Back
IN THE HIGH COURT OF JHARKHAND AT RANCHI
RONGON MUKHOPADHYAY, DEEPAK ROSHAN, JJ.
M/s Shree Ram Agrotech – Petitioner
Versus
The State of Jharkhand – Respondent
W.P. (T) No. 163 of 2023
Decided On : 15-06-2023
JGST Act - Summary Order - Section 73, Section 73(1), Section 73(9), Rule 142 - The court quashed the Summary Order in Form GST DRC-07, dated 19.01.2019, the Appellate Order, and the recovery notice, and directed the Respondent department to issue a fresh show cause notice to the Petitioner, if so advised, and proceed in the matter strictly following the provisions of JGST Act and its Rules.
Fact of the Case:
The Petitioner challenged the Summary Order in form GST DRC-07, dated 19.01.2019, the Appellate Order, and the consequential recovery notice issued under Section 79 of the JGST Act, 2017. The Petitioner contended that the Summary Order was passed without a detailed show-cause notice as required under Section 73(1) of the JGST Act, and that no detailed adjudication order was served as required under Section 73(9) of the JGST Act.
Finding of the Court:
The court found that the Respondents failed to provide a detailed show cause notice and a detailed adjudication order as required by the JGST Act, and that the Appellate authority did not consider the grounds taken by the Petitioner. The court quashed the Summary Order, the Appellate Order, and the recovery notice, and directed the Respondent department to issue a fresh show cause notice to the Petitioner and proceed in the matter strictly following the provisions of JGST Act and its Rules.
Issues: The issues revolved around the lack of a detailed show cause notice and a detailed adjudication order as required by the JGST Act, and the failure of the Appellate authority to consider the grounds taken by the Petitioner.
Ratio Decidendi: The court held that the Summary Order was passed without a detailed show cause notice and a detailed adjudication order as required by the JGST Act, and that the Appellate authority failed to consider the grounds taken by the Petitioner.
Final Decision: The court quashed the Summary Order, the Appellate Order, and the recovery notice, and directed the Respondent department to issue a fresh show cause notice to the Petitioner and proceed in the matter strictly following the provisions of JGST Act and its Rules.
JUDGMENT :
DEEPAK ROSHAN, J.
1. In the instant writ application the Petitioner has challenged the Summary Order in form GST DRC-07, dated 19.01.2019 bearing reference number ZA200119000232J, issued by the Respondent No. 4; whereby tax, interest and penalty under the Jharkhand Goods and Service Act (in short JGST Act) amounting to Rs. 8,04,134/- has been imposed upon the Petitioner.
The Petitioner has further challenged the Appellate Order, dated 03.09.2022 bearing memo No. 580, passed by the Joint Commissioner of Commercial Taxes (Appeal), Dhanbad Division; whereby the appeal preferred by the Petitioner, challenging the summary order in form GST DRC-07 dated 19.01.2019, was dismissed.
The Petitioner has additionally challenged the consequential recovery notice, dated 19.01.2021 having reference no. 78, issued under Section 79 of the JGST Act, 2017 by the Respondent No. 3; whereby the Petitioner was directed to pay the outstanding liability of Rs. 8,04,134/- based on the Summary Order in form GST DRC-07.
2. The brief fact of the case as disclosed in this application is that the petitioner is primarily engaged in the business of trading of ferrous waste and scrap, iron, steel, ingots and other metal articles and is registered under the provisions of the Goods and Services Tax Act, 2017 having registration No. 20AHGPS1438K1ZE.
On 19.01.2021, the petitioner received a recovery notice issued by the respondent No. 3. The said recovery notice was captioned as reminder for recovery of alleged demand of Rs. 8,04,134/- based on the alleged demand order, having no. 1899 dated 19.01.2019, and based on DRC-07 having Reference No. ZA200119000232J dated 19.01.2019 for the period July 2017 to March 2018. After the said reminder notice dated 19.01.2021, the petitioner approached the office of the respondent no. 2 and 3 enquiring about the basis and details of the said demand of Rs. 8,04,134/-. However, the petitioner did not receive any concrete response from the respondent authorities.
In the meantime, the second wave of the COVID pandemic created substantial hurdle for the petitioner to gather the details of the said demand. After the second wave settled down, the petitioner again approached the respondent nos. 2 and 3. As a matter of fact, the petitioner vide its application dated 25.08.2021 applied for a certified copy of the Form DRC-07 dated 19.01.2019 passed in the case of the petitioner. The certified copy of DRC-07 was given to the petitioner on or around 27.08.2021.
Since Form DRC-07 is only a summary order and the petitioner was not provided with the detailed order in terms of Section 73 of the JGST Act and as the petitioner was not provided with the show cause notice, the petitioner vide its letter dated 01.09.2021, requested the respondent authorities to provide a copy of the detailed order and the show cause notice as soon as possible.
The respondent authorities expressed their inability to the provide the copy of the detailed order and the show cause notice to the petitioner as these documents were not available in the records of the respondent-authorities; accordingly, no copy of the detailed order and the show-cause notice were provided to the petitioner.
The petitioner filed an appeal before the respondent No. 5 on 09.09.2021 challenging the said summary order in Form DRC-07 dated 19.01.2019 in Form GST APL-01 before the respondent No. 5. The respondent No. 5 vide its order dated 03.09.2022 dismissed the appeal.
The specific case of the petitioner is that it had neither received DRC-01; nor any detailed show-cause notice and above all, no adjudication order has been passed in the instant case and only on the basis DRC-07, which is summery of the Order, the Respondents are not entitled for recovery as it is against the mandatory provisions of the JGST Act.
3. Mr. Rahul Lamba, learned counsel for the Petitioner has contended that the Summary Order in form GST DRC-07, dated 19.01.2019 by which tax, interest and penalty under the JGST Act am
The main legal point established in the judgment is that the Summary Order must be supported by a detailed show cause notice and a detailed adjudication order as required by the JGST Act, and the App....
The main legal point established in the judgment is the mandatory and imperative nature of the show cause notice requirement under Section 74(1) of the JGST Act and the need for specific charges in t....
The central legal point established in the judgment is the requirement of personal hearing and compliance with statutory provisions, emphasizing the principles of natural justice in adjudicative proc....
The main legal point established in the judgment is the violation of principles of natural justice and the disregard of mandatory provisions of the GST Act by the respondent, leading to the quashing ....
A summary of a show cause notice in electronic form cannot substitute the requirement for a formal show cause notice under the tax legislation. Issuance of a proper notice is a mandatory condition pr....
Non-compliance with the prescribed procedure for initiating proceedings under Section 73 of the JGST Act leads to a violation of principles of natural justice, rendering any adjudication order non-es....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
