Jharkhand High Court (HC) chaired by Acting Chief Justice Aparesh Kumar Singh and Deepak Roshan quashed and set aside the Show cause notice, summary of show cause notice in FORM GST DRC01 and also the summary of order in FORM GST DRC-07.
The petitioner firm, M/s Chitra Automobile, engaged in trading of Two Wheeler Bikes and its parts which are sold to the various customers.
Additionally, in line with Section 16 of the Jharkhand Goods and Services Tax Act, 2017 (JGST)/Central Goods and Services Tax Act, 2017 (CGST), the petitioner for the supply of taxable services gets input services, inputs, and capital goods for use in the course or progress of its business.
The petitioner had consistently submitted monthly returns of outward supplies in Form GSTR-1 in accordance with Section 37 of the JGST Act read with Rule 59 of the JGST Rules and monthly returns of self assessment in Form GSTR-3B in accordance with Section 39 read with Rule 61(5) of the Act during the period in dispute.
The petitioner has allegedly breached JGST Act, 2017 requirements relating to the Tax Period, according to a sudden Show Cause Notice under Section 73 of the JGST Act, 2017 that was issued along with FORM GST DRC-01 of even date.
The total demand was to the tune of Rs. 30,22,586.00 including CGST, SGST and interest. Since the petitioner has not presented any reply of the show cause notice, summary of order in FORM GST DRC-07 as per Rule 142(5) of the JGST Act, 2017 was issued.
The petitioner contended that the show cause notice issued is in violation of rule of law and principles of natural justice. He contended that the initiation of proceeding under Section 73(1) of the JGST Act is not an empty formality or a mere pretext but integral to principles of natural justice and fair play.
The HC court observed that in the instant case purported show cause notice has been issued but at the cost of repetition, the same was issued in a format without striking out irrelevant particulars which is not the intent of the legislature.
Thus, the bench holds that the foundation of the proceeding in the instant case suffers from material irregularity and hence not sustainable being contrary to Section 73 (1) of the JGST Act.
The bench viewed that the impugned show cause notice in the instant case does not fulfill the ingredients of a proper show cause notice and thus amounts to violation of principles of natural justice.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
