In violation of Rule 142(1)(a) of the GST Rules, the Jharkhand High Court division bench has quashed the order in the summary of GST show cause notice without issuing show cause notice pursuant to Section 74(1).
As the portion of the search performed via the respondents on the premises of the petitioner, M/s. Juhi Industries Pvt. Ltd. beneath Section 67 of the JGST Act two summary of show-cause notices in Form DRC-01 were given, one for the period from 01.07.2017 to 13.8.2018 and another for the period from April 2018 to 31.8.2018 under Section 74(1) of the JGST Act.
The applicant beneath the bonafide and mistaken belief of the law furnished its answer in Form DRC-06 specifying the GST Input tax credit that he has claimed legally and the goods would be obtained through them. The respondent has passed two separate orders both beneath section 74(9) of the JGST Act and confirmed tax demand, interest, and penalty, and issued a Summary of Order. The aggrieved taxpayer liked a writ petition to the jurisdictional High.
The counsel towards the applicant submitted that Rule 142(1)(a) of the JGST rules furnished that the summary of the show cause notice in Form DRC-01 must be given engaging a show-cause notice beneath section 74(1) which is essential and mandatory. The whole proceeding in both the cases is without any jurisdiction and the next proceedings would not be sustainable being the opposite of GST section 74(1) of the JGST act.
The tribunal sees that the foundation of the proceeding in both cases suffers from material anomaly therefore not sustainable being contrary to Section 74(1) of the JGST Act; therefore the next proceedings/impugned Orders cannot sanctify that. The Tribunal sees that the bonafide issue or the taxpayer’s permission shall not provide any jurisdiction on the proper officer. The jurisdiction should flow through the law. The rule of the estoppels is the direction of equity who would pose no part in taxation cases of taxation.
Mr Justice Aparesh Kumar Singh and Mr Justice Deepak Roshan considered in the Coram have refused the impugned the show cause notice and the final order ruled that “we are of the considered view that the impugned show cause notice in both the cases does not fulfil the ingredients of a proper show-cause notice and thus amounts to a violation of principles of natural justice, the challenge is maintainable in the exercise of writ jurisdiction of this Court”.
