Alok Steel Industries Private Limited Through Its Director Namely Kamendra Mishra vs. The State Of Jharkhand Through The Commissioner State Tax Deptt

Held

The Court held that the instant application was squarely covered by previous decisions of the Court in M/s. NKAS Services Private Limited and M/s. Godavari Commodities Limited. It was admitted that only a 'Summary of Show Cause Notice' was issued, not a proper show cause notice, which violates the principles of natural justice. The Court found that the impugned notice lacked the necessary ingredients of a proper show cause notice. Furthermore, the Court noted that no opportunity of hearing was granted to the petitioner before the demand was raised, which contravenes Section 75(4) and 75(5) of the JGST Act. Consequently, the Court quashed and set aside the Summary of Show Cause Notice (GST DRC-01), the adjudication order, and the Summary of Order (GST DRC-07). The respondents were granted liberty to initiate fresh proceedings in accordance with law. The issue of whether Form GST ASMT-10 is a condition precedent for invoking Section 73 or 74 was expressly left undecided.

Facts

The petitioner, Alok Steel Industries Private Limited, filed a writ application challenging a summary of show cause notice (GST DRC-01) dated 27.09.2019, an adjudication order dated 02.09.2020, and a summary of order (GST DRC-07) dated 04.09.2020, all issued by the Deputy Commissioner of State Tax, Ramgarh Circle. These actions pertained to the financial year 2018-19 and were based on the alleged wrongful availment of Input Tax Credit. The petitioner contended that the show cause notice lacked essential ingredients, no hearing was provided, and no formal adjudication order was passed. The revenue, while admitting that only a summary of show cause notice was issued, argued that the petitioner had an alternative remedy of appeal.

Key Issues

1. Whether the 'Summary of Show Cause Notice' in Form GST DRC-01, issued by the respondent No. 2, fulfills the ingredients of a proper show cause notice as required under Section 73(1) of the Jharkhand Goods and Services Tax Act, 2017 (JGST Act) read with Rule 142(1) of the JGST Rules, 2017, and if not, whether its issuance violates the principles of natural justice? The petitioner argued that the notice was vague and lacked foundational allegations, relying on the High Court's decision in M/s. NKAS Services Private Limited v. The State of Jharkhand & Ors. The revenue admitted that only a summary notice was issued. 2. Whether the adjudication order dated 02.09.2020 and the summary of order dated 04.09.2020 are liable to be quashed for non-compliance with the principles of natural justice, specifically the absence of an opportunity of hearing? The petitioner contended that no hearing was granted, citing the High Court's decision in M/s. Godavari Commodities Limited v. The State of Jharkhand & Ors. The revenue argued for an alternative remedy of appeal.