Order Date: 20 June 2022

Facts-

• The Petitioner, Anantham Retail Private Limited was engaged in trading of textiles and garments. 
• A show cause notice was issued to the dealers to explain the issue with documentary evidences. The petitioner vide letter dated 03.01.2022, replied in Part B of the Form DRC-01A, submitted that the liability to tax as stated in subject intimation as well as the quantification are not agreeable as the same is not correct on facts and law.
• The petitioner submits that no show cause notice was raised as envisaged in Section 73 or 74 of the TNGST/CGST Act. The proceedings carried out were completely perverse and in complete violation of principles of natural justice and unreliable and the demand made in Form DRC-01A is to be rejected in accordance with law.
• The respondent contended that the notice was properly served on the dealers and then, a personal hearing notice was also given, which was also properly served on the dealers and finally, considering the objections filed by the dealers, orders were passed, which are in accordance with law and without deviating the principles of natural justice.

Issue-

• Whether the demand made under GST in Form DRC-01A is sustainable?

Order- 

• The Hon’ble High Court observed that the respondent has issued Form GST DRC-01A. Thereafter, if the petitioner has got any objection and not paid tax as ascertained, a show cause notice has to be issued under Section 74(1) of the TNGST Act and after receiving objections, giving personal hearing, the assessment order ought to have been finalised. 
• The High Court observed that the in this case, procedure not followed and issuing Form in GST DRC-09 and directing the Branch Manager, to recover the amount due from the petitioner under Section 79 of the TNGST Act, 2017, which is not proper.
•  In view of the same, the assessment orders, dated 31.01.2022, are hereby quashed. The consequential recovery notice issued to the Branch Manager, Axis Bank, is also hereby quashed.