Point of Law : Sub-rule (1A) of Rule 142 (unamended) of the 2017 Rules: The proper officer shall, before service of notice to the person chargeable with tax, interest and penalty, under subsection (1) of Section 73 or sub-section (1) of Section 74, as the case may be, shall communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A.

JUDGMENT :

Rajiv Shakdher, J.

1. This writ petition is directed against the show cause notice dated 21.05.2020, issued by the respondents/revenue.

2. To be noted, the impugned show cause notice dated 21.05.2020 has been issued to several other entities/persons, including the petitioner proprietorship concern, and its authorised signatory, namely one, Mr Tarun Gulati. The relevant part of the said show cause notice is extracted hereafter:

“13.55. M/s Gulati Enterprises, 316, FIE Patparganj Industrial Area, Delhi (GSTIN 07AAGPK8981Q1ZQ) is hereby called upon to show cause to the Additional / Joint Commissioner, CGST Commissionerate, Delhi East, C.R. Building, I.P. Estate, New Delhi, within 30 days of the receipt of this Show Cause Notice as to why –

TAX OF IGST of Rs. 58,77,631/-, CGST of Rs. 53,57,374/-, SGST of Rs. 53,57,374/- & Cess of Rs. 5,44,45,143/- on goods cleared clandestinely should not be demanded and recovered from them under proviso to Section 74(1) along with interest payable thereon under Section 50 of the CGST Act., 2017 read with relevant provisions of the IGST Act, 2017, the Delhi / the Haryana State GST Act, 2017 & Section 11 of the GST (Compensation to States Act).

Penalty equivalent to the tax specified in (i) above be not imposed upon them under Section 74 and Section 122 (1) of the CGST Act, 2017 read with relevant provisions of the IGST Act, 2017, the Delhi / the Haryana SGST Act, 2017 & Section 11 of the GST (Compensation to States Act).

13.56 Mr. Tarun Gulati, Authorised signatory, M/s Gulati Enterprises, 316, FIE Patpargmj Industrial Area, Delhi (GSTIN 07AAGPK8981Q1ZQ) is also called upon to show cause to the Additional Commissioner/Joint Commissioner, CGT Commissionerate Delhi (East) having office at C.R. Building, I.P. Estate, New Delhi within 30 days of the receipt of this Show Cause Notice as to why penalty should not be imposed upon him under Section 122(I) of the CGST Act, 2017 and Section 122(1) of the Haryana/Delhi SGST Act, 2017.

3. The petitioner has assailed the aforementioned part of the show cause notice on the ground that the mandatory requirement of pre-show cause notice consultation, as embedded in Rule 142 (1A) of the Central Goods and Service Tax Rules, 2017 [in short ‘2017 Rules’], as it obtained at the relevant point in time i.e., when the show cause notice was issued, has not been adhered to.

4. Mr Vineet Bhatia, who appears on behalf of the petitioner, in support of this plea, submits that the mandatory requirement of pre-show cause notice consultation, as provided in the aforementioned Rules, has to be read with Section 74 of the CGST Act, 2017 [in short ‘the CGST Act’].

4.1 Mr Bhatia contends that, as a matter of fact, the regime after the CGST Act and Rules kicked in i.e., from 01.07.2017 had left no scope for the respondents/revenue to move away from the requirement of a pre-show cause consultation notice.

4.2. In this behalf, Mr Bhatia has also referred to a statutory form i.e., GST DRC-01A. Mr Bhatia contends that a brief perusal of the form i.e., GST DRC-01A, would show that the respondents/revenue were required to not only crystalize the tax and cess components, but also the period for which it was claimed.

4.3. Besides this, Mr Bhatia also emphasised the fact that a perusal of the aforementioned form would show that the respondents/revenue are also required to “furnish the grounds” and the “quantification” of the goods/services, based on which tax and cess is claimed.

4.4. Concededly, in this case, no pre-show cause consultation notice, as required in the statutory form, was served on the petitioner.

5. Mr Harpreet Singh, who appears on behalf of the respondents/revenue, says at the relevant point in time i.e., when the impugned show cause notice dated 21.05.2020 was issued, the statutory form referred to hereinabove was not activated on the web portal.

5.1. It is therefore Mr Singh’s contention that it is on account of this reason that a pre-show cause consultation notice could not b