D V Industries vs. Union Of INDIA

Held

The Court noted that the primary grievance of the petitioner was the alleged factual inaccuracy in the show cause notice, specifically the assertion that the pre-SCN notice was not responded to, despite the petitioner claiming to have filed a reply and documents. The Court observed that the petitioner had not yet responded to the impugned SCN itself. It was held that the petitioner has an opportunity to raise all their contentions, including challenging the factual assertion in the SCN, before the appropriate authority. The Court did not decide on the mandatory nature of the DRC-01A notice or the stage of adjudication. The writ petition was disposed of by granting liberty to the petitioner to file a response to the SCN within four weeks. The respondents were directed to proceed in accordance with law after considering the petitioner's response and submitted documents.

Facts

The petitioner, D V Industries, a registered dealer under the GST Act, received a notice in form GST DRC-01A on January 29, 2024, regarding alleged fake input tax credit. The petitioner responded to this notice on February 20, 2024. Subsequently, a show cause notice (SCN) dated July 12, 2024, was issued under Section 74 of the Rajasthan Goods and Service Tax Act, 2017. The petitioner contends that the SCN incorrectly states that no reply was filed to the earlier notice and no documents were furnished. The petitioner seeks to quash this SCN and requests that their earlier reply be considered.

Key Issues

1. Whether the statement in the show cause notice dated 12.07.2024, alleging that the petitioner has not filed a reply to the earlier notice dated 29.01.2024 and has not furnished documents, is factually incorrect, thereby vitiating the SCN? Petitioner's Contention: The petitioner argues that the SCN contains a factual misstatement by claiming no reply was filed to the pre-SCN notice, whereas a reply along with documents was indeed submitted. They contend this makes the SCN liable to be set aside and that the respondents should consider their prior reply before proceeding. Respondents' Contention: The respondents, through their counsel, submit that the issuance of the notice in form DRC-01A was not mandatory, and no adjudication could have been done at that pre-SCN stage.