Shree Vasu Steels PVT LTD vs. Commissioner Of The SGST

Held

The Court held that the simultaneous uploading of the intimation in Form GST DRC-01A and the show cause notice under Section 74(1) of the GST Act was impermissible. The Court found that the scheme of Rule 142 of the Central Goods and Service Tax Rules, 2017, mandates that a person chargeable with tax is entitled to an intimation in Form GST DRC-01A before the issuance of a notice under Section 74. This allows the assessee an opportunity to respond to the intimation. In this case, the petitioner was given only until 31.03.2023 to respond to both the intimation and the show cause notice, which were uploaded on 21.03.2023. This did not provide a reasonable opportunity for the petitioner to file their submission in response to the notice. Consequently, the impugned order dated 10.11.2023 was quashed. The matter was remanded back to the Competent Authority, with directions for the petitioner to file their reply to the intimation within two weeks, and for the Competent Authority to consider it within two weeks thereafter, with liberty to issue a fresh show cause notice if necessary. The Court noted that if the petitioner failed to submit the reply within the stipulated time, the authorities could proceed as per law.

Facts

The petitioner challenged an order dated 10.11.2023 passed by the Deputy Commissioner, State Tax, under Section 74(9) of the Uttarakhand GST/CGST Act, 2017. The petitioner contended that they were denied an opportunity to file a reply to the notice issued under Section 74. Specifically, the intimation in Form GST DRC-01A and the show cause notice under Section 74(1) were uploaded simultaneously on 21.03.2023. The petitioner argued this procedure was impermissible, as it did not allow sufficient time to respond to the intimation before the deadline for the reply to the show cause notice. The revenue, through the learned Standing Counsel, conceded that the petitioner was not given a reasonable opportunity to present their case and agreed that the matter could be remanded.

Key Issues

1. Whether the simultaneous uploading of the intimation in Form GST DRC-01A and the show cause notice under Section 74(1) of the Uttarakhand GST/CGST Act, 2017, violates the procedural requirements and denies the petitioner a reasonable opportunity to be heard, as mandated by Rule 142 of the Central Goods and Service Tax Rules, 2017? The petitioner argued that Rule 142(1)(a) and Rule 142(2) of the Central Goods and Service Tax Rules, 2017, envisage a sequential process where an intimation (Form GST DRC-01A) is provided first, allowing the assessee to respond, followed by a show cause notice (Form GST DRC-01) under Section 74(1). The simultaneous uploading of both documents, with the same deadline for reply to the intimation and the show cause notice, effectively curtailed the petitioner's right to respond to the intimation before being required to reply to the formal notice, thereby violating principles of natural justice. The revenue, based on instructions, fairly submitted that the petitioner was not afforded a reasonable opportunity of being heard and that the matter could be remanded to the Competent Authority.