TMI Blog2023 (2) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... d 03.10.2018 and finally two separate orders, both dated 14.05.2019, were passed. Subsequently, the petitioner also filed rectification application for both the period and fresh rectified orders were passed in respect of both these tax periods. Now the law is no more res-integra, inasmuch as, 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 74(1). 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 persona whereas a show cause notice need not necessarily be issued electronically. This Court in the case of M/S NKAS Services Pvt. Ltd. vs. State of Jharkhand Ors., [ 2021 (10) TMI 880 - JHARKHAND HIGH COURT] , has taken note of the said position of law and has categorically held that Summary of Show Cause Notice in Form DRC-01 is not a substitute of show cause notice under Section 74(1). Thus, the foundation of the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 2018 to June 2018 the summary of the show cause notice dated 12.09.2018 (Annexure-4) and the summary of the order contained in the GST DRC-07 dated 14th May, 2019 (Annexure-7) are under challenge on the same grounds. The proceedings against the petitioner in both the writ petitions were initiated on the basis of an inspection carried under Section 67 of the JGST Act for irregular availment of Input Tax Credit mainly on the ground that several consignment pertaining to invert supply as well as outward supply, were either shown to have been transported through vehicle bearing no registration number, or registration number bearing to car and 2 wheeler. Therefore they were in violation of Section 16(2)(b) of the JGST Act and CGST Act. Petitioner did submit a reply in DRC-06 in both the cases explaining that the ITC have been properly claimed and good have been physically received by them. However, rejecting their reply the impugned summary of the order dated 14th May, 2019 has been passed under Section 74 (9) of the JGST Act imposing the demand of tax, interest and penalty upon them. The rectification applications preferred by the petitioner before respondent No.2 under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued along with the show cause notice under Section 74(1). 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 persona whereas a show cause notice need not necessarily be issued electronically. 8. This Court in the case of M/S NKAS Services Pvt. Ltd. vs. State of Jharkhand Ors., passed in W.P.(T) No. 2444 of 2021 in which one of us (Aparesh Kumar Singh J.) was the member, has taken note of the said position of law and has categorically held that Summary of Show Cause Notice in Form DRC-01 is not a substitute of show cause notice under Section 74(1). The relevant portion of the judgment is set out below- 13. A bare perusal of the provision indicates that in a case where it appears to a proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts to evade tax, he sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeding is meant to give the person proceeded against a reasonable opportunity of making his objection against the proposed charges indicated in the notice. 25.Expressions like a reasonable opportunity of making objection or a reasonable opportunity of defence have come up for consideration before this Court in the context of several statutes. A Constitution Bench of this Court in Khem Chand v. Union of India, of course in the context of service jurisprudence, reiterated certain principles which are applicable in the present case also. 26.S.R. Das, C.J. speaking for the unanimous Constitution Bench in Khem Chand held that the concept of reasonable opportunity includes various safeguards and one of them, in the words of the learned Chief Justice, is: (a) An opportunity to deny his guilt and establish his innocence, which he can only do if he is told what the charges levelled against him are and the allegations on which such charges are based; 27. It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 18. Since we are of the considered view that the impugned show cause notice as contained in Annexure-1 does not fulfill the ingredients of a proper show-cause notice and thus amounts to violation of principles of natural justice, the challenge is entertainable in exercise of writ jurisdiction of this Court. Accordingly, the impugned notice at Annexure- 1 and the summary of show-cause notice at Annexure- 2 in Form GST DRC-01 are quashed. However, since this Court has not gone into the merits of the challenge, respondents are at liberty to initiate fresh proceedings from the same stage in accordance with law within a period of four weeks from today. 9. In view of the aforesaid facts and the settled preposition of law, the foundation of the proceeding in both the cases suffers from m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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