Order Date – 23 March 2023 

Parties: Vikash Kumar Singh & Shashank Shekhar Jha Vs Commissioner of State Tax, State of Jharkhand and Deputy Commissioner of State Tax, Jharkhand Goods and Service Tax, Godda & Dumka, Godda. 

Facts – 

• The Petitioners, Vikash Kumar Singh and Shashank Shekhar Jha were issued with a show cause notice which does not strike out the relevant particulars and does not even enumerate the contravention which the petitioners have been called upon to reply. 
• Summary of the Order contained in Form GST DRC 07 imposes 100% penalty. 

Issue – 

• Whether the Show cause notices are valid? Whether the imposition of 100% penalty is admissible under the provisions of Section 73(9) of the Act of 2017? 

Order – 

• The Divisional Bench of Hon’ble High Court observed that out that notices under section 73(1) of the Act of 2017 are in the standard format and neither any particulars have been struck off, nor specific contravention have been indicated to enable the petitioners to furnish a proper reply to defend themselves. The show cause notices can, therefore, be termed as vague.  
• This Court has, in the case of M/s NKAS SERVICES PRIVATE LIMITED categorically held that summary of show cause notice in Form GST DRC 01 cannot substitute the requirement of a proper show cause notice under section 73(1) of the Act of 2017.  
• Levy of penalty of 100% of tax dues reflected in the Summary of the Order contained in Form GST DRC 07 are also in the teeth of the provisions of Section 73(9) of the Act of 2017, wherein while passing an adjudication order, the Proper Officer can levy penalty up to 10% of tax dues only. It clearly shows non application of mind on the part of the revenue.  
• Proceedings also suffer from violation of principles of natural justice and the procedure prescribed under section 73 of the Act and are in teeth of the judgment rendered by this Court in the case M/s NKAS SERVICES PRIVATE LI MITED. 
• Thus it was held that impugned show cause notices and summary show cause notices and summary of orders are quashed. Respondents are liberty to initiate fresh proceedings.