9911796707
TMI Blog2024 (10) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Act? - HELD THAT:- This Court is of the view that the Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. The Summary of the Show Cause Notice is in addition to the issuance of a proper Show Cause Notice. Under such circumstances, this Court is of the unhesitant opinion that the impugned orders challenged in the instant batch of writ petitions are contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice. Whether the determination of tax as well as the Order attached to the Summary of the Show Cause Notice in GST DCR-01 and Summary of the Order in GST DCR-07 can be said to be the Show Cause Notice and Order respectively? - HELD THAT:- A perusal of the provisions of Section 73 would show that the Show Cause Notice is required to be issued by the Proper Officer, the Statement under Section 73 (3) is to be issued by the Proper Officer as well as the Order under Section 73 (9) is required to be passed by the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pass an adverse order without providing an opportunity for hearing. The answer has to be in the negative else it would render the second part of Section 75 (4) redundant. The impugned order is set aside - petition disposed off. - HONOURABLE MR. JUSTICE DEVASHIS BARUAH For the Petitioners : Ms. Nitu Hawelia, Advocate Ms. M. L. Gope, Advocate Mr. A. Goyal, Advocate. For the Respondents : Mr. B. Gogoi, Stnading Counsel Finance and Taxation Dr. B. N. Gogoi, Advocate Ms. K. Phukan, Advocate. JUDGMENT AND ORDER (ORAL) Heard Ms. Nitu Hawelia, the learned counsel appearing on behalf of the petitioners in WP(C) No. 4379/2024 as well as Mr. A. Goyal, the learned counsel appearing on behalf of the petitioners in WP(C) No. 3912/2024; WP(C) No. 3910/2024; WP(C) No. 3933/2024; WP(C) No. 4618/2024 and WP(C) No. 4619/2024. I have also heard Mr. B. Gogoi, the learned Standing Counsel of the Finance and Taxation Department of the Government of Assam. 2. Before dealing with the issue involved, this Court finds it relevant to briefly note the facts involved in the instant batch of writ petitions which are taken up for adjudication. PROPOSITION OF FACTS AS PER PLEADINGS AND INSTRUCTIONS WP(C) No. 391 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 023 in the GST DRC-01. In the said Summary of the Show Cause Notice, it was mentioned that the Show Cause Notice was attached. Along with the said Summary of the Show Cause Notice, there was an attachment to the determination of tax dated 29.09.2023. The petitioner did not reply to the Show Cause Notice in view of the fact that there was no Show Cause Notice attached to the Summary of the Show Cause Notice. Pursuant thereto, a Summary of the Order dated 31.12.2023 was issued in GST GST DRC-07. To the said Summary of the Order uploaded in GST DRC-07, there was an attachment stating the manner in which the determination was made. The reason assigned for passing of the said order was that the taxpayer had not replied or contested the notice, and as such, had been agreed with the terms of the notice. It is relevant to mention that the attachments to both the GST DRC-01 as well as the GST DRC-07 did not contain any signature of the Proper Officer. WP(C) No. 4619/2024 6. In the this case, the petitioner herein was issued a Summary of the Show Cause Notice dated 28.09.2023 in the GST DRC-01. In the said Summary of the Show Cause Notice, it was mentioned that the Show Cause Notice was atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no show cause notice, and as such, the petitioners did not submit any reply. However, subsequently, on 27.12.2023, a Summary of the Order in GST DRC-07 was issued. The computation on the basis of which the GST DRC-07 was issued was attached to the GST DRC-07. The reason for passing the said order was that as no payment had been made within 30 days of the issuance of notice, and as such, on the basis of the documents available with the Department and the information furnished by the petitioners. 9. It is relevant to take note of that this Court had issued notice pursuant to the filing of the writ petitions and enquired with the learned counsel appearing on behalf of the respondent authorities as to whether there were Show Cause Notices issued apart from the Summary of the Show Cause Notice in GST DRC-01, and further, as to whether there were Show Cause Notices attached as mentioned in the Summary of the Show Cause Notice in GST DRC-01. In reply to the above queries so made by this Court, affidavits have been filed as well as instructions placed that the Proper Officer had only issued the Summary of the Show Cause Notice in GST DRC-01 along with the determination of tax. There w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 26 (3) of the Rules of 2017 as well as the Telangana Goods and Services Tax Act, 2017 and the Rules framed therein under. It was also observed therein that the Show Cause Notice as also the impugned order would not be sustainable and deserved to be set aside and quashed. The learned counsel further submitted that in the case of A.V. Bhanoji Row vs. Assistant Commissioner (ST) Others , reported in (2024) 123 GSTR 432 , the learned Division Bench of the Andhra Pradesh High Court had observed that as there was no signature of the Proper Officer, the same was treated to be void and inoperative. (B) The learned counsel further submitted that in the case of Nkas Services Private Limited vs. State of Jharkhand Others , reported in (2022) 99 GSTR 145, the learned Division Bench of the Jharkhand High Court had dealt with the question as regards issuance of a Summary of Show Cause Notice in GST Form DRC-01 and held that the Summary of the Show Cause Notice as issued in Form GST DRC-01 cannot be a substitute to the requirement of a proper Show Cause Notice. The learned counsel had also referred to another judgment of the Karnataka High Court in the case of LC Infra Projects Pvt. Limited vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he instant cases as the impugned orders have been passed without giving a proper opportunity of hearing as mandated under Section 75 (4) of both the Central Act as well as the State Act, the impugned orders are liable to be interfered with. 13. Per contra, Mr. B. Gogoi, the learned standing counsel appearing on behalf of the Finance and Taxation Department of the Government of Assam submitted that the respondent authorities have issued the Summary of the Show Cause Notice in Form DRC-01 which was accompanied by the determination of tax which as per the respondents would have provided all the details so that the petitioners could have submitted the reply. The learned counsel, however, fairly submitted that there is no separate Show Cause Notice apart from the determination of tax enclosed to the Summary of the Show Cause Notice. On the question of lack of signatures in the attachments to the GST DRC-01 as well as the GST DRC-07, the learned counsel fairly submitted that the materials on record do not show that there is/are any signature(s) in the attachment to the Summary to the Show Cause Notice as well as Summary to the Order issued in Forms GST DRC-01 and GST DRC-07 respectively. