In Writ Tax No. - 753 of 2023 -ALL HC- Allahabad High Court dismisses objection on Form GST DRC01 as hyper technical; Grants one-month time to petitioner to file reply in response to SCN
Justice Saumitra Dayal Singh & Justice Rajendra Kumar [31-05-2023]

Read Order: Elesh Agrawal v. Union of India and Others

Chahat Varma

New Delhi, June 13, 2023: Dismissing the objection raised by the Petitioner as hyper technical, the Allahabad High Court has ruled that although revenue authorities should adhere to issuing preliminary notices in the prescribed form GST DRC-01A and provide a reasonable opportunity of hearing in adjudication proceedings, the objection raised in the said case regarding the issuance of Form GST DRC01 was not substantial.

The present petition had been filed to challenge the demand cum notice, issued on Form GST DRC-01 read with Rule 142 (1) of Central Goods and Services Tax Act, 2017 (CGST Act).

The petitioner's counsel argued that the present notice had been issued prematurely, before any regular show cause notice being issued in any adjudication proceedings. The counsel referred to Section 74(5) of the Act, stating that the revenue authorities were obligated to provide the petitioner with an opportunity to pay the alleged defaulted amount, along with penalties, on a self-assessed basis. If that amount were to be paid by the assessee, no adjudication proceeding may arise. It was contended that, clearly, that opportunity had been denied, in as much as, the show cause notice had been issued on Form GST DRC-01 and not Form GST DRC01A.  The other grievance of the petitioner was that above demand cum notice had not been uploaded on the GST portal and that no notice came to be served on the petitioner through electronic means. Thus, the proceedings were stated to be premature.

In response, the counsel for the revenue argued that despite the discrepancy in form description, the impugned notice was not defective. The petitioner had disputed the entire tax liability and did not express any intention to pay the defaulted amount voluntarily. Therefore, the counsel contended that adjudication proceedings were necessary in this case. It was asserted that the alleged discrepancy in issuing the show cause notice on Form GST DRC-01 instead of Form GST DRC-01A had not caused any real prejudice to the petitioner.

The court held that there were no valid grounds to intervene on the merits of the case through the exercise of extraordinary jurisdiction under Article 226 of the Constitution of India. Therefore, the prayer made in the writ petition was declined.

However, to ensure that the interest of justice was met, the court granted the petitioner one month's time to file a reply to the show cause notice.

In the meanwhile, the court directed the revenue authorities to ensure that all necessary documents required to be uploaded on the GST portal and communicated to the petitioner electronically were completed within 48 hours. Additionally, the revenue authorities were instructed to maintain communication channels for all pending proceedings, ensuring that they are conducted and concluded in accordance with the law.