No. F. 2(29)/L&J/2017-18/1201-04

SGST High Court Cases

GST - Section 74 - Essential of Show Cause Notice – Proper Show Cause Notice, mechanical reproduction of the provisions of Act - Challenge to Show cause notice on the ground that the impugned show-cause notice is vague and does not disclose the offence or contraventions and it is a mere mechanical reproduction of the provisions of Section 74 without striking of the irrelevant portions – assessee contended the show cause notice is incapable of any reply and does not fulfill the ingredients of a notice in the eyes of law, therefore, in violation of principles of natural justice – HELD - the impugned show-case notice is a notice issued in a format without even striking out any irrelevant portions and without stating the contraventions committed by the petitioner i.e. whether its actuated by reason of fraud or any willful misstatement or suppression of facts in order to evade tax - proceedings under Section 74 of the CGST Act/SGST Act have a serious connotation as they allege punitive consequences on account of fraud or any willful misstatement or suppression of facts employed by the person chargeable with tax - In absence of clear charges which the person so alleged is required to answer, the noticee is bound to be denied proper opportunity to defend itself. This would entail violation of principles of natural justice which is a well-recognized exception for invocation of writ jurisdiction despite availability of alternative remedy - In order to proceed under the provisions of Section 74 of the Act, the specific ingredients enumerated thereunder have to be clearly asserted in the notice so that the noticee has an opportunity to explain and defend himself – The Bench does not agree with the contention of the respondent that the notice ought not to be struck down if in substance it contains the matters which a notice must contain - A summary of show-cause notice as issued in Form GST DRC-01 in terms of Rule 142(1) of the CGST/JGST Rules, 2017 cannot substitute the requirement of a proper show-cause notice - Although the statutory form GST DRC-01 mentioned that there is mismatch between GSTR-3B and 2A, but that is not sufficient as the foundational allegation for issuance of notice under Section 74 is totally missing and the notice continues to be vague – the impugned notice and the summary of show-cause notice in Form GST DRC-01 are quashed – the writ petition is allowed

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