TMI Blog2021 (10) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. This would entail violation of principles of natural justice which is a well-recognized exception for invocation of writ jurisdiction despite availability of alternative remedy. The impugned notice completely lacks in fulfilling the ingredients of a proper show-cause notice under Section 74 of the Act. Proceedings under Section 74 of the Act have to be preceded by a proper show-cause notice. A summary of show-cause notice as issued in Form GST DRC-01 in terms of Rule 142(1) of the JGST Rules, 2017 (Annexure-2 impugned herein) cannot substitute the requirement of a proper show-cause notice. This court, however, is not inclined to be drawn into the issue whether the requirement of issuance of Form GST ASMT-10 is a condition precedent for invocation of Section 73 or 74 of the JGST Act for the purposes of deciding the instant case. This Court finds that upon perusal of Annexure-2 which is the statutory form GST DRC-01 issued to the petitioner, although it has been mentioned that there is mismatch between GSTR-3B and 2A, but that is not sufficient as the foundational allegation for issuance of notice under Section 74 is totally missing and the notice continues to be vague. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice contained in Form DRC-01, it is submitted that what is not alleged in the show-cause notice under Section 74 cannot be part of such summary of show-cause notice. As per Section 73(1)/74(1) the requirement is of notice and not knowledge . Section 75(7) of the Act contemplates that no demand shall be confirmed on the grounds other than the grounds specified in the notice. Petitioner relies upon the decision of the Apex Court rendered in the case of CCE Vs. Shital International reported in (2011) 1 SCC 109 (Para-19). It is submitted that the expression used in Section 73/74 requires proper application of mind by the proper officer. The expression appears to the proper officer has not to be a casual act but should show full application of mind by the proper officer . Reliance is placed upon the decision of the Apex Court rendered in the case of Dilip N. Shroff Vs. CIT reported in (2007) 6 SCC 329 (Para-86). It is further submitted that the CBEC Master Circular No.1053/2/2017-CX dated 10.03.2017 issued in exercise of powers under Section 37B of the Central Excise Act, 1944/Section 83 of the erstwhile Chapter V of the Finance Act, 1994 detailing guidelines for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the impugned show-cause notice being vague and not disclosing the offences/contravention denies the petitioner of any opportunity to properly defend itself and is therefore clearly in violation of principles of natural justice. Reliance is placed upon the decision of Oryx Fisheries P. Ltd. (supra) and also on the decision of CIT Vs. Chhabil Dass Agarwal reported in (2014) 1 SCC 603 para 15 . It is submitted that the period of dispute under the impugned show-cause notice is between July 2020 to September 2020. During the said period the petitioner regularly filed their monthly returns of outward supplies in Form GSTR-1 under Section 38 read with Rule 59, monthly return of self-assessment in form GSTR-3B under Section 39 read with Section 59 and Rule 61(5). Annual return/reconciliation statement was also filed in form GSTR-9/GSTR-9C under Section 44 read with Rule 80. Petitioner discharged payment of tax on its outward supplies in accordance with Section 49 of the Act. It is submitted that the proceedings in the instant case were initiated straight away under Section 74 of the Act by serving the impugned show-cause notice on 07.06.2021 along with the summary of show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 para-17 . Learned counsel for the respondents has emphatically opposed the contention of the petitioner that service of GST ASMT-10 is a precondition for issuance of notice under Section 73/74 of the Act. The word may has been used in Section 61. The language of Section 73/74 also does not suggest that a preliminary determination is to be done prior to issuance of notice. He submitted that in case there is a genuine error in striking out a particular item, the same would not lead to a conclusion that a notice itself is to be quashed. On the question of reliance of the petitioner upon the Master Circular dated 10th March 2017 issued by the CBEC, it is submitted that it only provides a guideline and cannot be said to have a binding force in law. Lastly it has been submitted on the part of the State that in case this Court feels inclined to interfere in the impugned show-cause notice, liberty may be granted to the respondents to proceed afresh in accordance with law from the same stage of the proceedings. 9. Learned counsel for the petitioner in reply submits that the show-cause notice was issued well within the statutory period of limitation. 10. We have considered the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Venue where personal hearing will be held NA Demand details- (Amount in Rs.) Sr. No. Tax Rate (%) Turnover Tax Period From To Act POS (Place of supply Tax Interest Penalty Others Total 1 2 3 4 5 6 7 8 9 10 11 12 1 0 0.00 Jul 2020 Sep 2020 CGST NA 1,63,17,267.50 17,13,313.08 1,63,17,267.50 0.00 3,43,47,848.08 2 0 0.00 Jul 2020 Sep 2020 SGST NA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery , the ingredients of Section 74 of the Act require either of the following ingredients to be satisfied for proceeding thereunder i.e. that the tax in question has not been paid or short paid or erroneously refunded or the ITC has been wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts to evade tax. 14. A bare perusal of the impugned show-case notice creates a clear impression that it is a notice issued in a format without even striking out any irrelevant portions and without stating the contraventions committed by the petitioner i.e. whether its actuated by reason of fraud or any willful misstatement or suppression of facts in order to evade tax. Needless to say that the proceedings under Section 74 have a serious connotation as they allege punitive consequences on account of fraud or any willful misstatement or suppression of facts employed by the person chargeable with tax. In absence of clear charges which the person so alleged is required to answer, the noticee is bound to be denied proper opportunity to defend itself. This would entail violation of principles of natural justice which is a well-recognized exception for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deny his guilt and establish his innocence, which he can only do if he is told what the charges leveled against him are and the allegations on which such charges are based. 16. It is also true that acts of fraud or suppression are to be specifically pleaded so that it is clear and explicit to the noticee to reply thereto effectively [ See Larsen Toubro Ltd. Vs. CCE, (2007) 9 SCC 617 (para 14 )]. Further in the case of CCE Vs. Brindavan Beverages (P) Ltd. reported in (2007) 5 SCC 388 relied upon by the petitioner, the Apex Court at para-14 of the judgment has held that if the allegations in the show-cause notice are not specific and are on the contrary, vague, lack details and/or unintelligible i.e. its sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show-cause notice. We do not agree with the contention of the respondent that the notice ought not to be struck down if in substance it contains the matters which a notice must contain. In order to proceed under the provisions of Section 74 of the Act, the specific ingredients enumerated thereunder have to be clearly asserted in the notice so that the noticee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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