proper officer been issued
Case Title | Agrometal Vendibles Private Limited vs State of Gujarat |
Court | Gujarat High Court |
Honorable Judges | Justice J.B.Pardiwala & Justice Nisha M.Thakore |
Citation | 2022 (4) GSTPanacea 312 HC Gujarat C/SCA/6919/2022 |
Judgement Date | 07-April-2022 |
Council for Petitioner | Dimple K Gohil |
Council for Respondent | Utkarsh Sharma |
Section | Section 74 of the Act 2017 |
In Favour of | In Favour of Assesses |
The Gujarat High Court bench of Justice J.B.Pardiwala & Justice Nisha M.Thakore has held that the intention of the proper officer was to give an intimation in accordance with sub-section (5) of Section 74 and therefore, the intimation should have been in the Form GST DRC – 01A and not Form GST DRC – 01. There is a vast difference between Rule 142(1)(a) and Rule 142 (1A) of the Rules. There is a vast difference between Rule 142(1)(a) and Rule 142 (1A) of the Rules. For the foregoing reasons, the impugned intimation of tax in the Form GST DRC – 01 is hereby quashed and set aside.
FACTS OF THE CASE
The writ applicant has received an intimation of the tax ascertained as being payable under Section 74(1) and (5) resply of the GST Act, 2017 in the Form GST DRC – 01 dated 14th March 2022
The writ applicant had to come before this Court because the contents of the intimation are incorrect. The writ applicant has expressed apprehension that if he would not comply with the intimation, then the department may proceed to recover the entire amount
The principal argument of Ms. Gohil is that although the impugned notice is in the form of an intimation, yet it is as good as a final order passed by the Assistant State Tax Commissioner, Ghatak – 3, Ahmedabad. Ms. Gohil would submit that her client has been asked to make the payment within a period of fifteen days in accordance with theprovisions of Section 74(8) of the Act, 2017 by uploading the DRC – 03. Ms. Gohil further submitted that the writ applicant has also been informed or made to understand that if he fails to make the payment in DRC – 03, then the amount of Rs.34,88,26,406/-, as determined towards tax, shall be recovered with interest and penalty. According to Ms. Gohil, if in response to the intimation given by the department to the dealer, the dealer fails to make good the payment, then the next step in the process would be to issue a show cause notice, and thereby, give an opportunity of hearing to the dealer. Thereafter, the final assessment order would be passed fixing the liability of the dealer.
Ms. Gohil prays that there being merit in her writ application, the same be allowed and the impugned intimation in Form GST DRC – 01 be quashed and set aside
proper officer been issued
COURT HELD
Considering the facts as recorded, held that the intimation under sub-section (5) has to be strictly in Form GST DRC – 01A. It is not a show cause notice. In the intimation, the dealer should be informed that if he fails to make the payment, the next step in the process will be issue of a show cause notice under sub-section (1) of Section 74 in accordance with the Form GST DRC – 01.
At the cost of repetition, once there is a show cause notice in the Form GST DRC – 01 in accordance with Rule 142(1)(a) of the Rules to be read with sub-section (1) of Section 74, the same would ultimately lead to regular assessment proceedings with final assessment order.
Therefore, the department needs to correct itself not only as regards their understanding of the entire procedure, but even the contents of the Forms are incorrect. The intention of the proper officer was to give an intimation in accordance with sub-section (5) of Section 74 and therefore, the intimation should have been in the Form GST DRC – 01A and not Form GST DRC – 01. There is a vast difference between Rule 142(1)(a) and Rule 142 (1A) of the Rules. Therefore, from now onwards, if the department deems fit to issue any intimation of tax ascertained as being payable under sub-section (5) of Section 74 in accordance with the Rule 142(1A) of the Rules, it shall issue notice in the Form GST DRC – 01A.
For the foregoing reasons, the impugned intimation of tax in the Form GST DRC – 01 is hereby quashed and set aside. We dispose of this writ application with a clarification that if the proper officer wants to undertake a fresh exercise, he may do so in accordance with law.
proper officer been issued
ANALYSIS OF THE JUDGEMENT
Preliminary objection as regards the very maintainability of the present writ application on the ground that the writ applicant could not have questioned the legality and validity of the intimation issued by the proper officer in Form GST DRC – 01.
The blunder committed by the department is at this stage.
On one hand, the notice is termed as an intimation of tax ascertained as being payable under sub-section (5) of Section 74. Whereas, the intimation is issued in Form GST DRC – 01. The Form GST DRC – 01 is in the form of a show cause notice, which is issued under sub-section (1) of Section 74 of the Act i.e. in accordance with Rule 142(1)(a) of the Rules, 2017.
At the stage of an intimation under sub-section (5) of Section 74 in the Form GST DRC – 01A, it is Rule 142(1A) which is applicable. Therefore, while issuing an intimation, the proper officer in the notice could not have said that failure on the part of the notice may entail the consequence of recovery of the entire amount with penalty and interest.
In such a notice of intimation, the proper officer shall not threaten the dealer that if he would fail to comply with the intimation, the department shall proceed to recover the tax. The proper officer should inform the dealer that if he would pay the tax, well and good, otherwise the department shall proceed to issue a show cause notice under sub-section (1) of Section 74 in accordance with Rule 142(1)(a) of the Rules, 2017 in Form GST DRC – 01 and carry out regular assessment proceedings.
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Agrometal Vendibles Private Limited
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