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2021 (9) TMI 904 - HC - GSTValidity of Recovery order - demand notice was never supplied within time and it was communicated much after initial recovery order with back date - non-compliance of section 73(1) of the Act and Rules 118 142 of the GST Rules, 2017 - HELD THAT - The recovery notice DRC 07 Annexure P-12 dated 13.08.2021 refers to order dated 30.07.2021 and Prima facie the summary of show cause notice is not reflected and the demand which is made under section 73 of the Recovery Notices has not been shown. Subsequently the order dated 30.07.2021 is placed on record. A perusal of the envelop whereby the order dated 30.07.2021 was communicated would show that it was dispatched by the department on 23.08.2021 i.e., much after initial recovery order was issued on 13.8.2021, therefore, whether the order of recovery dated 13.08.2021 was followed after due procedure of law is required to be examined. Let the reply be filed by the State - In the meanwhile, it is directed that on petitioner's depositing 10% of recovery which is sought by order dated 13.08.2021 (Annexure P-12), rest of the recovery amount shall remain stayed till the next date of hearing.
Issues:
1. Compliance with procedural requirements under the Chhattisgarh Goods and Service Tax Act, 2017 regarding recovery notices. 2. Timeliness of communication and compliance with section 73(1) of the Act and Rules 118 & 142 of the GST Rules, 2017. 3. Validity of the recovery order dated 13.08.2021 in light of the procedural aspects. Analysis: 1. The petitioner's counsel argued that before demanding any amount, there should be scrutiny and seeking of explanation under section 61 of the Chhattisgarh Goods and Service Tax Act, 2017. The counsel referred to Section 73(1) of the Act, emphasizing the necessity of serving a show cause notice under this provision. Additionally, the counsel highlighted Rule 142(1A) of the Chhattisgarh Goods and Service Tax Rules 2017, which requires communicating the tax, interest, and penalty details before issuing a notice under section 73(1). The petitioner contended that the notice of demand in this case did not comply with the procedural requirements as it was communicated after the initial recovery order, raising concerns about non-compliance with section 73(1) of the Act and Rules 118 & 142 of the GST Rules, 2017. 2. The State Counsel requested time to seek instructions and respond. It was argued that the order dated 30.07.2021, which formed the basis of the recovery notice, was not being challenged. However, the petitioner's counsel raised concerns about the timing of communication of the said order, indicating a potential lapse in procedural adherence. The court noted discrepancies in the communication timeline, with the order dated 30.07.2021 being dispatched after the initial recovery order dated 13.08.2021. This raised doubts about the procedural compliance leading to the issuance of the recovery notice. 3. Upon perusing the documents and considering the arguments presented, the court directed the State to file a reply. In the interim, the court ordered that 10% of the recovery amount mentioned in the order dated 13.08.2021 should be deposited by the petitioner, and the remaining recovery amount would be stayed until the next hearing. This decision aimed to balance the interests of both parties while ensuring compliance with procedural requirements and fairness in the recovery process. This detailed analysis of the judgment highlights the key issues raised by the parties, the court's observations regarding procedural compliance, and the interim directions issued to address the concerns raised during the proceedings.
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