Roushan Kumar Chouhan vs. Commissioner Of State Tax Jharkhand Goods And Service Tax

Held

The Court held that the show cause notice at Annexure-1 was vague, failing to strike out particulars or enumerate specific contraventions, thus violating the principles of natural justice. It reiterated the finding in M/s NKAS SERVICES PRIVATE LIMITED that a summary of show cause notice in Form GST DRC-01 cannot substitute a proper show cause notice. The Court also noted the absence of an adjudication order. Furthermore, the Court found that the levy of 100% penalty in the Summary of Order (Annexure-3) was contrary to Section 73(9) of the Act, which allows a penalty up to 10% of tax dues. This indicated a non-application of mind by the Deputy Commissioner. Consequently, the impugned show cause notices and summaries of show cause notice and order were quashed. The Court granted liberty to the respondents to initiate fresh proceedings with a proper show cause notice in accordance with law. The issue regarding the requirement of Form GST ASMT-10 was expressly left undecided.

Facts

The petitioner, Roushan Kumar Chouhan, a civil contractor registered under the JGST Act, 2017, challenged a show cause notice dated August 28, 2020, issued under Section 73 of the Act for the period April 2018 to March 2019. He also challenged the summary of the show cause notice in Form GST DRC-01 and the summary of the order in Form GST DRC-07, both dated December 12, 2020. These were issued by the Deputy Commissioner of State Tax, Godda. The petitioner contended that the show cause notice was vague, failed to specify contraventions, and that the summary of the order imposed a 100% penalty, which is impermissible under Section 73(9) of the Act. The respondents argued that the notices followed standard formats and that the petitioner had an alternative remedy of appeal. They also claimed that the petitioner did not bring to their notice any changes in GSTR-2A figures after suppliers filed their GSTR-1.

Key Issues

1. Whether the show cause notice dated August 28, 2020, issued under Section 73(1) of the JGST Act, 2017, is vague and violates the principles of natural justice, as argued by the petitioner, relying on the judgment in M/s NKAS SERVICES PRIVATE LIMITED Versus State of Jharkhand & others. The petitioner contends it does not specify contraventions. The respondents argue it follows standard formats and mentions the difference between GSTR-3B and GSTR-2A. 2. Whether the summary of the show cause notice in Form GST DRC-01 can substitute a proper show cause notice, as argued by the petitioner, citing M/s NKAS SERVICES PRIVATE LIMITED. The respondents assert it clearly mentions the charge. 3. Whether the summary of the order dated December 12, 2020, imposing a 100% penalty, is permissible under Section 73(9) of the JGST Act, 2017, as contended by the petitioner. The petitioner argues that 100% penalty is only leviable under Section 74(9). The respondents do not specifically deny this plea in their counter-affidavit.