Order Passed Without Issuance Of Notice In Part A Of FORM GST DRC – 01A Is Without Jurisdiction 

Facts: The Petitioner filed the writ petition before the Hon’ble High Court challenging the order dated 10^th November 2022 passed by Respondent No. 2 under Section 74(9) of the CGST Act, 2017.

Petitioner’s Submissions: –

• It was submitted on the behalf of the petitioner that in terms of Rule 142 (1A) of the CGST Rules, 2017 as existing at the time of initiation of proceedings against the petitioner prior to the amendment on October 15, 2020, a show cause notice in Part A of FORM GST DRC – 01A is required to be issued before passing any order under Section 74.
• Further, only after issuance of said notice, the jurisdiction lies with the Competent Authority to pass order.
• That in the instant case, the notice in part A of the FORM GST DRC – 01A has not been issued and therefore, any subsequent proceedings will be without jurisdiction as the petitioner was not granted fair opportunity to respond. To support its contention, reliance was placed on the judgment of Division Bench of Delhi High Court in Gulati Enterprises Vs. Central Board of Indirect Taxes and Customs & others – 2022 U.P.T.C. (Vol.111) – 1271.

On the other hand, it was submitted on the behalf of the respondents, while not disputing the fact that notice in Part A of FORM GST DRC-01A was not issued, that subsequent reminders had given fair opportunity of hearing to the petitioner to place his case before the authority concerned, which he failed to avail of.  The impugned order now passed is appealable under Section 107 of the Act.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found the present petitioner deserves to be allowed, as for initiating proceedings against the petitioner a notice as provided under Rule 142(1A) of the Rules in Part A of FORM GST DRC-01A, which provides for communication of details of any tax, interest and penalties ascertained by the officer, was not issued.
• Further, any subsequent reminder issued will not cure inherent defect in proceedings initiated against the petitioner.
• Thereafter, the Hon’ble High Court taking reference of judgment of Delhi High Court in Gulati Enterprises (supra), wherein ‘also in similar facts pertaining to a case prior to the amendment of Rule 142(1A) of the Rules with effect from October 15, 2020, the impugned show cause notice was set aside and the matter was remitted back to authority concerned to initiate fresh proceedings in accordance with law’, found that the only difference in the present case is that an order has also been passed on November 10, 2022, and the same will not make any difference as the initiation of the proceedings itself are bad. Therefore, the order passed consequent thereto will also not sustain.

The Hon’ble Court with the above findings, allowed the writ petition by quashing the impugned order dated 10^th November, 2022, with liberty to the respondents to initiate fresh proceedings against the petitioner in accordance with law.

To read the complete judgment 2023 Taxo.online 2