These proceedings were initiated allegedly on account of a mismatch in GSTR-3B and GSTR-2A for the period in question and that the petitioners have taken undue ITC to which they were not entitled.

Petitioner has challenged the show-cause notice does not strike out the relevant particulars and does not even enumerate the contravention which the petitioners have been called upon to reply and also challenged that the Order imposes 100% penalty which is impermissible under the provisions of Section 73(9) of the Act of 2017. 100% penalty can only be levied in proceeding under section 74 (9) of the Act of 2017.

The Respondent plead that GSTN provides for standard format in which only notices can be issued upon the assesse. The Deputy Commissioner of State Tax, Godda Circle, Godda has therefore followed the procedure by mentioning the violations and charges on the petitioner i.e. difference between GSTR-3B and 2A. The show-cause notices and Summary of the show-cause notices clearly mentions the charge i.e. difference between GSTR-3B and 2A. A plea has also been taken that entries in GSTR-2A, which are auto populated figure of inward supply for the taxpayer in the online GSTN portal, is dynamic in nature and changes upon filing of GSTR-1 by the suppliers/taxpayer. Thus, after filing of GSTR-1 by the suppliers, any changes made in the figures in GSTR-2A by the taxpayers was never brought to the notice of the Department either during adjudication stage or until filing of the writ petition. Therefore, because of late filing of GSTR-1 by the suppliers, interest under section 50 of the Act of 2017 is required to be levied to prevent loss of revenue to the State Exchequer.

In a notice under Section 74 of the JGST Act, the necessary ingredients relating to fraud or willful misstatement of suppression of fact to evade tax have to be impleaded whereas in a notice under Section 73 of the same act the Revenue has to specifically allege the violations or contraventions, which has led to tax not being paid or short paid or erroneously refunded or Input Tax Credit wrongly availed or utilized. It is trite law that unless the foundation of a case is laid down in a show cause notice, the assesse would be precluded from defending the charges in a vague show cause notice. That would entail violation of principles of natural justice. He can only do so, if he is told as to what the charges levelled against him are and the allegations on which such charges are based.

Further, there was no specific denial by the respondent of the plea taken by the petitioners that no penalty of 100% of the tax dues can be levied in a proceeding under section 73(1) in terms of section 73(9) of the Act, 2017.