Case Law Details
Amit Traders Thro Amitkumar Arvindbhai Patel Vs Union of India & Ors. (Gujarat High Court)
In the case of Amit Traders Thro Amitkumar Arvindbhai Patel Vs Union of India & Ors., the Gujarat High Court addressed the issuance of pre-consultation notices under the CGST/GGST Act, 2017. The petitioner, represented by advocate Mr. Avinash Poddar, challenged a show-cause cum demand notice issued on February 12, 2024, arguing that it was contrary to Section 74(5) of the Act. The petitioner contended that the authorities did not issue a notice in Form GST DRC-01A, as required by Rule 42(1A) of the CGST/GGST Rules, 2017, prior to issuing the demand notice. While it was acknowledged that the pre-consultation notice in Form DRC-01A was no longer mandatory after an amendment on October 15, 2020, the petitioner argued that the word “may” in the amendment should be interpreted as “shall,” to avoid rendering Section 74(5) of the Act redundant.
The Gujarat High Court, considering these arguments, issued an interim order, allowing the petitioner to continue cooperating with the adjudication process. However, it restrained the respondents from passing a final order until the case is resolved. The court has scheduled the next hearing for October 16, 2024. The ruling clarifies that while the issuance of pre-consultation notices in Form DRC-01A is no longer mandatory post-amendment, the matter still requires judicial scrutiny to interpret the legal intent behind the amendment.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr. Avinash Poddar for the petitioner and learned AGP Ms. Hetal G. Patel for the respondents.
2. Learned advocate Mr. Avinash Poddar submitted that the impugned show-cause cum demand notice dated 12.02.2024 was issued in contrary to the provision of Section 74(5) of the CGST/GGST Act, 2017 (for short “the Act”), as the respondent authorities have not issued any notice in Form GST DRC-01A as contemplated under Rule 42(1A) of the CGST/GGST Rules, 2017.
3. It was submitted that though the requirement of issuance of the pre-consultation notice in Form-DRC-01A is not compulsory as per the amendment brought on the statute with effect from 15th October, 2020, the word ”may” is required to be read as “shall” otherwise, Subsection (5) of Section 74 of the Act would become redundant.
4. Considering the above submissions, issue Notice returnable on 16th October, 2024. By way of ad-interim relief, the petitioners shall continue to cooperate in the adjudication process of the impugned show-cause notice, however the respondents shall not pass the final order during the pendency of this petition. Direct service through e-mail is permitted.
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