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TMI Blog2022 (4) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of an identical situation where only a Summary of Show Cause Notice was issued and Adjudication Order was passed pursuant thereto, this Court has observed that the impugned show cause notice as contained in Annexure-1 does not fulfill the ingredients of a proper show-cause notice and thus amounts to violation of principles of natural justice, the challenge is entertainable in exercise of writ jurisdiction of this Court. The present case is squarely covered by the aforesaid decision of this Court and the law laid down in the case of NKAS Services Pvt. Ltd. is fully agreed upon and, accordingly, it is held that the Adjudication Order is non est in the eye of law, as the same has been passed without issuance of proper show cause notice and, thus, amounts to violation of principles of natural justice. From the facts of the present proceedings, it would transpire that on 14th March, 2020, Form GST DRC 01 was issued without specifying any date of hearing and, thereafter, straightaway, an Adjudication Order was allegedly passed on 13th August, 2020 fastening liability of tax, interest and penalty upon the Petitioner. From the order sheet, it is evident that no oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2. Since both these writ applications are interconnected and common issue is involved, as such both are being heard together and disposed of by this common judgment. 3. Writ Petition No. 3908 of 2020 pertains to the Financial Year 2017-18 wherein the petitioner prayed for quashing and setting aside summary of the order as contained in Form-GST DRC 07 dated 11.09.2020 issued by respondent no.4 whereby the petitioner was directed to make payment of tax, interest and penalty. Similarly Writ Petition No. 3909 of 2020 pertains to Financial Year 2018-19 wherein petitioner has made similar relief for quashing summary of the order as contained in Form-GST DRC 07 dated 11.09.2020. 4. The brief facts of the case are that the petitioner is a Public Limited Company and is primarily engaged in the business of trading of coal. Petitioner for the purpose of trading of coal, purchases coal primarily from various subsidiaries of Coal India Limited including various Government entities like Jharkhand State Mineral Development Corporation, Heavy Engineering Corporation Limited as well as other similarly situated coal traders. It further transpires that the petitioner is having its bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of purchase and sale of coal made by the petitioner. However, the Respondent-authorities were not convinced with the documents furnished by the petitioner and, accordingly, in terms of the provisions of Section 73(5)/74(5) of the GST Act read with Rule 142(1A) issued an intimation to the petitioner in Form GST DRC-01A dated 29.01.2020 directing the petitioner to make payment of the amount of tax as stated in the notice along with applicable interest and penalty. In the said intimation itself, it was stated that if the petitioner fails to pay the amount demanded, show cause notice will be issued to the petitioner under Section 74(1) of the GST Act. 8. Subsequently, respondent No. 4 issued a summary of show cause notice to the petitioner in Form GST DRC-01 in terms of Rule 142(1) of the GST Rules on 14th March, 2020. The specific case of the petitioner is that no show cause notice was ever issued to the petitioner and even in the summary of the show cause notice, no time line was provided as to when the petitioner was to submit its reply. Subsequently, the petitioner was issued summary of order in Form GST DRC-07 wherein the date of the adjudication order was mentioned as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the date of adjudication order mentioned in Form GST DRC-07 and the actual adjudication order brought on record by Respondents-State Tax Authorities in their counter affidavit, this Court vide its order dated 28.01.2021 directed the respondents to file supplementary counter-affidavit annexing the entire records of the file. The entire order-sheet of the proceedings was subsequently filed by Respondent-State through supplementary counter- affidavit. The said order-sheets filed by respondents revealed that the adjudication order which was passed on 13th August, 2020 does not find any mention in the order-sheet. 13. On 14.03.2022, this Court specifically asked the counsel for the State as to whether there is any mention in the order-sheet drawn by the adjudicating officer regarding reference of the adjudication order dated 13th August, 2020, but it was fairly submitted that there is no reference in the order-sheet drawn of the adjudication order dated 13th August, 2020. It was further admitted that no show cause notice was issued and only summary of show cause was issued. 14. Mr. Sumeet Kumar Gadodia, learned counsel for the petitioner assisted by Mr. Ranjeet Kushwaha, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is an antedated order. On pointed question being put by the Court as to why in the summary of the order in Form GST DRC-07 the date of adjudication order was mentioned as 11.09.2020 instead of 13.08.2020, no satisfactory reply was given and it was merely stated that it was by mistake. Further, as already mentioned above, the Respondent-State counsel fairly stated that no show cause notice in terms of Section 74(1) of the Act read with Rule 142(1) of the Rules were issued and, merely, a summary of the show cause notice was issued. Even on the issue of grant of personal hearing, it was fairly admitted that no separate notice was issued fixing the date of personal hearing. However, again by placing reliance upon the investigation proceedings as initiated under Section 67 read with Section 71(2) of the Act, it was stated that the same would amount to sufficient compliance of the provisions of natural justice. 