Case Law Details
Prime Steel Industries Pvt Ltd Vs State of H.P. & others (Himachal Pradesh High Court)
In the recent case of Prime Steel Industries Pvt Ltd vs State of H.P. & others, the Himachal Pradesh High Court made a significant ruling regarding the issuance of Form GST ASMT-10 notices prior to the issuance of show cause notices. This article delves into the details of the case, the legal framework involved, and the implications of the court’s decision.
The case revolves around the issuance of DRC-01 notices by the Assistant Commissioner State Tax and Excise, Barotiwala, Himachal Pradesh, for the financial years 2021-22 and 2022-23. These notices were issued without serving ASMT – 10, contrary to the provisions of Rule 99 of the CGST Rules, 2017. The petitioner contended that the authorities failed to adhere to the statutory requirement of issuing ASMT-10 notices prior to show cause notices, as mandated by law.
During the proceedings, the Hon’ble High Court of Himachal Pradesh stayed the proceedings initiated by the respondents based on the notices issued without complying with Rule 99. The court noted the petitioner’s argument and the admission by the Additional Advocate General that ASMT-10 notices were not issued prior to the issuance of DRC-01 notices. Relying on Rule 99 of the CGST Rules, 2017, the court emphasized the mandatory nature of issuing ASMT-10 notices before show cause notices.
This ruling underscores the importance of procedural compliance in GST proceedings. It reaffirms the principle that statutory requirements must be strictly adhered to by the authorities to ensure fairness and transparency in tax administration. Failure to comply with such requirements can lead to the invalidation of subsequent proceedings, as demonstrated in this case.
The judgment in Prime Steel Industries Pvt Ltd vs State of H.P. & others serves as a reminder of the significance of procedural regularity in GST matters. It highlights the mandatory nature of issuing Form GST ASMT-10 notices prior to the issuance of show cause notices, as prescribed by Rule 99 of the CGST Rules, 2017. Taxpayers and authorities alike must ensure strict compliance with statutory provisions to uphold the integrity of the GST regime and promote justice in tax administration.
Rule 99 of CGST Rules, 2017, makes it clear that the issuance of notice to the petitioner in form GST ASMT-10, prior to issuance of a show cause notice, is mandatory.
FULL TEXT OF THE JUDGMENT/ORDER OF HIMACHAL PRADESH HIGH COURT
1. Fact of the case in brief:
That DRC-01 were issued by Assistant Commissioner State Tax and Excise, Barotiwala, Himachal Pradesh for the F.Y. 2022-23 on 16.02.2024 and on 28.02.2024 for F.Y.2021-22 and it is important to mention that both DRC-01 were issued without serving ASMT – 10 whereas as per the scheme of the act the authorities are under an obligation to issue ASMT-10 prior to the issue of show cause notice but in the present case the authorities have not followed the basic provisions of the act.
The Hon’ble High Court of Himachal Pradesh on 03.04.2024 stayed the proceedings initiated by the respondents vide notice dated 16.02.2024 and 28.02.2024. Text of the order is as under:
CWP No.2785 of 2024 & CMP No.4311 of 2024 Notice.
Mr. Sushant Keprate, learned Additional Advocate General, accepts service of notice on behalf of the respondents.
Learned counsel for the petitioner contends that the 2nd respondent had issued show cause notice (Annexures P-1 & P-2) under form GST DRC-01 without serving notice under Rule 99 in form GST ASMT-10. He also placed reliance on the judgment of the Gauhati High Court in M/s Pepsico India Holdings Pvt. Ltd. vs. Union of India, WP(C)/6960/2023 dt. 13.12.2023, wherein interim order has been issued in similar circumstances.
The Additional Advocate General admits that prior to issuance of the form GST DRC-01 dt. 16.02.2024 and 28.02.2024 to the petitioner, the 2nd respondent had not issued a notice form GST ASMT-10.
A reading of Rule 99 of CGST Rules, 2017, makes it clear that the issuance of notice to the petitioner in form GST ASMT-10, prior to issuance of a show cause notice, is mandatory. Therefore, there shall be stay of all further proceedings pursuant to Annexures P-1 & P-2.
List on 12th June, 2024.
Reply be filed by the said date.
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