Case Law Details
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.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
