M/S Maa Chintpurni Steel Through Its Proprietor Sri Ramesh Kumar vs. The State Of Jharkhand Through The Commissioner Of State Taxes
Original PDF →Facts
The petitioner, M/s Maa Chintpurni Steel, filed a writ petition challenging a summary order in Form DRC-07 dated April 9, 2022, which imposed a liability of Rs. 5,95,245.53. This order was based on discrepancies found during the scrutiny of returns for April 2019 to March 2020. The petitioner contended that notices were sent to an outdated email address and that the discrepancies arose from a mistake by M/s Central Coalfields Limited (CCL). The petitioner provided evidence of payments made by CCL and a DRC-03 form. The petitioner also challenged the cancellation of its GST registration dated October 25, 2021, for purported mismatches between GSTR-3B and GSTR-2A, arguing it was initiated during the COVID period without awaiting a reply.
Held
The Court held that the writ petition was maintainable, rejecting the State's objection on technical grounds, citing the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others, which allows writ petitions in cases of breach of natural justice or lack of jurisdiction. The Court found that the petitioner had provided a plausible explanation for the discrepancies, attributing them to a mistake by CCL and supported by documentary evidence. It was also noted that the notices were sent to an outdated email address, indicating a bonafide mistake by the department. Consequently, the summary order dated April 9, 2022, was quashed. The Court directed that the matter be remitted back to the State Tax Officer to pass an appropriate order after affording the petitioner an opportunity to file its defense and reply to the notice dated September 20, 2021. The bank account of the petitioner was ordered to be unfrozen. The issue regarding the cancellation of GST registration was not explicitly decided, but the overall relief granted implies a reconsideration of the petitioner's case.
Key Issues
1. Whether a summary order in Form DRC-07 could be passed without issuing a notice under Section 73(1) of the CGST Act, 2017, and affording an opportunity of hearing to the petitioner? 2. Whether the cancellation of the petitioner's GST registration was illegal and arbitrary, given that it was initiated during the COVID period and without awaiting the petitioner's reply? The petitioner argued that the summary order was passed without proper notice and opportunity to be heard, violating principles of natural justice. They contended that the notices were sent to an incorrect email address and that the discrepancies were due to a third-party error (CCL). The petitioner relied on the fact that they had produced evidence supporting their explanation. The petitioner further argued that the GST registration cancellation was mechanical and done during a challenging period without due process. The State, through its Senior Standing Counsel, raised an objection regarding the maintainability of the writ petition, likely suggesting an alternative statutory remedy.
Sections Cited
Section 73, Rule 142(1), Rule 142(5)
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF JHARKHAND AT RANCHI
(Civil Writ Juri iction) WP(T) No. 4087 of 2023
M/s MAA CHINTPURNI STEEL, a proprietorship concern, through its proprietor, Sri Ramesh Kumar, son of Shri Ram Pravesh Singh, aged about 40 years, resident of Sonatand, Bokaro, PO Siwandih & PS Bokaro Steel City, Bokaro-827010, Jharkhand
...… Petitioner
Versus 1.The State of Jharkhand, through the Commissioner of State Taxes, having its office at Project Bhawan, Dhurwa, PO Dhurwa, PS Jagannathpur, District Ranchi (Jharkhand) 2.The Deputy Commissioner of State Taxes, Bokaro Circle, Bokaro, having his office at Opposite City Civil Court, Dhanbad, PO and PS Dhanbad, Town and District Dhanbad, Jharkhand …. ... Respondents
CORAM: HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE NAVNEET KUMAR
For the Petitioner : Mr. Nitin Kumar Pasari, Advocate
Mr. Shubham Choudhary, Advocate
Ms. Sidhi Jalan, Advocate
Mr. Gaurav Kaushalesh, Advocate
Mr. Shubham Choudhary, Advocate For the State
: Mr. Ashok Kumar Yadav, Sr. SC-I
Mr. Aditya Kumar, AC to Sr. SC-I
Order No.6/Dated: 20th March 2024
In this writ petition, the petitioner has made the following prayers: “A. For issuance of an appropriate writ, order or direction, directing upon the Respondents, to show cause as to how and under what authority of law, a Summary Order in Form DRC-07, could be passed, without issuance and service of DRC-01, much less any notice under Section 73(1) of CGST Act, 2017 and an order under Section 73 of the Act. B. Consequent upon showing cause if any, and on being satisfied that the department could not have passed summary order in Form DRC-07, without following the modalities prescribed under the law, and without affording any opportunity of hearing to the Petitioner, the Summary Order dated 09.04.2022 bearing Reference No. ZD2004220006851 (Annexure-1), issued under Rule 142(5), along with Order passed under Section 73 of the JGST Act, 2017 dated 09.04.2022 bearing Reference No. 259 be quashed and set aside, being illegal, arbitrary and bad in law. C. For issuance of appropriate writ, order or direction, restraining the Respondents from taking any action pursuant to the Summary Order dated 09.04.2022 bearing Reference No. ZD2004220006851 (Annexure-1). D. For issuance of an appropriate writ, order or direction, directing upon the Respondents to show cause as to how and under what authority of 2 WP(T) No. 4087 of 2023
law, the Goods & Services Tax Registration of the Petitioner would be cancelled for purported mismatch between FORM GSTR-3B and FORM GSTR-2A, without awaiting the reply of the Petitioner inasmuch as the same had been initiated during the peak COVID period. E. Consequent upon showing cause if any, and on being satisfied that the Respondents could not have cancelled the registration of the Petitioner on such grounds and the proceedings having been initiated and concluded in a mechanical and vague manner, the Order for Cancellation of Registration dated 25.10.2021 bearing Reference No. ZA201021014774B (Annexure-4) be quashed and set aside, being illegal, arbitrary and bad in law and direct the Respondents to restore the Goods & Services Tax Registration of the Petitioner. F. For issuance of any other appropriate writ(s)/ order(s)/ direction(s) as Your Lordships may deem fit and proper in the facts and circumstances of the case for doing justice to the Petitioners.”
