2024 (9) TMI 1215 - HC - GST

Non-consideration of the reply given pursuant to the notice given under GST DRC-01A - requirement to consider the reply before issuing SCN - Violation of principles of natural justice - HELD THAT - A plain reading of Rule 142 (1A) and 142 (2A) of the Rules of 2017 would go to show that it is discretionary for the proper Officer to either issue communication or not to do so. However, in the present case, a communication is issued and the person to whom communication is sent, has filed submissions against the proposed liability. In Form GST DRC-01A or in Part B of Form GST DRC-01A, there is no provision under the Rules for adjudication regarding submissions made by the person referred to in sub-rule (1A) of Rule 142 of Rules of 2017. Rule 142 (1A) of the Rules of 2017 is, basically, only a communication, which the proper officer , if he feels so, may give. The right of the assessee arises only after issuance of a show cause notice under Rule 142 (1) (a) of the Rules of 2017, in which case there is provision under the Rules for affording an opportunity of hearing. Affording opportunity of hearing at different stages was not contemplated by the legislature and thus, we beg to differ from the judgments cited at bar, by learned counsel for the petitioner. The RGST/CGST Act and Rules having financial implications have to be interpreted in the manner as promulgated. The Apex Court in the case of AJMERA HOUSING CORPORATION ANR. ETC. VERSUS COMMISSIONER OF INCOME TAX 2010 (8) TMI 35 - SUPREME COURT observed that it is trite law that a taxing statute is to be construed strictly. In a taxing Act one has to look merely at what is said in the relevant provision. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. There is no room for any intendment. In interpreting a taxing statute, the Court must look squarely at the words of the statute and interpret them. Considerations of hardship, injustice and equity are entirely out of place in interpreting a taxing statute. Since in the present case, only communication has been given, there is no reason to entertain the present writ petition and the same appears to have been filed just to stall the proceedings, which are pending before the authorities. There are no force in the writ petition, hence, the same is dismissed.

Summary

Issues:
1. Non-consideration of reply under GST DRC-01A notice.
2. Interpretation of Rule 142 (1A) and Rule 142 (2A) of the Rajasthan Goods & Service Tax (RGST)/Central Goods & Service Tax (CGST) Rules, 2017.
3. Affording an opportunity of hearing before issuing a show cause notice.
4. Comparison with judgments from the Calcutta High Court.
5. Discretion of the proper officer in issuing communication.
6. Lack of provision for adjudication regarding submissions made against proposed liability.
7. Interpretation of taxing statutes and strict construction.

Analysis:
The petitioner challenged the non-consideration of their reply to the GST DRC-01A notice. The petitioner argued that Rule 142 (1A) mandates authorities to consider replies before issuing show cause notices under Rule 142 (1) (a). Reference was made to Calcutta High Court judgments requiring an opportunity of hearing even before show cause notices. The petitioner sought direction for reply consideration before any further action (para 1-4).

The Additional Advocate General contended that Rule 142 (1A) only requires communication, not mandatory, and no provision for hearing at this stage. Referring to the Apex Court judgment, it was argued that the excise law is a complete code, and objections should be raised before authorities first. The advocate emphasized that no show cause notice had been issued in the present case (para 6-9).

The Court analyzed Rule 142 (1A) and 142 (2A) and found no provision for hearing or adjudication at the communication stage. They disagreed with the Calcutta High Court judgments, stating the right to a hearing arises only after a show cause notice. Citing the need for strict interpretation of taxing statutes, the Court dismissed the petition, noting it was filed to delay ongoing proceedings (para 11-13).

Ultimately, the Court found no merit in the writ petition and dismissed it, along with any pending applications. The judgment highlighted the importance of following statutory procedures and the strict interpretation of tax laws (para 14-15).