2022 (11) TMI 835 - HC - GST

Validity of summary notices in terms of GST DRC-01 read with Rule 142 of the JGST Rules,and summary orders in Form DRC-07 respective adjudication orders - direction upon the respondents to unblocked/re-credit the amount of Input Tax Credit illegally blocked / debited from the Electronic Credit Ledger of the petitioners - HELD THAT - It is clear that the petitioners have challenged the impugned notices/orders and action of the respondent authorities on the ground of non-compliance of statutory provision as mentioned in Jharkhand Goods and Services Tax Act, 2017 (in short JGST).Admittedly, no proper show-cause notices have been issued to the respective petitioners except a summary of SCN in GST DRC-01which are not in accordance with the provision of the JGST Act and to that extent these cases are covered by the judgment passed by this Court in the case of N M/S NKAS SERVICES PRIVATE LIMITED VERSUS THE STATE OF JHARKHAND, THE COMMISSIONER OF STATE TAXES, DHURWA, RANCHI, THE STATE TAX OFFICER HAVING ITS OFFICE AT GODDA, DIST. GODDA 2022 (2) TMI 1157 - JHARKHAND HIGH COURT . Admittedly, the petitioners in the respective applications have been denied of principle of natural justice. In view of the aforesaid discussion, the show cause notices in terms of GST DRC-01 read with Rule 142 of the JGST Rules, summary of orders in Form DRC-07 and respective adjudication orders and all consequential orders, are hereby, quashed and set aside. Application allowed.

Summary

Issues Involved:
Challenge to summary notices under GST DRC-01 and DRC-07, adjudication orders, and blocking of Input Tax Credit; Non-compliance with statutory provisions; Violation of natural justice principles; Revision of TRAN-1 form for transitional credit.

Detailed Analysis:

1. Challenge to Summary Notices and Adjudication Orders:
The petitioners challenged summary notices under GST DRC-01, DRC-07, and adjudication orders, alleging non-compliance with statutory provisions. They contended that proper show-cause notices were not issued, affecting the validity of the proceedings. The absence of personal hearings further violated principles of natural justice. The Court noted that the cases were covered by a previous judgment and held that the notices and orders were quashed and set aside.

2. Violation of Natural Justice:
The Court observed that the petitioners were denied the principle of natural justice as personal hearings were not granted. Referring to a specific case, it was highlighted that passing adjudication orders without providing opportunities for reply and defense vitiated the proceedings. The Court emphasized the importance of following due procedure under the JGST Act.

3. Revision of TRAN-1 Form for Transitional Credit:
The petitioners sought to revise their GST TRAN-1 forms to correct claimed input tax credit. The Court referenced a recent Supreme Court decision allowing a window period for revising forms for availing transitional credit. It directed the petitioners to revise their forms within the specified period, in line with the Supreme Court's order and Ministry of Finance guidelines.

4. Compliance with Supreme Court Order and Ministry of Finance Guidelines:
The Court highlighted the directions from the Supreme Court and Ministry of Finance regarding the verification of transitional credit. It instructed the respondents to proceed in accordance with the law, verifying revised TRAN-1 forms filed by the petitioners. Failure to revise forms within the window period would allow the respondents to initiate fresh proceedings after issuing proper show-cause notices.

5. Final Decision and Liberty Granted:
Ultimately, the Court allowed all writ applications, quashing the impugned notices and orders. It granted the petitioners the liberty to revise their forms for transitional credit within the extended window period. The respondents were directed to comply with the Supreme Court order and Ministry of Finance guidelines, ensuring proper scrutiny of revised forms and initiating fresh proceedings if necessary.

This comprehensive analysis covers the key issues addressed in the judgment, focusing on the challenges to notices and orders, violation of natural justice principles, revision of forms for transitional credit, and compliance with higher court directives and guidelines.