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2023 (5) TMI 848 - HC - GSTValidity of SCN - SCN challenged on the ground that it does not satisfy the requirements of provision r/w Rule 142 of GST Rules - SCN not communicating the relevant information and material thereby disabling the petitioner to respond to the same - violation of principles of natural justice - HELD THAT - Bare reading of the show cause notice (Annexure P-1) reveals that it neither contained the material and information nor the statement containing details of ITC transaction under question. Section 75 of GST Act is a complete Code in itself which prescribes for various stages for determination of wrongful utilization of ITC while following the concept of reasonable opportunity of being heard to the assessee. Since the Statute itself prescribes for affording reasonable opportunity, it is incumbent upon the Revenue to afford the same and any deficiency in that regard vitiates the end result. The Jharkhand High Court has dealt with the provisions of Section 74 and 75 of GST Act as well as Rule 142 of GST Rules in the case of M/s Sidhi Vinayak Enterprises Vs. The State of Jharkhand ors 2023 (2) TMI 226 - JHARKHAND HIGH COURT holding that he impugned show cause notice in both the cases does not fulfill the ingredients of a proper show-cause notice and thus amounts to violation of principles of natural justice, the challenge is maintainable in exercise of writ jurisdiction of this Court. Following decision of the Jharkhand High Court, this Court has no manner of doubt that the very initiation of the proceedings by way of show cause notice (Annexure P-1) is vitiated for the same being vague - Petition allowed.
Issues involved:
The challenge to show cause notice under Section 74(1) of GST Act for not meeting requirements of provision r/w Rule 142 of GST Rules. Summary: The High Court of Madhya Pradesh heard a writ petition challenging Annexure P-2 dated 03.05.2019 and Annexure P-4 dated 30.08.2019 issued by the Appellate Authority & Joint Commissioner, State Tax, Sagar Division. The primary contention was that the show cause notice (Annexure P-1) was vague, lacking relevant information, and material necessary for a proper response. The petitioner argued that this vagueness invalidated subsequent actions like the passing of orders and appeal dismissal. The petitioner relied on a decision by the Division Bench of the Jharkhand High Court, highlighting similarities in the cases and emphasizing the importance of a proper show cause notice as mandated by Section 74(1) of the GST Act. The Jharkhand High Court's judgment emphasized the need for a show cause notice to fulfill the requirements of a proper notice to uphold principles of natural justice. The State, however, argued that the petitioner's response to the show cause notice indicated no hindrance in providing a reply despite the alleged vagueness. While the specific ground of the notice being vague was not raised before the appellate authority, the mandatory provisions of Section 74 of the GST Act require a clear notice enabling the assessee to respond adequately. The Court concluded that the show cause notice (Annexure P-1) lacked essential information and material, violating the provisions of Section 74 of the GST Act. The impugned orders and the show cause notice were quashed, with the competent authority granted liberty to proceed in accordance with the law. The writ petition was allowed, emphasizing the importance of a proper and clear show cause notice in legal proceedings. This summary provides a detailed breakdown of the issues involved in the legal judgment, focusing on the challenge to the show cause notice and the subsequent actions taken. It highlights the arguments presented by both parties and the court's decision to quash the orders due to the vagueness of the notice, stressing the significance of adherence to legal provisions in such matters.
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