Madhya Pradesh HC Slaps ₹2 Lakh Cost on Tobacco Company for Filing Repetitive Plea to Stall ₹200 Cr GST Evasion Proceedings [Read Order]

Elora Tobacco Company Limited, the petitioner, approached the High Court through its director, Dharmendra Singh Parmar, seeking directions to the GST Department to provide certified copies of certain reports and statements of officers and to allow cross-examination of the officials whose statements were relied upon in the show cause notice.

The petitioner’s counsel argued that excise officers were posted round the clock at the company’s premises and were responsible for maintaining records such as production and clearance registers. They further argued that these documents were necessary for the company to prepare its defence in the proceedings arising from show cause notices issued in 2022 for alleged tax evasion amounting to more than Rs. 200 crore.

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The respondents’ counsel pointed out that the same reliefs had already been sought and granted in a previous writ petition filed by the company, and the Supreme Court had also directed the department to provide certified copies of all missing and non-relied documents.

The counsel explained that all relied and non-relied documents had already been given to the petitioner, and the company had also cross-examined 11 witnesses whose statements were part of the show cause notice.

The Division Bench comprising Justice Vivek Rusia and Justice Binod Kumar Dwivedi observed that the present petition was identical to the earlier one decided by the High Court and later affirmed by the Supreme Court. The court found that there was no fresh cause of action and that the petition had been filed with the intention of delaying the adjudication proceedings pending before the GST authorities.

The court further observed that the argument that excise officers were responsible for maintaining the statutory records was baseless. It explained that under Section 35 of the CGST Act, 2017, and Rule 56, it is the duty of the registered taxpayer to maintain true and correct accounts of production, stock, and supply of goods, and not that of the departmental officers.

The court held that the petition was not maintainable and had been filed with a mala fide intent to stall the tax proceedings. The court dismissed the writ petition and directed the petitioner to pay Rs. 2,00,000 as cost to the GST Department within four weeks.

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