Delhi HC Instructs Revenue Dept for Issuing GST SCN & Tax Demand in DRC 01 & DRC 02

The Delhi High Court, in the case of Sulender Shah v. Additional Commissioner/Joint Commissioner CGST [W.P.(C) NO. 15766 OF 2023 dated December 7, 2023], instructed the Revenue Department to electronically issue the summary of Show Cause Notice and Demand using Form GST DRC-01 & Form GST DRC-02.

This ruling emphasized that the summary of Demand and Notice, as per Section 74 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), must be electronically issued following Rule 142(1) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”).

Points:

The petitioner, Sulender Shah, lodged a writ petition aiming to annul the Show Cause Notice dated August 2, 2023 (referred to as “the Impugned Notice”) and to halt the Revenue Department from advancing with the adjudication proceedings related to the Impugned Notice while the writ petition is pending.

The petitioner argued that the matter addressed in this writ petition has already been addressed in the ruling of the Delhi High Court in the case of Shubham Gupta v. Additional Commissioner/Joint Commissioner CGST, and Anr. [W.P.(C) No. 12457/2023 dated September 21, 2023] where the same Show Cause Notice issued to the petitioner was considered.

Problem:

Under Section 74 of the CGST Act, the issued summary of the demand and the notice is whether needed to be provided electronically under rule 142(1) of the CGST rules.

Had:

The Hon’ble Delhi High Court in W.P.(C) NO. 15766 OF 2023 held as under

• Laid on the order passed by the Hon’ble Delhi High Court in the case of Shubham Gupta v. Additional Commissioner/Joint Commissioner CGST, and Anr. [W.P.(C) No. 12457/2023 dated September 21, 2023] in which it was seen that under rule 142(1) of the CGST Rules, any notice issued under Section 74 of the CGST Act, is to be accompanied by the summary which is generated electronically in Form GST DRC-01 and Form GST DRC-02. It was moreover seen that even if the summary is to be provided in the electronic form including with the show cause notice the providing of the summary in the current step at the time of the pendency of the adjudication proceedings shall be of enough compliance.
• The proper officer must promptly issue the summary of the challenged notice and demand electronically using Form GST DRC-01 & Form GST DRC-02, aiming for swift delivery, ideally within a week.

Appropriate Provisions Under CGST Rule 142(1)

“142. Notice and order for the demand of amounts payable under the Act.- (1) The proper officer shall serve, along with the (a) notice issued under Section 52 or Section 73 or section 74 or section 76 or Section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC-01, (b) a statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02, specifying therein the details of the amount payable…..”