Elesh Agrawal Vs Union of India And 2 Others (Allahabad High Court)
Allahabad High Court held that issuing a GST penalty show cause notice in Form DRC-01 instead of DRC-01A is a technical error and not fatal when the assessee disputes the entire liability and no final demand is made.
The Allahabad High Court has dismissed a petition filed by Elesh Agrawal, upholding the validity of a Goods and Services Tax (GST) show-cause notice despite it being issued on the wrong form. The petitioner challenged a demand-cum-show-cause notice issued on Form GST DRC-01, arguing that it was premature and should have been issued on Form GST DRC-01A, which allows an assessee to voluntarily pay the disputed amount. The court found that because the petitioner was disputing the entire tax liability, the issuance of the preliminary notice on Form GST DRC-01A would have been a “futile” and “formal” exercise. The court concluded that no real prejudice was caused to the petitioner by this procedural error.
The case involved a notice dated February 24, 2023, issued to the petitioner proposing penalties under various sections of the Central GST Act, 2017, amounting to over Rs. 10.5 crore. The petitioner’s counsel, citing a Division Bench decision of the Gujarat High Court in Agrometal Vendibles Private Limited Vs. State of Gujarat, argued that the department was required to first provide an opportunity for self-assessment and payment through Form GST DRC-01A before proceeding with formal adjudication via Form GST DRC-01. The petitioner also raised a technical objection that the notice was not uploaded to the GST portal or served through electronic means.
