Petitioner | V.R.S. Traders |
Respondent | Assistant Commissioner (State Taxes) |
Decision By | Madras High Court |
Date Of Order Or Judgement | 10-February-2022 |
Citation No. | 2022 (2) GSTPanacea 70 HC Madras Writ Petition Nos.1607, 1609 and 1613 of 2022 |
Honorable Judge | Justice R. Suresh Kumar |
Decision | Matter Remanded |
DRC-01 is an Independent Notice to Be Issued under Section 74(1), whereas the notice under Section 74(5) to be issued in DRC- 01A.
DRC-01 is an Independent Notice-Facts of the Case
DRC-01 is an Independent Notice-The petitioner is a sole proprietary concern, they engaged in the business of iron and steel scrap.
As per the investigation of the Department concerned, a communication in Form No. DRC-01A dated 15.10.2020 was issued to the petitioner alleging that some of the suppliers, who have supplied iron and steel scrap to the petitioner were either non-existent or were not conducting any business therefore, the petitioner had wrongly availed Input Tax Credit i.e., ITC during the period 2017- 2018 to 2019-2020, on such purchase of an amount of Rs.3,60,02,382.
The said notice has been replied by the petitioner on 19.10.2020, not accepting the said proposal issued under the notice in DRC-01A.
Thereafter the respondent Revenue has passed the order dated 05.08.2021 under Section 75(1) of the Act, whereby, an assessment has been made, where not only ITC reversal under Section 74 of the Act, but also the penalty under Section 74(5) of the Act has been made.
Argument Before Court
DRC-01 is an Independent Notice-Petitioner’s Contention
The petitioner has raised the query “whether any notice under Section 74(1) of the Act was issued before passing the impugned order”
DRC-01 is an Independent Notice-Respondent’s Argument
The respondent submit that, except the notice i.e., DRC-01A, no further notice i.e., DRC-01 under Section 74(1) was issued.
Madras High Court Held
DRC-01 is an Independent Notice-A Section 74(1) notice is an independent notice to be issued in DRC-01, whereas the notice under Section 74(5) was to be issued in DRC- 01A. Herein the case in hand, admittedly DRC-01A was issued, thereafter straightaway the respondent revenue proceeded to pass the impugned assessment order.
The DRC-01 notice under Section 74(1) of the Act, which is also mandatory to be issued before passing the impugned order of assessment has not been issued in this case. In the absence of any such notice, the proceedings, which is culminated in the order of assessment, which is impugned herein, is, no doubt, vitiated.
Therefore, this Court has no hesitation to hold that the impugned order cannot stand in the legal scrutiny and in that view of the matter, these writ petitions are disposed of with the following orders:
“The respective impugned orders in these writ petitions are hereby quashed. All these three matters are remitted back to the respondent for re-consideration. While re-considering the same, they shall commence the proceedings from where, it has already been stopped i.e., till DRC-01A notice, which means, they should issue DRC-01 notice to the petitioner and thereafter after giving a fair opportunity of being heard to the petitioner, necessary orders shall be passed with regard to the assessment, if any.”
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