Proceedings initiated under penal tax provisions require clear allegations of fraud or suppression in the notice. Furthermore, the failure to provide a mandatory hearing and a reasoned adjudication order renders the proceedings legally unsustainable, violating procedural fairness and statutory obligations.

ORDER :

DEVASHIS BARUAH, J.

Heard Ms. Arati Agarwal, learned counsel appearing on behalf of the Petitioner. Mr. Z. Kulnu, learned CGC appears on behalf of the Respondent No. 1/Union of India and Mr. Veto V. Zhimomi, learned Government Advocate appears on behalf of the Respondent Nos. 2 and 3, i.e. GST Authorities of the State of Nagaland.

2. The Respondent No. 4 is not represented when the matter is taken up

3. The issues involved in both the writ petitions being the same, they are taken up for disposal by this common Judgment and Order. However, for the sake of convenience and clarity in passing the directions, this Court finds it relevant to take note of the brief facts which led to the filing of both the writ petitions.

WP(C)/129/2024

4. The Petitioner No. 1 herein is the Proprietor of a Firm in the name and style of M/S Dimapur Diesels. The said Firm, namely M/S Dimapur Diesels is registered under the Central Goods & Services Tax Act, 2017 (for short ‘CGST’) and have been allocated a Registration No. being GSTIN13ABUPA6964C2ZO. The present writ petition so filed challenges the Order dated 18.07.2023, passed by the Respondent No. 3 under Section 74 (9) of the Nagaland Goods & Services Tax Act, 2017 (for short ‘NGST’).

5. The materials on record shows that the Petitioner No. 2 herein was issued a Notice in DRC01-A dated 14.11.2022 wherein the determined tax interest and penalty for the periods 2019-2020, 2020-2021 and 2021-2022 were mentioned.

6. The Petitioner No. 2upon receipt of the said Notice sought for time for complying with the same. Thereupon, the Respondent No. 2 issued another Notice under DRC01-A for the Financial Years 2019-2020, 2020- 2021 and 2021-2022. It is, however, pertinent to mention that a perusal of these Notices which were issued under DRC01-A categorically mention that these Notices were issued in the context of Section 74 of the NGST Act. The said aspect of the matter is further clear from the Notice itself wherein it is stated that non-compliance with the said Notice would attract Notice under Section 74 (1) of the NGST Act. The Petitioner, on 24.05.2023 submitted a Reply.

7. Be that as it may, it is alleged by the Petitioner No. 2 that as the Respondents indulged in coercive steps the Petitioner No. 2 under compelling circumstances had made certain payment under protest and uploaded the same under DRC03 on 27.06.2023.

8. On 28.06.2023, the Respondent No. 1 issued a Show Cause Notice under Section 74 (1)&(7) thereby intimating the Petitioner No. 1 that for the period 2019-2020, 2020-2021, 2021-2022 and 2022-2023 the Petitioner had paid only the penalty portion of 15% amounting to Rs. 12,11,020/- (Rupees twelve lakhs eleven thousand and twenty) for the period 2019-2020, Rs. 68,95,004/- (Rupees sixty eight lakhs ninety five thousand and four) for the period 2020-2021, Rs. 4,31,406/- (Rupees four lakhs thirty one thousand four hundred and six) for the period from 2021- 2022 and Rs. 4,37,926/- (Rupees four lakhs thirty seven thousand nine hundred and twenty six) for the period 2022-2023. The Petitioner No. 1 was asked to show cause as to why the Payment Notice in DRC07 should not be issued to the Petitioner for the remaining amount of tax and interest as detailed therein.

9. It appears that the Petitioner did not file a Reply to the said Show Cause and this resulted in passing of an Order on 18.07.2023 wherein it was mentioned