Summary Notice under DRC-01 is not a substitute for proper SCN: HC

Case Details: Sidhi Vinayak Enterprises v. State of Jharkhand - [2023] 148 taxmann.com 416 (Jharkhand)

Judiciary and Counsel Details

• • Aparesh Kumar Singh, A.C.J. & Deepak Roshan, J.
  • N.K. Pasari, Adv. for the Petitioner.
  • Rahul Saboo for the Respondent.

Facts of the Case

The department conducted search in the premises of the petitioner for irregular availment of ITC. Pursuant to search conducted by department, two summary of show cause notice in Form DRC-01 were issued. The petitioner submitted reply but the reply was rejected and summary of order was issued imposing tax and penalty.

It filed writ petition against the notice & order and contended that both show cause notice as well as summary have to be issued. The department submitted that the petitioner participated in the proceedings by furnishing a reply in Form GST DRC-06 and therefore, there was no denial of principles of natural justice.

High Court Held

The Honorable High Court noted that even though petitioner submitted reply, the department can’t take benefit of said action as summary of show cause notice can’t be considered as show cause notice as mandated under section 74(1). In the instant case, the proceeding suffered from material irregularity and hence not sustainable being contrary to section 74(1) and subsequent proceedings/ impugned orders cannot sanctify same. Therefore, it was held that the summary of show cause notices issued in Form GST DRC-01 as well as impugned orders were liable to be quashed.