M/S Moral Pharmaceuticals Private Limited vs The Union Of India

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The petitioner, a private limited company engaged in the supply of pharmaceutical goods with its principal place of business at Patna, Bihar, filed a writ petition before the Patna High Court challenging circulars issued by the Central Board of Indirect Taxes and Customs (CBIC), a show-cause notice, and a demand order issued under Sections 73 and 74 of the CGST/BGST Act, 2017 for alleged non/short payment of GST amounting to Rs. 5,10,00,146/- for the period July 2017 to March 2018.

The petitioner challenged the validity of CBIC Circulars No. 3/3/2017-GST, 31/05/2018-GST, and 169/01/2022-GST on the ground that the Board lacked the power to assign functions of 'proper officer' to Central Tax Officers. The petitioner further contended that the show-cause notice and demand order were issued without digital signatures as mandated by Rule 26(3) of the CGST/BGST Rules, 2017, without fulfilment of mandatory pre-conditions under Section 74, in violation of GST Instructions No. 04/2023 and 05/2023, and without providing a personal hearing as required under Section 75(4) of the CGST/BGST Act, 2017.

Additional grounds urged included that the proceedings were barred by limitation under Section 73(10), that the extended period of limitation under Section 74 was inapplicable for want of necessary pre-conditions, and that no notice under Rule 99 read with Section 61 of the CGST/BGST Act was issued prior to initiation of proceedings, rendering the entire proceedings violative of the principles of natural justice.

Catchwords: GST CGST BGST show-cause notice demand order proper officer CBIC circulars digital signature Rule 26(3) Section 73 Section 74 Section 75(4) Section 61 Rule 99 personal hearing natural justice limitation pharmaceutical company Bihar writ of certiorari