N.N. Wires And Steels Private Limited Vs Assistant Commissioner State Tax (Chhattisgarh High Court)
The Chhattisgarh High Court considered a writ petition challenging a summary show cause notice issued under Section 74(1) of the Central Goods and Services Tax Act, 2017/Chhattisgarh Goods and Services Tax Act, 2017, the subsequent recovery order dated 01.09.2020, and the bank attachment order dated 02.02.2021. The petitioner sought directions for issuance of a detailed show cause notice along with relied upon documents (RUDs), an opportunity to submit a defence, and restraint against further action pursuant to the impugned proceedings.
The petitioner contended that the notice issued under Section 74(1) was not in accordance with the statutory requirements because it failed to specify how the petitioner had failed to pay tax properly. It was further submitted that the department did not supply the relevant documents despite the petitioner’s request, thereby depriving the petitioner of an effective opportunity to defend the proceedings.
The respondents raised a preliminary objection regarding maintainability, contending that an efficacious alternative remedy of appeal was available under Section 107 of the CGST Act, 2017. On merits, the respondents submitted that the petitioner had purchased goods from non-existing dealers and claimed bogus input tax credit from bogus dealers. It was further submitted that although the petitioner had applied for relevant documents, the petitioner failed to participate in the subsequent proceedings, resulting in the recovery order and bank attachment.
