2020 (11) TMI 749 - HC - GST

Violation of principles of Natural Justice - Grievance of the petitioner is that while raising the demand of tax vide summary of order dated 18.09.2020 vide Annexure P/2, the foundational show-cause notice/order No.12 dated 10.06.2020 qua financial year 2018-2019 and tax period April, 2018 to March, 2019, was never communicated to the petitioner who is an individual registered under GST Act - Rule 142 of Central Goods and Services Tax Act, 2017 - HELD THAT - A bare perusal of the aforesaid provision reveals that the only mode prescribed for communicating the show-cause notice/order is by way of uploading the same on website of the revenue. The State in its reply has provided no material to show that show-cause notice/order No.12 dated 10.06.2020 was uploaded on website of revenue. In fact, learned AAG, Shri Mody, fairly concedes that the show-cause notice/order was communicated to petitioner by Email and was not uploaded on website of the revenue - It is trite principle of law that when a particular procedure is prescribed to perform a particular act then all other procedures/modes except the one prescribed are excluded. This principle becomes all the more stringent when statutarily prescribed as is the case herein. This Court has no manner of doubt that statutory procedure prescribed for communicating show-cause notice/order under Rule 142(1) of CGST Act having not been followed by the revenue, the impugned demand dated 18.09.2020 vide Annexure P/2 pertaining to financial year 2018-2019 and tax period April, 2018 to March, 2019 deserves to be and is struck down - Petition allowed.

Summary

Issues: Violation of natural justice in tax demand communication

Detailed Analysis:

Issue 1: Violation of Natural Justice
The petitioner invoked the writ and supervisory jurisdiction of the High Court under Articles 226 and 227 of the Constitution, seeking various reliefs, including quashing of the impugned order in Form GST DRC-07 dated 18.09.2020 and related orders under section 74 dated 10.06.2020. The grievance raised was that the foundational show-cause notice/order No.12 dated 10.06.2020, pertaining to the financial year 2018-2019 and tax period April 2018 to March 2019, was not communicated to the petitioner, who is a GST-registered individual.

Issue 2: Compliance with Rule 142 of CGST Act
The Court examined the provisions of Rule 142 of the Central Goods and Services Tax Act, 2017 (CGST Act), which statutorily obliges the revenue department to communicate show-cause notices/orders by uploading them on the revenue website. The petitioner's counsel highlighted the importance of this provision in ensuring access to information and reasons behind demands, enabling aggrieved parties to seek remedies under the CGST Act.

Issue 3: State's Response and Procedural Compliance
In response to the Court's requisition, the State disclosed that the show-cause notice/order No.12 dated 10.06.2020 was communicated to the petitioner via email. However, the State failed to demonstrate that the notice was uploaded on the revenue website, as required by Rule 142(1) of the CGST Act. The Court emphasized that when a specific procedure is prescribed by law, all other methods are excluded, especially when the statute explicitly mandates a particular course of action.

Judgment
The Court held that the revenue's failure to follow the statutory procedure of communicating the show-cause notice/order by uploading it on the revenue website amounted to a violation of Rule 142(1) of the CGST Act. Consequently, the impugned tax demand dated 18.09.2020 was deemed invalid and was struck down. The petition was allowed, granting the revenue the liberty to comply with Rule 142 of the CGST Act by properly communicating the show-cause notice to the petitioner and proceeding in accordance with the law.