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TMI Blog2022 (7) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1st November 2021 and the issuance of Garnishee notice dated 25.02.2022 are in violation of principles of natural justice and the procedure prescribed under the JGST Act, the summary of show cause notice contained in GST DRC-01 is quashed; the adjudication order dated 1st November 2021 is quashed; the summary of the order and demand notice contained in GST DRC-07 dated 01.11.2021 (Annexure-6) and also Garnishee notice dated 25.02.2022 are also quashed. The matter is remanded to the State Tax Officer, Dhanbad to initiate a fresh proceeding in accordance with law after issuance of proper show cause notice under Section 73(1) of JGST Act - writ petition disposed off. - W. P. ( T ) No. 985 of 2022 - - - Dated:- 7-7-2022 - Hon ble Mr. Justice Aparesh Kumar Singh And Hon ble Mr. Justice Deepak Roshan For the Petitioner : M/s. K. Kurmy , N. K. Pasari , Advocate For the Respondents : Mr. Rahul Saboo , S. C. - I ORDER Heard learned counsel for the parties. 2. Writ petition was preferred for the following reliefs: A. For issuance of an appropriate writ(s), order(s) or directions holding that the service of a Show Cause Notice under sub- Section (1) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atch were noticed in Form GST ASMT-10 vide reference no.5104 dated 11.02.2021 (Annexure-1). Petitioner furnished a reply in Form GST ASMT-11 on 16.03.2021 (Annexure-2) inter-alia taking a number of pleas through the annexed reply. However, an intimation of tax payable under Section 73(5)/74(5) of the JGST Act, 2017 was issued in Form GST DRC-01A (Annexure-3) dated 03.04.2021 by the State Tax Officer indicating the total amount of tax, interest under Section 50 of the JGST Act and penalty @ 10% amounting to Rs.3,84,11,318.04 asking the petitioner to pay the same by 19th April 2021 failing which show-cause would be issued under Section 73(1) of the Act issued. Petitioner duly replied to the communication in Part-B of the Form DRC-01A in terms of Rule 142(2A) of the JGST Rules 2017 on 13th April 2021 taking a plea that it was only pursuant to the amendment in Rule 61(5) that GSTR-3B became a return for the first time within the meaning of Section 39 of the JGST Act and the provisions of Section 16(4) w.e.f. 1st January 2021. Therefore, the allegations on interpretations of Section 16(4) of the JGST Act and the consequent denial of ITC of Rs. 2,66,26,906/- is based on a misconception o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of Section 79(1)(c) of the Act making it clear that failure to do so shall render the bank to be a defaulter in respect of the amount specified in the notice and face consequences as per the Act and Rules. 5. Learned counsel for the petitioner has relied upon the judgment of a Coordinate Bench of this Court of which one of us (Deepak Roshan, J) was a Member, Mahadeo Construction Company Vrs. Union of India Ors. W.P.(T) No.3517 of 2019 dated 21st April, 2020. He submits that this Court has held that in the event the assesse disputes the leviability of interest, no recovery proceeding under Section 79 of the Act can be initiated for recovery of the interest amount without any initiation of any adjudication proceedings. A perusal of the adjudication order dated 1st November 2021 would itself show that no show-cause notice under Section 73(1) of the Act was issued and petitioner denies issuance of any summary of show-cause notice either. Learned counsel for the petitioner submits that without rejecting the reply furnished by the petitioner in FORM GST ASMT-11, the summary of show-cause notice was issued in FORM GST DRC-01A straightaway. Learned counsel for the petitioner the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable interest in full by 19th April, 2021, failing which, the show-cause notice under Section 73(1) was to be issued. Petitioner replied to the above Form GST DRC-01A on 13th April, 2021. The representative came on 1st June 2021 and submitted his reply. Since, his reply and documents were not found satisfactory, GST DRC-01 GST DRC-02 was issued on 1st September, 2021. The summary of the show cause specifically intimated that GST DRC-01 was issued on 1st September, 2021 and sent to him on e-mail. Petitioner neither submitted any explanation nor recorded its appearance during the proceedings under Section 73 of the JGST Act. Therefore, the concerned State Tax Officer after considering the documents available on record passed the Adjudication Order no. 9395 dated 1st November, 2021 under Section 73(9) of JGST Act. Pursuant thereto, GST DRC-07 was issued on the same date and uploaded on petitioner s liability ledger portal. Since the petitioner did not deposit the tax, interest and penalty as determined vide order dated 1st November, 2021 and demanded under GST DRC-07 after the expiry of three months, the Department initiated recovery proceeding vide Form GST DRC-13 directing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as to which work contract, services were completed or partly completed by the petitioner regarding which he had not reflected his liability in the filed return as per GSTR-3B for the period in question. It needs no reiteration that a summary of show cause notice in Form DRC-01 could not substitute the requirement of a proper show cause notice. At the same time, if a show cause notice does not specify the grounds for proceeding against a person no amount of tax, interest or penalty can be imposed in excess of the amount specified in the notice or on grounds other than the grounds specified in the notice as per section 75(7) of the JGST Act. 15. Learned counsel for the petitioner has relying upon the case of Bharti Airtel Ltd. (supra) and contended that the Apex Court has observed that the common portal of GSTN is only a facilitator. The format GST DRC-01 or 01A are prescribed format on the online portal to follow up the proceedings being undertaken against an assessee. They themselves cannot substitute the ingredient of a proper show cause notice. If the show cause notice does not specify a ground, the Revenue cannot be allowed to raise a fresh plea at the time of adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned show cause notice as contained in Annexure-1 does not fulfill the ingredients of a proper show cause notice and amounts to violation of principles of natural justice. The challenge is entertainable in exercise of writ jurisdiction of this Court on the specified grounds as clearly held by the decision of the Apex Court in the case of Magadh Sugar Energy Ltd. Vrs. State of Bihar others reported in 2021 SCC Online SC 801, para 24 and 25. Accordingly, the impugned notice at annexure-1 and the summary of show cause notice at annexure-2 in Form GST DRC-01 is quashed. This Court, however is not inclined to be drawn into the issue whether the requirement of issuance of Form GST ASMT-10 is a condition precedent for invocation of Section 73 or 74 of the JGST Act for the purposes of deciding the instant case. Since the Court has not gone into the merits of the challenge, respondents are at liberty to initiate fresh proceedings from the same stage in accordance with law within a period of four weeks from today 10. It further appears that for the relevant tax period 2018-19 in view of the period of limitation prescribed in terms of Section 73(2) read with subsection 10, any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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