Order Date – 10 May 2023

Parties: M/s Durge Metals Vs Appellate Authority and Join Commissioner State Tax and Assistant Commissioner State Tax

Facts –

• The Petitioner, M/s Durge Metals, was issued with a show cause notice dated 28.03.2019 under Section 74(1) of CGST Act. 
• The Petitioner challenges the show cause notice as it does not satisfy the requirements of the Section 74(1) of GST Act r/w Rule 142 of GST Rules.

Issue – 

• Whether the show cause notice is in order?

Order – 

• The Divisional Bench of Hon’ble High Court observed that it is true that the petitioner has not specifically raised the said ground before the appellate authority but the fact remains that mandatory provisions of Section 74 of CGST Act make it incumbent upon the Revenue to ensure the show cause notice to be speaking enough to enable the assessee to respond to the same.
• Bare reading of the show cause notice reveals that it neither contained the material and information nor the statement containing details of ITC transaction under question.
• Section 75 of CGST Act is complete code in itself which prescribes for various stages or determination of wrongful utilization of ITC which is required to subject to affording of reasonable opportunity of being heard to the assessee.
• Since the Statute itself prescribes for affording reasonable opportunity, it is incumbent upon the Revenue to afford the same and any deficiency in that regard vitiates the end result. Accordingly, impugned orders and the show cause notice are quashed with a liberty to the competent authority to proceed in the matter in accordance with law.
• The writ petition allowed.