rewa and the notices were issued at the address of Rewa and as per the petitioner firm, in the absence of knowledge, the petitioner firm could not appear before the appellate authority, consequently, the ex-parte order was passed on 31.01.2023.

3.10 In compliance of the order passed by the Commissioner (Appeals), Bhopal, Superintendent, CGST and Central Excise, Rewa cum Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa issued show cause notice to the petitioner firm at the address of Rewa demanded the amount to be redeposited by the petitioner, within a period of 30 days. As per the petitioner, said notice was never served upon the petitioner firm.

3.11 On the basis of the said show cause notice, order in original was passed by Superintendent, CGST and Central Excise, Rewa on 13.12.2023 under Section 74(1) of the CGST Act, 2017 and demand of Rs.2,24,118/- on the ground of erroneously refunded to the petitioner firm was confirmed along with interest and 100% penalty amounting to Rs.2,24,118/-. During this proceeding, the petitioner remained absent. According to the petitioner, the petitioner never received any notice of the said proceeding.

4. On 04.07.2024, Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa issued notice to the third person i.e. Bank of Baroda, Delhi and Vijaya Bank, Delhi to hold the sum of Rs.5,86,318/- from the account of petitioner firm as the same is recoverable from the petitioner firm in execution of order dated 13.12.2023. When the bank received this order from the Assistant Commissioner, Rewa, the petitioner firm came to know about the aforesaid proceedings and preferred this petition before this Court on various grounds inter alia, original demand of penalty was already set aside by the appellate authority by order dated 24.08.2020 and the said order was not challenged before any authority and has attained finality, therefore, all subsequent actions taken by the department were illegal, unjust, incorrect, arbitrary and liable to be set aside. No illegality was committed by the petitioner firm in claiming refund amount as M/s. Ashirwad Industries, Ghaziabad and M/s Ashirwad Industries, Rewa are not two different entities. The allegations of fraud and willful misstatement or suppression of facts against the petitioner firm are incorrect. No notice of appeal was received by the petitioner firm allegedly issued by Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa and Joint Commissioner (Appeals), CGST and Central Excise, Bhopal. Similarly, show cause notice dated 29.08.2023 was never served upon the petitioner firm and order dated 13.12.2023 was passed without serving any notice to the petitioner.

5. Learned counsel Shri Anshuman Singh appearing on behalf of petitioner submits that petitioner firm succeeded in the appeal preferred challenging the imposing of tax and penalty and the appeal was allowed by order dated 24.8.2020, which attained finality. So far as entitlement of the petitioner firm to receive the refund, is not in dispute. He further submits that during the pendency of appeal, the petitioner firm obtained the permanent registration number in State of M.P. also and therefore, the petitioner firm applied for refund using the permanent registration number of M.P., which was allowed and refund was sanctioned to the petitioner firm. The order of review was passed behind the back by which the direction was issued to the Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa to prefer the appeal before the Commissioner (Appeals), CGST and Central Excise, Bhopal under Section 107(2) of CGST Act, 2017. However, no notice was served to the petitioner firm at its Ghaziabad address. As the petitioner firm is not having permanent business at Rewa, therefore, the petitioner firm was not aware of regarding the pendency of the appeal and consequently, could not appear before the Commissioner (Appeals), CGST and Central Excise, Bhopal. He further submits that in the absence of service of any notice to the petitioner, the order passed by the Commissioner (Appeals) is liable to be set aside and all the subsequent proceedings are also liable to be set aside. The petitioner ought to have been granted opportunity to defend the refund order before the Commissioner (Appeals). No such opportunity was actually granted to the petitioner. No notice was issued to the petitioner on the portal of CGSTIN number of Ghaziabad. He further submits that only on the basis of procedural technicalities, the impugned orders have been passed by the authorities treating the case of petitioner as having obtained the refund on the basis of fraud and misstatement and passed the order under Section 74 of the CGST Act, 2017. He prays for quashing the order dated 31.01.2023 and all subsequent orders and proceedings.

