2024 (10) TMI 671 - HC - GST

Challenge to impugned summary order - order passed without there being any notice issued in Form DRC-01 as provided under the GST Rules - principles of natural justice - HELD THAT - Admittedly in facts of the case respondent authorities did not serve any show cause notice upon the petitioner and straightaway issued the impugned order in Form GST DRC-07 which does not contain any reasons. Thus, without going into the merits of the matter, the impugned summary order in Form GST DRC-07 dated 11.1.2019 issued by the respondent is hereby quashed and set aside and the matter is remanded back to the respondents for de novo adjudication after giving an opportunity of hearing to the petitioner as fresh order is required to be passed in accordance with law. Such exercise shall be completed within 12 weeks from the date of receipt of a copy of this order. Petition disposed off by way of remand.

Summary

Issues:
Petition under Article 227 for quashing GST recovery notice and summary order, lack of notice in Form DRC-01, discrepancy in ITC between GSTR-3B and GSTR-2A, absence of reasons in the impugned order.

Analysis:
The petitioner, a private limited company engaged in manufacturing, sought relief through a writ petition under Article 227 to quash a recovery notice and a summary order issued under GST laws. The petitioner alleged discrepancies in Input Tax Credit (ITC) between GSTR-3B and GSTR-2A, leading to a demand for recovery amounting to INR 3,76,17,905. The petitioner contended that the recovery notice lacked a detailed speaking order and only a summary order was available, which did not provide reasons for the decision. The petitioner highlighted that no show cause notice was served before the issuance of the impugned order, raising procedural irregularities.

The High Court observed that the impugned summary order, issued without a formal notice in Form DRC-01 as required by GST Rules, was procedurally flawed. The court noted that the respondent authorities did not provide any opportunity of hearing or reasons for their decision before issuing the impugned order. Consequently, the court held that the summary order dated 11.01.2019 needed to be quashed and set aside. The matter was remanded back to the respondents for fresh adjudication after following the prescribed procedure, including providing the petitioner with a proper opportunity of being heard.

The court clarified that its decision to set aside the impugned order was based on procedural grounds and did not delve into the merits of the case. The court emphasized that any future adjudication process, following the issuance of a show cause notice, would be conducted on the merits of the case. The court directed the respondents to complete the fresh adjudication within 12 weeks from the date of receipt of the court's order. Ultimately, the petition was disposed of, with the rule made absolute to the extent of quashing the summary order, and no costs were awarded in the matter.