The case revolves around a dispute concerning a demand made by the authorities under section 79(1)(c) of the Act, requiring the petitioner to pay a sum of Rs. 24,47,660.71/- from their bank account to discharge a liability. This demand was communicated to the petitioner through a letter from the Branch head of UCO Bank, Gamaria Branch, dated 10.02.2021, stating that the amount was due as state GST and requesting the petitioner to deposit it so that it could be remitted to the Deputy Commissioner of State Tax, Adityapur.
The petitioner argues that they were never served with a mandatory Show Cause Notice under Section 73(1) of the Jharkhand Goods and Services Tax Act, 2017. Instead, they received only a “Summary of Show Cause Notice” under Rule 142(1) of the Jharkhand Goods and Services Tax Rules, 2017. Additionally, the petitioner refers to a circular dated 23.02.2021 issued by the Ministry of Finance, Department of Revenue, which provided guidelines for provisional attachment of property under Section 83 of the CGST Act, 2017. According to this circular, every provisional attachment was supposed to cease to have effect after one year from the date of provisional attachment.
The petitioner’s counsel, Mr. Nitian Pasari, assisted by Ms. Sidhi Jalan, Advocate, contends that the demand and subsequent actions by the authorities lack proper legal procedure. They argue that the absence of a formal Show Cause Notice deprives the petitioner of their right to respond adequately to the allegations against them. Moreover, they assert that the provisional attachment of property should no longer be valid as per the circular issued by the Ministry of Finance.
In summary, the petitioner challenges the demand made by the authorities, citing procedural irregularities and arguing that the provisional attachment of their property should be lifted based on the expiry of the stipulated period as per the relevant circular.
Jharkhand Goods and Services Tax Act, 2017 outlines the procedure for adjudication of cases where the tax liability is fastened upon the assessee. The petitioner in this case contended that according to Section 73(1) of the Act, the jurisdictional authority must serve a show cause notice specifying the charges and material relied upon, requiring the assessee to explain why they should not pay the proposed tax, interest, and penalty. Additionally, Rule 142(1) of the Jharkhand Goods and Services Tax Rules, 2017 mandates the service of a summary of the show cause notice along with the notice itself.
Furthermore, the petitioner argued that the show cause notice is jurisdictional, and the designation of a “proper officer” under Section 2(91) of the Act/Rules is contingent upon the service of the show cause notice. Without proper service of the notice, the officer does not acquire jurisdiction over the registered person.
However, the respondent failed to serve the mandatory show cause notice upon the petitioner, failing to specify the charges or provide the adverse material intended to be used against them, as required by Section 73(1) of the Act.
Moreover, the petitioner referenced Section 73(9) read with Section 75 of the Jharkhand Goods and Services Tax Act, 2017, which likely pertains to the provisions regarding the demand and recovery of unpaid taxes, interest, or penalty.
In summary, the petitioner argued that the liability for taxes, interest, and penalty cannot be fastened upon them without proper adherence to the procedural requirements outlined in the Act and Rules, including the service of a show cause notice specifying charges and providing necessary material.