Briefly stated, the petitioner-Firm has been duly registered with the Goods and Service Tax Department vide GSTIN-20AMYPK6176D3ZT. Sometime in April 2022, summary of the order in GST DRC-07 vide Ref. No. ZD2004220006851 dated 9th April 2022 showing details of the demand was issued to the petitioner-Firm fastening a liability to the tune of Rs. 5,95,245. 53. In the order passed on 9th April 2022, the State Tax Officer observed that during scrutiny of the Return for the tax period between April 2019 to March 2020 discrepancies were found for which a notice in Form- GST ASMIT-10 vide Reference No. 657 dated 20th September 2021 was issued. It is further indicated in the order dated 9th April 2022 under section 73(9) read with Rule 142(1) of the Jharkhand Goods and Services Tax Rules, 2017 a show cause notice vide Reference No. 152 dated 15th February 2020 was issued to the petitioner-Firm.
The petitioner-Firm has taken a stand that the aforementioned notices were issued at the Email ID which was changed by it sometimes in February 2019. The petitioner-Firm has produced on record OTP validation of Email ID vide Annexure-2 to demonstrate that the Email ID “maachintpurnisteel.bokaro@gmail.com” referred therein is registered with the GST department. However, the main plank of the petitioner-Firm is that the discrepancies which were detected by the State Tax Officer as regards availing of tax benefits under CGST and JGST were on account of the mistake of M/s Central Coalfields Limited (in short, CCL). The petitioner- Firm has also brought on record the payments made by the CCL and, in 3 WP(T) No. 4087 of 2023
support thereof, it has produced on record a copy of DRC-03 from the website of the Goods and Services Tax Department.
The aforementioned aspect of the matter is not in dispute. However, in the counter affidavit filed in the present proceeding, the respondents have not even touched this stand of the petitioner-Firm. We are prima-facie of the view that the petitioner has explained the discrepancies which are indicated in the notice dated 20th September 2021. We are further of the view that any assesse who is in possession of a document vide Annexure-6 and 8 would have definitely responded to the show-cause notice in Form-GST ASMIT-10. There seems to be a bonafide mistake on the part of the department in sending the notices at the Email address previously registered with the State GST Department.
Therefore, having regard to the materials produced by the petitioner, the objection raised by Mr. Ashok Kumar Yadav, the learned Senior SC-I as to maintainability of this writ petition must be rejected. This is quite a well-settled preposition that the juri iction of the writ petition under Article 226 of the Constitution of India is plenary in nature and without any fetters, much less any technical objection. In “Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others” (1998) 8 SCC 1, the Hon’ble Supreme Court clearly indicated that in cases where the order has been passed in breach of natural justice or the Authority passing the order lacks juri iction the writ petition is maintainable. Even so, statutory remedy to the aggrieved party is not always a ground not to entertain the writ petition.
Having regard to the materials on record, we are of the opinion that the matter needs to be remitted back to the State Tax Officer who shall pass an appropriate order after affording an opportunity to the petitioner- Firm to place its defence by filing his reply to the notice dated 20th September 2021. Therefore, summary order dated 9th April 2022 is quashed. The petitioner-Firm shall be at liberty to produce the materials which form part of this writ petition and any other material in support of its defence.
This writ petition succeeds to the aforesaid extent with a liberty to the petitioner-Firm to file its show-cause reply by 19th April 2024. The 4 WP(T) No. 4087 of 2023
bank account of the petitioner-Firm shall be unfreezed forthwith upon receipt of a copy of this order.
WP(T) No. 4087 of 2023 is disposed of.
I.A. No. 2990 of 2024 for interim protection is disposed of.
(Shree Chandrashekhar, A.C.J.)
(Navneet Kumar, J.)
Tanuj/
Reproduced from the public record of the Jharkhand High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.