Deepak Kumar Bhagat vs. Commissioner Of State Tax State Of Jharkhand Jharkhand Goods And Service Tax

Facts

The petitioner, Deepak Kumar Bhagat, proprietor of M/s Deepak Kumar Bhagat, filed a writ petition challenging various actions by the Respondent No. 2, the Deputy Commissioner of State Tax. These actions included a Show Cause Notice dated August 27, 2020, for the period April 2018 to March 2019, a Summary of Show Cause Notice in FORM GST DRC-01, and a Summary of Order in FORM GST DRC-07 dated December 14, 2020. The petitioner also challenged an order dated September 13, 2021, passed by the Appellate Authority (Joint Commissioner, JGST, Godda, Dumka), which rejected the petitioner's appeal against the Summary of Order. The appeal was rejected on the ground of "Non receipt of certified copies" without providing an opportunity of hearing. The petitioner contended that there was no difference in ITC amounts between GSTR-3B and GSTR-2A for the period in question.

Held

The Court held that the rejection of the petitioner's appeal by the first appellate authority solely on the ground of non-receipt of certified copies was a hyper-technical view. The Court emphasized that in tax matters, which entail financial liability, a hyper-technical approach should not be adopted. An opportunity of hearing ought to have been granted to the petitioner, especially when the appeal was filed within the prescribed period of limitation. Consequently, the Court set aside the order passed by the appellate authority. The Court directed the parties to appear before the appellate authority on or before November 10, 2025, for the appeal to be decided on merits expeditiously, preferably by December 31, 2025. The ratio decidendi is that tax authorities should not adopt hyper-technical approaches, particularly when financial implications are involved, and must provide an opportunity of hearing before rejecting appeals on procedural grounds.

Key Issues

1. Whether the Show Cause Notice issued by the Respondent No. 2 under Section 73 of the Jharkhand Goods and Services Tax Act, 2017, for the period April 2018 to March 2019, is vague, lacks jurisdiction, and is a mechanical reproduction of statutory provisions, making it liable to be quashed? The petitioner argued that the notice was vague, did not disclose the specific offense or contravention, and was a mere reproduction of Section 73 without striking out irrelevant portions. Furthermore, the petitioner contended that a penalty of 100% of the tax amount was not imposable under Section 73. 2. Whether the Summary of Show Cause Notice (FORM GST DRC-01) and the Summary of Order (FORM GST DRC-07) are unsustainable and without jurisdiction, having been issued without a proper show cause notice under Section 73? The petitioner argued that these notices were issued without proper procedural compliance. 3. Whether the rejection of the petitioner's appeal by the Appellate Authority on the sole ground of "Non receipt of certified copies", without providing an opportunity of hearing or notice, is illegal and unsustainable? The petitioner contended that the appeal was filed within the prescribed limitation period and its rejection on such technical grounds was unjust.