16. Having heard the learned counsels for the parties and after going through the documents annexed with the respective affidavits and the averments made therein including narration of facts stated hereinabove, it appears that petitioner, who is engaged in the business of tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause as to why he should not pay the amount specified in the notice along with the interest payable thereupon under Section 50 and a penalty equivalent to the tax specified in the notice. In contradistinction to the provision under Section 73 of the Act under the same Chapter-XIV relating to Demands and Recovery , the ingredients of Section 74 of the Act require either of the following ingredients to be satisfied for proceeding thereunder i.e. that the tax in question has not been paid or short paid or erroneously refunded or the ITC has been wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts to evade tax. 14. A bare perusal of the impugned show-case notice creates a clear impression that it is a notice issued in a format without even striking out any irrelevant portions and without stating the contraventions committed by the petitioner i.e. whether its actuated by reason of fraud or any willful misstatement or suppression of facts in order to evade tax. Needless to say that the proceedings under Section 74 have a serious connotation as they allege punitive consequences on account of fraud or any willful misstatement or suppre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the entire proceeding initiated by the show-cause notice gets vitiated by unfairness and bias and the subsequent proceedings become an idle ceremony. 15. The Apex Court has held that the concept of reasonable opportunity includes various safeguards and one of them is to afford opportunity to the person to deny his guilt and establish his innocence, which he can only do if he is told what the charges leveled against him are and the allegations on which such charges are based. 16. It is also true that acts of fraud or suppression are to be specifically pleaded so that it is clear and explicit to the noticee to reply thereto effectively [ See Larsen Toubro Ltd. Vs. CCE, (2007) 9 SCC 617 (para 14)]. Further in the case of CCE Vs. Brindavan Beverages (P) Ltd. reported in (2007) 5 SCC 388 relied upon by the petitioner, the Apex Court at para-14 of the judgment has held that if the allegations in the show-cause notice are not specific and are on the contrary, vague, lack details and/or unintelligible i.e. its sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show-cause notice. We do not agree with the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus, amounts to violation of principles of natural justice. 19. We would have refrained ourselves from further adjudicating other issues raised by learned counsel for the petitioner and would have straightaway quashed the impugned Adjudication Order, but we are of the opinion that further issues raised by the petitioner is also required to be dealt with in our Judgment, especially in view of the fact that this Court is flooded with several similar writ petitions wherein the procedure prescribed under the GST Act is not being followed by the GST authorities, more particularly, the State Tax authorities, leaving no option for this Court but to entertain the writ application straightaway against the Adjudication Order without relegating the Writ Petitioners to avail alternative remedy of appeal as provided under the GST Act. The manner in which the impugned Adjudication Orders in this case have been passed clearly point out serious lacuna in the proceedings conducted under the GST Act, which clearly has entailed adverse consequences upon the Petitioner. Accordingly, we deem it proper to further adjudicate the other issues raised by the Petitioner, which are dealt with herein-under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARA-48) (i) Order dated 14.07.2020 passed in the case of Cera Sanitaryware Limited Vs. State of Gujarat reported in 2020-VIL-310-GUJ (PARA-6) 21. At this stage, we deem it appropriate to quote the provisions of Section 75(4) and 75(5) of the CGST/JGST Act:- 75. General provisions relating to determination of tax (4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. (5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing: PROVIDED that no such adjournment shall be granted for more than three times to a person during the proceedings. 22. A conjoint reading of the provisions of Sections 75(4) and 75(5) would reveal as under:- (i) Opportunity of hearing shall be granted on request. (ii) Opportunity of hearing shall be granted where any adverse decision is contemplated. (iv) If sufficient cause is shown, the proper officer can adjourn the hearing for reasons to be rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.09.2020, but has still tried to justify the date of Adjudication Order as 13.08.2020 by stating, inter alia, on instruction, that the Adjudication Order was actually passed on 13.08.2020, but, inadvertently, the same could not be recorded in the Order-sheet on 14.08.2020. However, no explanation could be furnished by the Respondents as to why in the Summary of Order the date of Adjudication Order was mentioned as 11.09.2020 instead of 13.08.2020 and it was merely stated that the same happened by mistake. 26. We have given our conscious consideration to the arguments advanced by the counsels for the parties and we are of the opinion that there is serious lacuna in the proceeding conducted under the JGST Act which has ultimately entailed adverse consequences upon the petitioner. Vide our order dated 10th March, 2022, we have directed respondent Nos. 3 and 4 to appear before us with complete records and has further communicated our order to the Commissioner, State Tax Department also so that the matter can be looked at from the level of the Commissionorate as it reflects on the Tax Administration within the State. Relevant portion of the order dated 10th March, 2022 is quoted her ..... X X X X Extracts X X X X X X X X Extracts X X X X
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