Sakhsham Knowledge Services Private Limited Vs Nitin Bansal (GSTAT Lucknow)
Summary: The GST Appellate Tribunal considered whether Form GST DRC-01, being only a summary of a show cause notice, can substitute the statutory show cause notice required under Section 73 of the UPGST/CGST Act and whether Input Tax Credit could be denied merely because of mismatch between GSTR-2A and GSTR-3B. The appellant, Sakhsham Knowledge Services Private Limited, had received a notice under Section 61 pointing out discrepancies relating to FY 2018-19. It explained that one supplier had inadvertently reported a B2C supply instead of a B2B supply and that the correct tax liability had been discharged. Thereafter, instead of issuing a substantive SCN under Section 73(1), the department uploaded Form GST DRC-01 accompanied by an attachment referring to another taxpayer, M/s Sai Kripa Medical Store, with a different GSTIN.
An order-in-original was subsequently passed raising tax, interest and penalty, and the First Appellate Authority upheld substantial parts of the demand. GSTAT held that issuance of a proper SCN is the foundation of adjudication under Section 73 and that Form GST DRC-01 issued under Rule 142(1)(a) is only a summary and cannot independently dispense with the statutory notice. The Tribunal relied upon Sai Kripa Medical Store Vs State of Jharkhand and Construction Catalysers (P.) Ltd. Vs State of Assam, holding that the SCN and its summary are two separate requirements. It found that the DRC-01 served on the appellant actually related to another assessee and therefore did not even provide a trace of the specific allegations against the appellant. Absence of a valid SCN rendered all subsequent proceedings invalid and void ab initio. On the merits, GSTAT also examined the IGST demand of Rs. 20,250.54 and the ITC demand of CGST Rs. 23,465 and SGST Rs. 23,465. It noted Circular No. 183/15/2022-GST dated 27.12.2022, which specifically addresses GSTR-2A/GSTR-3B mismatches for FY 2017-18 and 2018-19, including cases where a B2B supply was mistakenly reported as B2C. The Tribunal observed that the authorities had not carried out the verification contemplated by the Circular.
