Santosh Kumar Roy vs. The State Of Jharkhand

Facts

The petitioner, Santosh Kumar Roy, a civil contractor, challenged a show cause notice dated January 7, 2022, issued by the Deputy Commissioner of State Taxes, Deoghar, under Section 73 of the Jharkhand Goods and Services Tax (JGST) Act, 2017. He also challenged the consequential summary of show cause notice in FORM GST DRC-01 and the summary of order in FORM GST DRC-07, both dated February 9, 2022. The petitioner argued that these notices were vague, not properly formatted, and failed to specify the contraventions. The revenue contended that the petitioner had an alternative remedy under Section 107 of the JGST Act and that the petitioner had failed to reply to earlier notices. The tax period in dispute was January 2019-February 2019, related to alleged violations of Section 16(4) of the JGST Act.

Held

The Court held that the show cause notice dated January 7, 2022, issued under Section 73(1) of the JGST Act, was in a format without striking out irrelevant particulars, rendering it vague and failing to clearly spell out the contravention for which the petitioner was charged. This was considered worse than the summary of show cause notice. The Court further noted that the summary of order in FORM GST DRC-07 was issued on February 9, 2022, without any adjudication order, which was contrary to the law. Citing its own decision in NKAS Ltd. and Supreme Court judgments, the Court emphasized that a show cause notice must provide clear charges to allow the noticee a reasonable opportunity to defend themselves, which is a fundamental aspect of natural justice. The Court found that the principles of natural justice had not been complied with. Consequently, the Court held that the ground of alternative remedy was not acceptable in this case due to the procedural lapses. The Court quashed and set aside the impugned show cause notice, DRC-01, and DRC-07. The matter was remitted back to the Deputy Commissioner, State Tax Deoghar, to pass a fresh order after following the due procedure of law, starting from issuing a fresh show cause notice strictly in accordance with law. The Court explicitly stated that it had not gone into the merits of the case, and the interference was solely based on the non-compliance with the JGST Act provisions and the principles of natural justice.

Key Issues

1. Whether the show cause notice dated January 7, 2022, issued under Section 73(1) of the JGST Act, 2017, is vague and does not clearly spell out the contravention for which the petitioner is charged, thereby violating principles of natural justice? 2. Whether the summary of order in FORM GST DRC-07 dated February 9, 2022, issued without an adjudication order, is in accordance with the JGST Act and Rules? Petitioner's arguments: The petitioner argued that the show cause notice was in a format without striking out irrelevant particulars, making it vague and non-specific. He contended that this violated the principles of natural justice, as he was not provided with a clear understanding of the charges to defend himself. He relied on the High Court's decision in NKAS Ltd. and Supreme Court decisions in Oryx Fisheries P. Ltd. and Larsen & Toubro Ltd. regarding the necessity of specific charges in show cause notices. Revenue's arguments: The revenue argued that the petitioner had an alternative and efficacious remedy under Section 107 of the JGST Act and therefore, a writ application was not maintainable. They contended that the petitioner failed to reply to earlier notices and the show cause notice was issued for specific violations under Section 16(4) of the JGST Act. They argued that there was no procedural lapse and the writ application should be dismissed.