6. Learned counsel appearing on behalf of respondent department submits that no illegality is committed by the appellate authority in allowing the appeal and setting aside the refund order. The tax was deposited by M/s. Ashirwad Industries, Ghaziabad having different registration number, whereas the refund was claimed by M/s Ashirward Industries, Rewa having different number. He further submits that tax could be refunded to the same entity having same registration number whereas in the present matter the refund application was filed through different registration number, therefore, the Commissioner has exercised the power under Section 107(2) of the CGST Act, 2017 and issued direction to file the appeal before the Commissioner (Appeals) against the refund order. He further submits that notices were issued in the appeal by the Joint Commissioner of CGST and Central Excise, Bhopal and after providing opportunity of hearing to the petitioner, the appeal was decided by order dated 30.01.2023. He relied upon the provision of Section 25(4) of CGST Act, 2017, which provides that a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of CGST Act, and therefore, M/s. Ashirwad Industries, Ghaziabad who deposited the tax and penalty amount was different entity then M/s. Ashirwad Industries, Rewa, who claimed the refund. He supported the action of the authorities and submits that the appeal is liable to be dismissed.

7. After considering the facts and circumstances of the case as well as arguments advanced by the rival parties and documents available on record, it is not in dispute that tax and penalty was imposed upon M/s. Ashirwad Industries, Ghaziabad, which was deposited by the petitioner firm with the department and thereafter preferred an appeal, which was allowed by order dated 24.08.2020 and the order of appeal was not further challenged and consequently the order attained finality. Meaning thereby, petitioner firm was entitled for return of tax and penalty, which was paid by the petitioner firm on 09.03.2019 amounting to Rs.2,24,118/-.

8. The case of respondent department is based upon the allegation that after order dated 24.08.2020, the petitioner firm submitted the application for refund of the amount by mentioning the GSTIN number of M/s. Ashirwad Industries, Rewa and consequently, the refund order was passed in favour of M/s. Ashirwad Industries, Rewa and in this way a different entity has obtained the refund.

9. Whether M/s. Ashirwad Industries, Ghaziabad and M/s. Ashirwad Industries, Rewa are the same firm or different entity, it is a matter of evidence but the same could not be produced by the petitioner firm in the absence of receipt of notices of the appeal preferred by Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa before Joint Commissioner (Appeals), CGST and Central Excise, Bhopal,

10. Admittedly, no notice was issued to M/s. Ashirwad Industries, Ghaziabad and no acknowledgement of the notice has been brought on record by the respondent in the present petition to demonstrate that the notices of appeal were duly served upon the petitioner firm. The appeal was decided ex-parte. Notice of the appeal was also not uploaded on the portal of M/s. Ashirwad Industries, Ghaziabad. Even in the order dated 31.01.2023, it is not mentioned as to how the opportunity of personal hearing was provided to the petitioner firm through virtual/ physical mode. It is nowhere mentioned in the order that any notice was issued and the same was duly served to the petitioner firm or any authorized person.

11. In the above conspectus, we deem it just and proper to grant an opportunity to the petitioner firm to defend the Appeal No.34-GST/2022 preferred by Assistant Commissioner, CGST and Central Excise, Rewa Division, Rewa which was decided ex-parte as we are not satisfied that the notices of the appeal were properly served upon the petitioner firm.

12. Consequently, we hereby set aside the order dated 31.0.2023 passed by Joint Commissioner (Appeals), CGST and Central Excise, Bhopal and all consequent actions included show cause notice dated 29.08.2023, order in original dated 13.12.2023 and order to third party dated 04.07.2024. Appeal No.34- GST/2022 is hereby restored to its original number. The appellate authority is directed to decide the appeal afresh, after affording opportunity of hearing to the petitioner firm in accordance with law.

13. Petitioner is directed to appear before the appellate authority i.e. Joint Commissioner (Appeals), CGST and Central Excise, Bhopal on 05.05.2025.

14. With the aforesaid, present petition is partly allowed. No order as to costs.