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TMI Blog2022 (7) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... , were passed. Subsequently, the petitioner also filed rectification application for both the period and fresh rectified orders were passed in respect of both these tax periods. The law is no more res-integra, inasmuch as, Rule 142(1)(a) of the JGST Rules provides that the summary of show cause notice in Form DRC-01 should be issued along with the show cause notice under Section 74(1). The word along with clearly indicates that in a given case show cause notice as well as summary thereof both have to be issued. As per Rule 142(1)(a) of the JGST Rules, the summary of show cause notice has to be issued electronically to keep track of the proceeding initiated against the registered persona whereas a show cause notice need not necessarily be issued electronically. This Court in the case of M/S. NKAS SERVICES PRIVATE LIMITED. VERSUS THE STATE OF JHARKHAND, THE COMMISSIONER OF STATE TAXES, RANCHI, DEPUTY COMMISSIONER OF STATE TAXES, GODDA [ 2021 (10) TMI 880 - JHARKHAND HIGH COURT] was the member, has taken note of the said position of law and has categorically held that Summary of Show Cause Notice in Form DRC-01 is not a substitute of show cause notice under Section 74(1). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nput tax credit without making payment of value and tax of the inputs to the supplier within six months which is in contravention of 2nd/3rd proviso to Section 16(2) of the JGST Act. It is also held that credit of Rs.27 lakh (out of total Rs.19.43 Cr. constituting 1%) is not transported in heavy vehicle as per the vehicle numbers. Whereas, the ground for search in W.P. (T) No.1984/2021 is concerned; the petitioner made purchases only from one supplier, and there exist no proof of payment and secondly, on physical verification, difference in stock was found from the stock maintained in books of accounts. 4. Mr. Kartik Kurmi, assisted by Mr. N. K. Pasari and Ms. Sidhi Jalan learned counsel for the petitioner submits that the proceeding in both the cases started with issuance of summary show-cause notices, both dated 14.9.2018 in Form DRC-01 under Section 74(1) of JGST Act, 2017. The petitioner under bona-fide and mistaken belief of law, submitted its concise reply vid letter dated 11-10-2018 in Form DRC-06 explaining that the ITC have been legally claimed by them and the goods have been physically received by them. The Respondent No.4 thereupon passed two separate orders, both dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in Form GST DRC-01 along with the gist of accusation was issued to the petitioner vide notice reference No.934, dated 14.09.2018. In this regard a detailed e-mail was also sent to the e-mail i.d. of the petitioner. Thereafter, petitioner furnished reply in Form GST DRC-06 to the Office of the respondent No.4 on 12.10.2018, which establishes the very fact that proper adjudication process was followed before passing of the impugned order in the both the writ applications. Learned counsel further submits that during course of hearing before passing of the impugned order the entire record including the RUD (relied upon documents) was supplied to the petitioner. This also shows that the requirement of principles of natural justice has been followed by the respondent before passing the impugned order. He further submits that after considering the reply/representation of the petitioner, the detailed order under Section 74(9) of the JGST Act was passed Form GST DRC-07 i.e. Demand Order was issued against the petitioner. The petitioner had also filed an application for rectification of error against the impugned order in both the cases as well as Form GST DRC-07. The respondent after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t paid or erroneously refunded or where input tax credit has been wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax, which has not been paid or has been short paid or to whom refund has been erroneously made or who has wrongly availed or utilised input tax credit requiring him to show 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge-sheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin a period of four weeks from today. 9. In view of the aforesaid facts and the settled preposition of law, the foundation of the proceeding in both the cases suffers from material irregularity and hence not sustainable being contrary to Section 74(1) of the JGST Act; thus, the subsequent proceedings/impugned Orders cannot sanctify the same. Though, the petitioner submitted their concise reply vide letter dated 11-10-2018; the respondent State cannot take benefit of the said action as summary of show cause notice cannot be considered as a show cause notice as mandated under Section 74(1) of the Act. The Respondent in their counter affidavit dated 07-09-2021 have stated that filing of concise reply by the petitioner proves that show-cause notice have been served upon them. As stated herein above, it is well settled that there is no estoppels against statute. A bonafide mistake or consent by the assesse cannot confer any jurisdiction upon the proper officer. The jurisdiction must flow from the statute itself. The rules of estoppels is rule of equity which has no role in matters of taxation. 10. In the case of UOI Vs.Madhumilan Syntex Pvt.Ltd reported in 1988(3) SCC 348 it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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