Notice in DRC-01 issued for different assessment year quashed and matter remanded: Madras HC

Tvl Suresh Sethu Vs Assistant Commissioner (Madras High Court)

Madras High Court held that notice and order thereof issued for A.Y. 2021-22 instead of 2018-19 in form DRC-01 is liable to be quashed. Accordingly, matter remanded back for passing fresh order on merits.

Facts- Vide the present petition, the petitioner submits they had voluntarily surrendered the registration and the registration was cancelled on 04.10.2021. On the date of cancellation of the registration, the petitioner had stock of goods on which petitioner had availed input tax credit and therefore, the petitioner was required to reverse the credit on the date of closure of the business.

Show cause notice in DRC 01 was issued to the petitioner on 21.06.2022. However, it was issued for the assessment year 2018-19 when indeed the dispute relates to the assessment year 2021-22 on account of closure of the petitioner’s business and surrendering of the business with effect from 04.10.2021. It is submitted that since the show cause notice itself was issued for the assessment year 2018-19, the department has proceeded to invoke Section 74 of the Tamil Nadu Goods and Services Tax (TNGST) Act. As a result of which, the petitioner has been mulcted with penalty and interest liability.