raise demand on assesee contrary
Case Title | Om Prakash Store Vs The State of Jharkhand |
Court | Jharkhand High Court |
Honorable Judges | Justice Aparesh Kumar Singh and Justice Deepak Roshan |
Citation | 2022 (8) GSTPanacea 157 HC Jharkhand W.P. (T) No 1526 & 1527 of 2022. |
Judgement Date | 18-August-2022 |
Council for Petitioner | Mr Sumeet Gadodia Mr Shilpi Sandil Gadodia |
Council for Respondents | Mr P.A.S.Pati |
The Jharkhand High Court bench of Justice Aparesh Kumar Singh and Justice Anubha Rawat Choudhary held that authority can’t demand for any amount of tax, interest, penalty, etc arbitrarily without compliance of statutory provisions of the GST Act and principle of natural justice.
FACTS OF THE CASE
Petitioners is a registered dealer running business of trading in jaggery, mahua and kirana goods. An inspection was carried out in the premises of petitioner on the ground of mis-match in GSTR-2A and GSTR-3B for the period from 2017-18 and April 2018 to June 2019. An inspection report was prepared and pursuant to inspection respondent authorities directed petitioner u/s 70(1) of JGST Act to appear and produce relevant books of accounts on 05.10.2018 and also on 03.04.2019. Representative of petitioner duly appeared and participated in the enquiry proceeding by producing relevant documents on both the instances.
In continuation to summary summons show cause notices were issued in form GST DRC-01 on dated 15.05.2019 [ in W.P. (T) No 1527 of 2022] and 16.05.2019 [W.P. (T) No 1526 of 2022]. Pursuant to GST DRC-01 straightway adjudication order u/s 73(1) was issued on 18.09.2019 in GST DRC-07 without issuing show cause notice and notice of personal hearing, thereby overruling the principle of natural justice.
Suddenly bankers of the petitioner were served a notice on 08.09.2021 in form GST DRC-13 (i.e. notice to third party). Demand for said amount was in respect of petitioner’s dues towards summary judgement issued on 18.09.2019 in form GST DRC-07. Petitioner filed an appeal through a writ petition against the summary judgement order and deposited amount of 10% of alleged tax dues in pursuant to order dated 28.04.2022 as directed for stay on the notices of demand.
Counsel of petitioner contended that section 16(2) of GST Act does not stipulates that dealer will be entitled to claim ITC in its GSTR-3B return only to the extent it is reflected in GSTR-2A statement. He submitted that in press release dated 18.10.2018 issued by GST council its clarified that “furnishing of outward details in form GSTR-1 by the corresponding supplier(s) and the facility to view the same in form no GSTR-2A by the recipient is in the nature of taxpayer facilitation and does not impact the ability of the taxpayer to avail ITC on self-assessment basis”.
Counsel of petitioner relied on the judgement delivered in the case of M/s NKAS services Pvt. Ltd. Vs The state of Jharkhand & Ors in W.P.(T) No. 2444 of 2021 where the Hon Court emphasised on serving of proper show cause notice to the assesee which should not be contrary, vague, lack details and/or unintelligible. It reiterated that specific ingredients of allegations enumerated thereunder have to be clearly asserted in the notice so as to grant opportunity to assesee to explain and defend himself.
raise demand on assesee contrary
COURT HELD
Considering the facts as recorded, court held that statutory requirements enshrined under section 73 & 75 of JGST Act and also principle of natural justice were not followed. Hon. Court held that impugned adjudication orders in both the writ petitions were not in accordance with the procedure prescribed in law and quashed and set aside on the ground of non-compliance of statutory provisions of the JGST Act. The matter was remitted back to the adjudicating authority for fresh SCN and fresh adjudication order.
The court maintained that 10% deposit of tax amount may be adjusted from future tax liability or the assesee may file claim for refund if fresh adjudication order is not against him.
raise demand on assesee contrary
ANALYSIS OF THE JUDGEMENT
Petitioner has the right to defend himself if allegations in the show cause notice is specific and opportunity for say is granted to him. Adjudicating authority can’t demand for any amount of tax, interest, penalty, etc. arbitrarily without compliance of statutory provisions of the GST Act and principle of natural justice.
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