In WRIT TAX No.139 of 2023-ALL HC- If notice under Rule 142(1A) of CGST Rules in Part A of FORM GST DRC-01A providing details of penalties & tax was not issued, then any subsequent reminder will not cure inherent defect in proceedings initiated against assessee: Allahabad HC 
Justices Rajesh Bindal & J.J. Munir [09-02-2023]

Read Order: M/s Tanishka International Vs. State Of U.P. And Others 

Tulip Kanth

Prayagraj, February 14, 2023: The Allahabad High Court has come to the aid of an assessee by quashing the Order passed under Section 74(9) of the Central Goods and Service Tax Act, 2017 as a notice as provided for under Rule 142(1A) of the CGST Rules in Part A of FORM GST DRC-01A, was not issued.

The petitioners had approached the Division Bench of Chief Justice Rajesh Bindal and Justice J.J. Munir challenging the order passed by the second respondent under Section 74(9) of the Central Goods and Service Tax Act, 2017.

It was the petitioner’s case that in terms of the provisions of Rule 142(1A) of the Central Goods and Service Tax Rules, 2017 as existing at the time of initiation of the proceedings against the petitioner before it was amended on October 15, 2020, before passing any order under Section 74 of the Act, a show cause notice in Part A of FORM GST DRC-01A has to be issued. 

As per the petitioner, it is only thereafter that the jurisdiction is vested with the Competent Authority to pass order. It was also argued that notice in Part A of FORM GST DRC-01A having not been issued, any subsequent proceeding will be without jurisdiction as the petitioner did not have fair opportunity to respond.

From the respondent’s side it was contended that subsequent reminders as well as opportunity of hearing to the petitioner to place his case before the authority concerned was given which he failed to avail of and the impugned order now passed was appealable under Section 107 of the Act.

The Bench observed that present writ petition deserved to be allowed and noted, “...admittedly for initiation of proceedings against the petitioner a notice as provided for under Rule 142(1A) of the Rules in Part A of FORM GST DRC-01A was not issued, which provided for communication of details of any tax, interest and penalties as ascertained by the officer. Any subsequent reminder will not cure inherent defect in proceedings initiated against the petitioner.”

The Bench also referred to the judgments of the Delhi High Court in Gulati Enterprises v. Central Board of Indirect Taxes and Customs & others, and Allahabad High Court in M/s Skyline Automation Industries v. State of U.P. and another wherein also in identical facts pertaining to a case prior to the amendment of Rule 142(1A) of the Rules with effect from October 15, 2020, the impugned show cause notice was set aside and the matter was remitted back to concerned authority to initiate fresh proceedings in accordance with law.

Thus, allowing the writ petition, the Bench quashed the impugned order and also gave liberty to the respondents to initiate fresh proceedings against the petitioner.