GST
TRT-2025-
High Court Jharkhand
Date:-27-06-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order date – 27 June 2022
Facts –
- The Petitioner, M/S Juhi Industries Pvt. Ltd., was being searched under Section 67 of the JGST Act for irregular claim of input tax credit mainly on the ground that the petitioner has claimed input tax credit without making payment of value and tax of the inputs to the supplier within six months which is in contravention of Section 16(2) of the JGST Act.
- The petitioner submits that the proceeding in both the cases started with issuance of summary show-cause notices dated 14.9.2018 u/s 74(1) of JGST Act, 2017. The petitioner under bona-fide and mistaken belief of law, submitted its concise reply in Form DRC-06 explaining that the ITC have been legally claimed by them and the goods have been physically received by them.
- The tax demand along with interest and penalty had been imposed on them.
- Revenue submitted that notice under Section 74(1) of JGST Act, 2017 i.e. summary of the show-cause notice in Form GST DRC-01 along with the gist of accusation was issued to the petitioner. Thereafter, petitioner furnished reply in Form GST DRC-06, which establishes the very fact that proper adjudication process was followed before passing of the impugned order in the both the writ applications.
- Aggrieved the Petition filed a writ petition.
Issue –
- Whether issuance of summary SCN does not fulfill the ingredients of a proper show cause notice?
Order –
- The Court observed that in view of the settled preposition of law, the foundation of the proceedings suffers from material irregularity and hence not sustainable being contrary to Section 74(1) of the JGST Act. Thus, the impugned Orders cannot sanctify the same.
- The Court further observed that a bonafide mistake or consent by the assesse cannot confer any jurisdiction upon the proper officer. The jurisdiction must flow from the statute itself. Court relied on the case of UOI Vs.Madhumilan Syntex Pvt.Ltd in which the Apex Court held that power under the statute cannot be taken away by consent of the parties.
- Therefore, impugned show cause notice does not fulfill the ingredients of a proper show cause notice and thus amounts to violation of principles of natural justice.
- Hence, the appeal was allowed and order was set aside.
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