JUDGMENT :

(Bhargav D. Karia, J.)

1. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 30.8.2023 issued by the respondent No.1 in Form GST DRC- 01 under Sections 74(1), 122(2) and 125 of the Central Goods and Service Tax Act, 2017 (for short ‘the GST Act’) read with Rule 142(1) of the Central Goods and Service Tax Rules, 2017 (for short ‘the GST Rules’) for Financial Year 2017-18 and 2018-19 and the order in original dated 28.12.2023 passed by the respondent No.1 confirming the demand of unpaid tax on Reverse Charge Mechanism (for short ‘RCM’) on purchase of cotton from agriculturist amounting to Rs.3,73,95,300/- along with the penalty of equal amount under Section 122(2) of the GST Act.

2. Brief facts of the case are as under :

2.1 The petitioner is a partnership firm engaged into the trading and supplying of the cotton bales on wholesale basis. It is the case of the petitioner that 80% of the total turn-over is earmarked for the purpose of export.

2.2 The petitioner purchases raw cotton from the registered dealers upon upfront payment of 5% GST on the invoice price.

2.3 According to the petitioner, pursuant to the Notification No.41 of 2017 dated 23.10.2017 issued by the Ministry of Finance, Government of India, the petitioner collects tax at the rate of 0.10% on the value of goods which is exported overseas for the financial year.

2.4 The respondent No.2 issued the notice dated 22.8.2022 in Form GST ASMT-10 to clarify the discrepancies in Form GSTR-1 and Form GSTR-3B on the ground that the petitioner has purchased the cotton from unregistered suppliers/agriculturists which requires payment of GST under RCM. The petitioner, therefore, was called upon to clarify and submit the supporting documents regarding purchase like purchase ledger from registered and unregistered suppliers separately in respect of purchase of cotton.

2.5 The petitioner, by reply dated 31.8.2022 (wrongly stated as 31.5.2022 at Page No.101 of the paper-book), submitted the clarification by contending that the data was wrongly taken by the respondent of outward supply and inward supply b2b figure and has shown the difference which is unrealistic and against tax and it was pointed out that outward figures of taxable value and b2b inward taxable value cannot be compared. It was clarified that the cotton purchases from 13.10.2017 to 13.10.2018 was not liable to tax under RCM.

2.6 The respondent No.2 thereafter issued notice dated 19.10.2022 in From GST DRC-01A under Section 73(5) of the GST Act calling for the tax period Financial Year 2017-18 after considering the reply of the petitioner in response to the notice issued under Form GST ASMT-10. The petitioner was advised to pay the amount of liability ascertained of Rs.2,51,25,244/- towards non-payment of tax on the purchase of cotton from agriculturist for the period 2017-18 (15.11.2017 to 31.3.2018) as per RCM.

2.7 The respondent No.2 thereafter issued summons to the petitioner under Section 70 of the GST Act on 13.6.2023, 21.6.2023 and 30.6.2023. On 10.7.2023, the respondent No.2 issued a garnishee communication to the banker of the petitioner i.e. Bank of Baroda to restrict debit transactions in the cash credit account of the petitioner and further instructed the Bank Manager, Bank of Baroda to restrict the debit entries of all accounts operated by the petitioner under the same PAN without prior permission.

2.8 The petitioner thereafter by letter dated 19.7.2023 requested for lifting of attachment and passing of appropriate direction under Form DRC-23 as per Rule 159(5) of the GST Rules. The petitioner thereafter preferred Special Civil Application No.13291 of 2023 before this Court. This Court by order dated 3.8.2023 directed the respondent No.1 to provisionally lift the attachment over the cash credit account which came to be further extended till further orders.

2.9 The petitioner thereafter received the impugned notice dated 8.8.2023 in Form GST DRC-0