Agrometal Vendibles Private Limited Vs State of Gujarat (Gujarat High Court)
The intimation under sub-section (5) of Section 74 has to be strictly in Form GST DRC – 01A. It is not a show cause notice. In the intimation, the dealer should be informed that if he fails to make the payment, the next step in the process will be issue of a show cause notice under sub-section (1) of Section 74 in accordance with the Form GST DRC – 01.
Once there is a show cause notice in the Form GST DRC – 01 in accordance with Rule 142(1)(a) of the Rules to be read with sub-section (1) of Section 74, the same would ultimately lead to regular assessment proceedings with final assessment order.
Department needs to correct itself not only as regards their understanding of the entire procedure, but even the contents of the Forms are incorrect. The intention of the proper officer was to give intimation in accordance with sub-section (5) of Section 74 and therefore, the intimation should have been in the Form GST DRC – 01A and not Form GST DRC – 01. There is a vast difference between Rule 142(1)(a) and Rule 142 (1A) of the Rules. Therefore, from now onwards, if the department deems fit to issue any intimation of tax ascertained as being payable under sub-section (5) of Section 74 in accordance with the Rule 142(1A) of the Rules, it shall issue notice in the Form GST DRC – 01A. In such a notice of intimation, the proper officer shall not threaten the dealer that if he would fail to comply with the intimation, the department shall proceed to recover the tax. The proper officer should inform the dealer that if he would pay the tax, well and good, otherwise the department shall proceed to issue a show cause notice under sub-section (1) of Section 74 in accordance with Rule 142(1)(a) of the Rules, 2017 in Form GST DRC – 01 and carry out regular assessment proceedings.
For the foregoing reasons, the impugned intimation of tax in the Form GST DRC – 01 is hereby quashed and set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1 With the consent of the learned counsel appearing for the parties, the matter is taken up for final hearing.
2 Rule returnable forthwith. Mr. Utkarsh Sharma, the learned A.G.P. waives service of notice of Rule for and on behalf of the respondents.
3 By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs:
“(a) Your Lordships be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the petitioner’s case and after going into the validity and legality thereof be pleased to quash and set aside the impugned show cause notice dated 14.03.2022;
(b) Your Lordships be pleased to issue a writ of mandamus or any other appropriate writ in the nature of mandamus ordering and directing the respondents to forthwith refrain from taking any further steps or proceeding pursuant to or in implementation of the impugned notice dated 14.03.2022 issued by respondent No.3;
(c) That pending the hearing and final disposal of the above petition, this Hon’ble Court be pleased to, stay the effect and operation of impugned notice dated 14.03.2022;
(d) An ex-parte ad-interim relief in terms of prayer (c) above may kindly be granted;
(e) Costs of the petition be provided for; and
(f) Such other and further order or orders as may be deemed just and proper in the facts and circumstances of the present case may kindly be granted.”
4 The facts giving rise to this writ application may be summarized as under:
5 The writ applicant has received an intimation of the tax ascertained as being payable under Section 74(1) and (5) resply of the GST Act, 2017 in the Form GST DRC – 01 dated 14th March 2022. In the intimation, it has been stated as under:
“O/o the Asst. Commissioner of State Tax, Unit – 3
C-4, Multi Storeyed Building, Apna Bazar, Lal Darwaja
Ahmedabad – 380001
_____________________________
ACST/Unit-3/GST Adjudication/2021-22/O.W.No. Dt. 14.03.2022
FORM GST DRC-01
Intimation of tax ascertained as being payable under section 74(1), (5)
[See Rule 142 (1A)]
Part A
To,
AGROMETAL VENDIBLES PRIVATE LIMITED (GSTIN:-
24AA0CA1410F1Z8)
439, Near Khetarpal Ni Pole, Ahmedabad, Manek Chawk, AHMEDABAD
380001
Email ID:- [email protected]
DEALER PROFILE:-
