2022 (1) TMI 851 - HC - GST

Service of proper show cause notice - Rule 142 (1) (a) of the Jharkhand Goods and Services Tax Rules, 2017 - HELD THAT - Show Cause Notice has been issued in a format without striking out any irrelevant portions and without stating the specific contravention committed by the petitioner. The summary of show cause notice in FORM-GST-DRC- 01 is to be issued in an electronic form along with a notice for the purposes of intimation to the assesse and the same by its very nomenclature cannot be a substitute to the show cause notice which if lacks in the essential ingredients of a proper show cause notice. While the show cause notice does not even contain the brief facts of the case or the grounds alleged even the summary of the show cause notice does not contain specific facts and allegations showing evasion of payment of due tax to the Government. In the absence of the ingredients of a proper show cause notice the petitioner is being denied proper opportunity of defending himself. Such a proceeding could end up in vague result and would also not be in the interest of the revenue. On being specifically as asked as to how the summary of a show cause notice as it is in its present format Annexure-2 could in itself be a substitute for the show cause notice stipulated in Section 73 of the JGST Act, seeks time to obtain instruction. Matter be listed on 17.01.2022.

Summary

Issues:
Challenge to the impugned show cause notice lacking essential ingredients of a proper show cause notice under Section 73 of the Jharkhand Goods & Services Tax Act, 2017.

Analysis:
The petitioner's counsel argued that the impugned show cause notice lacked the necessary elements of a proper notice as mandated by Section 73 of the Act. The notice was issued without striking out irrelevant portions and failed to specify the contravention committed by the petitioner. Additionally, the summary of the show cause notice in FORM-GST-DRC-01, issued electronically, was deemed insufficient as it did not provide specific facts and allegations regarding tax evasion, thus denying the petitioner a fair opportunity to defend. Citing a previous judgment involving the same petitioner, it was contended that the respondent repeated the error in issuing the current notice. The absence of essential elements in the notice could lead to vague outcomes and not serve the interest of revenue, rendering the impugned notices unsustainable in law.

Analysis:
The petitioner's counsel highlighted that the State Tax Authorities mistakenly believed that a summary of the show cause notice, uploaded on the GSTN Portal, was adequate, neglecting the requirement for detailed facts and charges in the notice. Reference was made to Section 75(7) to emphasize that any demand for tax, interest, or penalty should not exceed the amounts specified in the notice, and no demand should be confirmed based on unspecified grounds. The notice in question lacked specific grounds, contravening the statutory provisions.

Analysis:
In defense of the impugned notices, the State's counsel relied on the contents of the counter-affidavit. However, when questioned about how the summary of a show cause notice could substitute the detailed notice mandated by Section 73 of the JGST Act, the counsel sought time to seek instructions. The matter was adjourned for further proceedings on 17.01.2022.