The division bench of the Jharkhand High Court has quashed the forms DRC-01 A and DRC-02 issued along with show-cause notice without giving an opportunity of hearing to the assessee as per the provisions of the Central GST Act, 2017.
The petitioner, M/s. Om Sai Ram Enterprises approached the High Court contending that under Section 74 (5) of the Act read with Rule 142 of the Rules, provisions have been incorporated for issuance of intimation prior to issuance of show cause notice to an assessee by the Proper Officer. It was argued that in the instant case the respondent-authority treated the information/intimation under Section 74 (5) of the Act to be show cause notice which is not legal. According to the petitioner, the purported show cause notices not only that the respondent has already pre-judged and predecided the entire issue and has fastened the liability upon the petitioner, but even no direction was given to the petitioner to file its representation/reply to show cause notice and even no date of hearing was fixed by the respondent-authority.
A bench comprising Justice Aparesh Kumar Singh and Justice Deepak Roshan observed thaton 25.02.2020 DRC-01 A (intimation of tax) DRC-02 (Summary of Statement) and intimation of liability under Section 74 (5) of the Act was issued on the same date i.e. 25.02.2020, thereafter, on 04.06.2020 summary of show cause notice in the form of DRC-01 along with show cause notice was issued, fixing the date as 03.07.2020 for filing reply and thereafter, without giving any opportunity of hearing and without fixing any date for hearing adjudication order has been passed on 06.07.2020.
Directing fresh-adjudication, the Court held that “here lies the lacuna committed by the respondents in noncompliance of the statutory provisions of the JGST Act and also the settled principles of natural justice. The issue of reasonable opportunity has been dealt in detail in the case of NKAS Service Pvt. Ltd. reported in 2021-VIL-732-Jhar. Further, in the case of Godavari Commodities Ltd. (supra) the matter has been further clarified about requirement of personal hearing.”
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