ISSUING DRC-07 WITHIN FIVE DAYS OF ISSUANCE DRC-01 IS A CLEAR PICTURE OF VIOLATION OF PRINCIPALS OF NATURAL JUSTICE

[Rajeev Jain]

"JUDGEMENT OF JHARKHAND HIGH COURT IN THE CASE OF M/S. CHITRA AUTOMOBILE, VERSUS THE STATE OF JHARKHAND, THE COMMISSIONER OF STATE TAXES, RANCHI, THE STATE TAX OFFICER - 2023 (1) TMI 1131 - JHARKHAND HIGH COURT"

A show cause notice under Section 73(1) of the Act dated 12.02.2022  was issued to the petitioner which was issued in a format without striking out the irrelevant particulars and thus, there won’t be an exaggeration in treating the same as vague as it does not spell out the contraventions for which the petitioner is charged.

As a matter of fact, it is worse than the summary of show cause notice issued under FORM GST DRC-01 of the even date. It further transpires that without giving any opportunity of hearing, State Tax Officer finally issued summary of order in FORM GST DRC-07 on 17.02.2022. Its means that he was in so hurry and just within five days from issuance of show cause, he has issued summary of ordwer in FORM GST DRC-07.

Rule 142(1) (a) of the JGST Rules provides that the summary of show cause notice in Form DRC-01 should be issued “along with” the show cause notice under Section 73(1) which will spell out the contraventions in details for which the Assessee is charged. The word “along with” clearly indicates that in a given case show cause notice as well as summary thereof both have to be issued. As per Rule 142(1)(a) of the JGST Rules, the summary of show cause notice has to be issued electronically to keep track of the proceeding initiated against the registered person whereas a show cause notice need not necessarily be issued electronically.

This Court holds that the foundation of the proceeding in the instant case suffers from material irregularity and hence not sustainable being contrary to Section 73 (1) of the JGST Act. Thus, the subsequent proceedings/impugned orders issued under DRC-07 dated 17.02.2022 cannot sanctify the same and liable to be quashed and set aside.

At the cost of repetition, DRC-07 has been issued within five days of issuance of DRC-01 is a clear picture of violation of principles of natural justice.

The impugned show cause notice in the instant case does not fulfill the ingredients of a proper show cause notice and thus amounts to violation of principles of natural justice; the challenge is maintainable in exercise of writ jurisdiction of this Court - Application allowed.