Ms Triveni Metal And Power PVT LTD Through Its Director Shri Manish Kumar Mishra vs. The State Of Jharkhand

Held

The Court held that the summary of show cause notices (DRC-01), adjudication orders, and all subsequent orders issued by the department in all the writ applications were bad in law. This was primarily because they were issued without the mandatory issuance of any show cause notice and without affording the petitioners an opportunity of personal hearing, which is a mandatory requirement under the Act. The Court found that the DRC-01 notices were vague and lacked details, violating the principles of natural justice. Furthermore, no detailed orders were passed, and the DRC-07 notices were issued in clear violation of Rule 142(5) of the JGST Rules. The Court noted that the respondents failed to produce any documentation to prove that proper procedure was followed or that the orders were served upon the petitioners. Consequently, all the summary of SCN and subsequent orders were quashed and set aside. The matters were remitted back to the concerned respondents to pass fresh orders in accordance with the law after following the principles of natural justice. The Court expressly left undecided the question of whether an assessee can invoke jurisdiction under Section 108 of the JGST Act.

Facts

Multiple petitioners, including M/s Samridhi Enterprises, M/s Raj Keshri Ispat & Energy Pvt. Ltd., and others, filed writ petitions before the Jharkhand High Court challenging various orders passed by the State Tax authorities under the Jharkhand Goods and Services Tax (JGST) Act, 2017. The petitioners contended that the authorities failed to issue proper show cause notices and provide relied-upon materials, thereby violating principles of natural justice. The tax periods involved varied across the petitions, with some orders dating back to 2018 and 2020. The revenue authorities issued notices like DRC-01, DRC-07, and DRC-13, and in some cases, adjudication orders and penalty orders were passed. The petitioners argued that these actions were procedurally flawed and lacked proper adjudication.

Key Issues

1. Whether the show cause notices issued under Section 73/74 of the JGST Act, along with the summary show cause notice under Rule 142(1), were mandatory and if their absence vitiates the entire proceedings? - Petitioner's argument: The petitioners argued that the failure to issue proper show cause notices, provide relied-upon materials, and grant an opportunity of hearing constitutes a violation of the principles of natural justice and renders the subsequent orders bad in law. They relied on the mandatory nature of show cause notices as per Section 73/74 of the JGST Act and Rule 142(1). - Revenue's argument: The respondents (State Tax authorities) failed to produce any documents to satisfy the court that proper procedure was followed in passing the orders. They could not bring on record any material to show that proper show cause notices were issued or that the principles of natural justice were complied with.