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese cases, the Summary of the Show Cause Notices have been issued in terms with Section 73. 16. At this stage, this Court would briefly take note of Section 73. A perusal of Section 73 would show that the said provision is set into motion when it appears to the Proper Officer that:- (a) Any tax has not been paid; or (b) Any tax short paid; or (c) Any tax erroneously refunded; or (d) Where input tax credit had been wrongly availed or utilized. for any reason other than the reason of fraud or any willful misstatement or suppression of facts to evade tax. Taking into account that it is only in the circumstances referred to above, the Proper Officer is required to issue a Show Cause Notice, therefore, the Show Cause Notice is required to specifically mention the reason(s) and the circumstances why the provision of Section 73 had been set into motion. The person against whom the said Show Cause Notice is issued would only have an adequate opportunity to submit a representation justifying that the prerequisites for issuance of Show Cause Notice is not there if and only if the reason(s) for issuance of the Show Cause is specifically mentioned in the Show Cause Notice. Section 73 further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Proper Officer are mandatory requirement in addition to the Summary of Show Cause Notice in GST DRC-01 and Summary of the Statement in GST DRC-02. 18. The judgment of the learned Division Bench of the Jharkhand High Court in the case of Nkas Services Private Limited (supra) had also dealt with a similar issue and categorically held that a Summary of a Show Cause Notice issued under GST DRC-01 cannot substitute the requirement of a proper Show Cause Notice. Similarly, in the case of LC Infra Projects Pvt. Limited (supra), the learned Single Judge of the Karnataka High Court had also observed that the issuance of a Show Cause Notice is sine qua non to proceed with the recovery of interest payable thereon under Section 50 of the Act and penalty leviable under the provisions of the Act or the Rules. 19. From the above analysis, this Court is of the view that the Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. The Summary of the Show Cause Notice is in addition to the issuance of a proper Show Cause Notice. Under such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of Chapter III shall be issued electronically by the Proper Officer or any other officer authorized to issue such notices or certificates or orders through digital signature certificate or through e-signature as specified under the provisions of the Information Technology Act, 2000 or verified by any other mode of signature or verification as notified by the Board in that behalf. It is relevant to take note of that Chapter III of the Rules of 2017 pertains to Registration whereas in respect to Demand and Recovery, it is Chapter XVIII. 22. Now therefore a question arises as to whether Rule 26 (3) can be applicable to Chapter-XVIII when the said Sub-Rule on refers to Chapter-III. In the case of M/s Silver Oak Villas LLP (supra), the learned Division Bench of the Telangana High Court had applied Rule 26 (3) of the Rules of 2017 even to Chapter-XVIII of the Rules of 2017. In the case of A.V. Bhanoji Row (supra), the learned Division Bench of the Andhra Pradesh High Court held that the signatures cannot be dispensed with and Sections 160 and 169 cannot save an order, notice, communication which did not contain a signature. In another judgment of the learned Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3912/2024 and WP(C) No. 3933/2024, the petitioners had sought for an opportunity of hearing which was however not given. In this regard, if this Court takes note of Section 75 (4) of both the Central Act as well as State Act, it would be seen that it is the mandate of the said provision that an opportunity of hearing should be granted when a request is received in writing from the person chargeable with tax or penalty or when any adverse decision is contemplated against such person. The mandate of Section 75 (4) of both the Central and State Act are safeguards provided to the assessees so that they can have a say in the hearing process. 26. It is also seen that in the reply to be submitted in Form GST DRC-06, there is an option given for personal hearing at Sl. No.7. As stated above, the petitioners in WP(C) No. 3912/2024 and WP(C) No. 3933/2024 have specifically filled up the Column as Yes wherein the option for personal hearing was mentioned. Inspite of that, there was no opportunity of hearing afforded to those petitioners. 27. The learned Division Bench of the Chhattisgarh High Court in the case of Mahindra Mahindra Limited (supra) had categorically observed that when the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners in the instant batch of writ petitions without the Show Cause Notice is bad in law and interfered with. (C) It is also noticed that the Show Cause Notice and the Statement in terms with Section 73 (1) and 73 (3) of both the Central Act or the State Act respectively are required to be issued only by the Proper Officer as defined in Section 2 (91). Additionally, the order under Section 73 (9) is also required to be passed by the Proper officer. The Summary of the Show Cause Notice, the Summary of the Statement under Section 73 (3) and the Summary of the Order passed in terms with Section 73 (9) are to be issued in GST DRC-01, GST DCR-02 and GST DRC-07 respectively. The issuance of the Summary of the Show Cause Notice, Summary of the Statement and Summary of the Order do not dispense with the requirement of issuance of a proper Show Cause Notice and Statement as well as passing of the Order as per the mandate of Section 73 by the Proper Officer. As initiation of a proceedings under Section 73 and passing of an order under the same provision have consequences. The Show Cause Notice, Statement as well as the Order are all required to be authenticated in the manner stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
