Dated: 05 September 2022

Facts

• The Petitioner, M/s. OM SAI RAM ENTERPRISES, was inspected in terms of Section 67 of Jharkhand Goods and Service Tax Act, 2017 and in the inspection report it was observed that the petitioner has claimed excess ITC and has made certain claims of ITC without actual receipt of goods. 
• After a lapse of five months, petitioner was issued summon, petitioner appeared before the respondent-Authorities and produced all requisite documents and subsequent to that petitioner was issued intimation of liability under Section 74 (5) of the Act dated 25.02.2020, DRC-01 being intimation of tax and also summary of statement, all dated 25.02.2020 by the respondent.
• Subsequently, adjudication order was passed under Section 74(9) dated 06.07.2020. Consequently, two separate demand notice in form of summary orders contained in form GST DRC-07 for the Financial Year 2017-18 and 2018-19 have been issued.
• The specific grievance of the petitioner is that the adjudication order and consequential demand notice has been passed/issued against the petitioner without granting any opportunity of hearing and in utter violation of the mandate of Section 74 of JGST Act.

Issue:

• Order passed without granting an opportunity of being heard is valid?

Order

• The High Court observed that on 25.02.2020 DRC-01A (intimation of tax) DRC-02 (Summary of Statement) and intimation of liability under Section 74 (5) of the Act was issued on the same date i.e. 25.02.2020, thereafter, on 04.06.2020 summary of show cause notice in the form of DRC-01 along with show cause notice was issued, fixing the date as 03.07.2020 for filing reply and thereafter, without giving any opportunity of hearing and without fixing any date for hearing adjudication order has been passed on 06.07.2020.
• Relying on the case of NKAS Service Pvt. Ltd. reported in 2021-VIL-732-Jhar and Godavari Commodities Ltd. it was held that there lies the lacuna committed by the respondents in non-compliance of the statutory provisions of the JGST Act.
• Thus, it was held that prior to passing of adjudication order, no notice of personal hearing as required under Section 75 (4) and 75 (5) was given to the petitioner which is against the provision of law.
• Consequentially, adjudication order dated 15.09.2020 is quashed and set aside and the matter is remitted back to the to issue a fresh notice for personal hearing.