M/S Ravi Enterprises vs. The Commissioner Of State Tax

Held

The Court held that the simultaneous uploading of the intimation in Form GST DRC-01A and the show cause notice under Section 73(1) of the GST Act was impermissible. The Court referred to Rule 142(1A) and 142(2A) of the Central Goods and Service Tax Rules, 2017, which clearly indicate that the intimation in Form GST DRC-01A is to be provided before the show cause notice, allowing the assessee to respond to the proposed liability. In this case, the petitioner was denied the valuable right to file submissions in response to the intimation. The revenue also conceded that a reasonable opportunity was not provided. Consequently, the impugned order dated 28.06.2022 was quashed. The matter was remanded back to the Competent Authority. The petitioner was granted two weeks to file its reply to the intimation in Form GST DRC-01A, and the Competent Authority was directed to consider the reply within two weeks thereafter. The Competent Authority was also given 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 would be at liberty to proceed as per law.

Facts

M/s Ravi Enterprises, a taxable person under the GST Act, filed a writ petition challenging an ex-parte assessment-cum-demand order dated 28.06.2022 passed by the Deputy Commissioner, State Tax. The order demanded payment of Rs. 803939.46 with penalty and interest. The petitioner contended that it was denied an opportunity to file a reply to the intimation under Section 73, as the intimation in Form GST DRC-01A was uploaded simultaneously with the show cause notice under Section 73(1) of the GST Act. This, according to the petitioner, violated the prescribed procedure. The revenue, through the Standing Counsel, conceded that the petitioner was not given a reasonable opportunity to present its case.

Key Issues

1. Whether the simultaneous uploading of the intimation in Form GST DRC-01A and the show cause notice under Section 73(1) of the GST Act, thereby denying the petitioner an opportunity to file submissions in response to the intimation, violates the principles of natural justice and the provisions of the SGST Act and Rules? (Question of law and mixed fact and law, turning on Rule 142(1A) and 142(2A) of the Central Goods and Service Tax Rules, 2017). Petitioner's arguments: The petitioner argued that Rule 142(1A) and 142(2A) of the Central Goods and Service Tax Rules, 2017, mandate that the proper officer should first communicate details of tax, interest, and penalty in Part A of FORM GST DRC-01A before issuing a notice. This allows the assessee to make partial payments or file submissions in Part B of the form. The simultaneous uploading of the intimation and the show cause notice denied this valuable right. Revenue's arguments: The Standing Counsel, based on instructions, conceded that the petitioner was not given a reasonable opportunity to have its say in the matter and that the matter could be remanded to the Competent Authority.