2021 (10) TMI 36 - HC - GST

Court Sets Aside Order for Non-Compliance with Tax Rules

M/s. Shri Tyres Versus State Tax Officer, Chennai

The court set aside the impugned order due to non-compliance with Rule 142 of the CG&ST Rules, 2017, emphasizing procedural adherence to avoid ... Validity of assessment order u/s 73 - Violation of principles of natural justice - No personal hearing has been granted - procedure for making impugned order not followed - impugned order was not preceded by Forms GST DRC-01 and GST DRC-01A - HELD THAT:- The requirements of issue of FORM GST DRC-01 and FORM GST DRC-01A have been statutorily ingrained in the rules made under the CG&ST Act i.e., Rule 142 of the CG&ST Rules, 2017. A careful perusal of Section 73 of the CG&ST Act in conjunction with Rule 142 makes it clear that non adherence to Rule 142 had caused prejudice to the writ petitioner qua impugned order and therefore it is a rule which necessarily needs to be adhered to,if prejudice is to be eliminated in the case on hand. In other words, it is not a mere procedural requirement but on the facts and circumstances of this case, it becomes clear that it tantamount to trampling the rights of writ petitioner. The impugned order is set aside, solely on the ground of non adherence to Rule 142 of the CG&ST Rules, 2017 and all other procedural requirements - As the impugned order is set aside solely on the ground Rule 142 of CG&ST Act, 2017, though obvious it is made clear that no view or opinion on the merits of the matter have been expressed in the instant order - petition disposed off. Issues involved:Non-adherence to Rule 142 of the CG&ST Rules, 2017 in the impugned order.Detailed Analysis:Issue 1: Non-adherence to Rule 142 of the CG&ST Rules, 2017The writ petitioner challenged an order made under Section 73 of the Central Goods and Services Tax Act, 2017, citing lack of personal hearing and failure to follow the prescribed procedure of Forms GST DRC-01 and GST DRC-01A. The Revenue counsel confirmed a personal hearing was conducted but acknowledged the absence of the mentioned forms preceding the order. The court examined Rule 142 of the CG&ST Rules, 2017, which mandates the issuance of specific forms along with notices and statements related to tax demands. The court noted that the failure to adhere to Rule 142 prejudiced the writ petitioner's rights and set aside the impugned order solely on this ground.Judgment:The court ordered the setting aside of the impugned order due to non-compliance with Rule 142 of the CG&ST Rules, 2017, emphasizing the importance of adhering to procedural requirements to eliminate prejudice. The court clarified that this decision did not express any opinion on the merits of the case. The respondent was directed to initiate proceedings afresh, ensuring compliance with Rule 142 and other procedural requirements. The court mandated the completion of this process within twelve weeks from the date of the judgment.Conclusion:The court's decision highlighted the significance of following statutory rules and procedures in tax matters to safeguard the rights of taxpayers. By emphasizing the necessity of adherence to Rule 142 of the CG&ST Rules, 2017, the court ensured a fair and just resolution for the writ petitioner, directing the respondent to conduct proceedings in compliance with the prescribed requirements within a specified timeframe.