GST Show Cause Notice Challenge Dismissed: Petitioner Must Exhaust Administrative Remedies Under Section 73 First

The HC dismissed a petition challenging a show cause notice issued under Section 73 of CGST Act, 2017. The petitioner had contested the notice arguing they had already paid the applicable 18% GST on job work and had responded to previous summons. The Court ruled that proper procedure requires the petitioner to respond to the show cause notice, attend a personal hearing, and submit supporting documents before any order is passed. The Court declined to interfere with this established legal process, emphasizing that administrative remedies must be exhausted first, and dismissed the petition without costs.

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Issues:
1. Quashing of impugned notice dated 29.03.2022
2. Validity of show cause notice under Section 73 of the CGST Act, 2017

Analysis:
1. The petitioner filed a writ petition seeking to quash the impugned notice dated 29.03.2022 issued by the fourth respondent. The petitioner had previously responded to summons and notices regarding tax issues, citing relevant circulars and explanations. The petitioner argued that the GST applicable on job work is 18% only, which has been paid. The Standing Counsel for the respondents contended that the petitioner was called to provide receipts, documents, and explanations, and subsequent notices were issued based on the responses provided. The respondent argued that if the petitioner has objections to the show cause notice, they will be heard before passing any order. The High Court noted that the petitioner had received the show cause notice, and the procedure under the law requires the petitioner to respond, attend a personal hearing, submit supporting documents, and then the order in original would be passed. Therefore, the Court declined to entertain the petition and dismissed it.

2. The Court emphasized that the petitioner had received summons, notices, and a DRC-01A notice before the show cause notice under Section 73 of the CGST Act, 2017 was issued. The Court highlighted the procedural requirement for the petitioner to respond to the show cause notice, attend a personal hearing, and submit supporting documents before the order in original is passed. The Court concluded that the procedure outlined by law must be followed, and hence dismissed the petition without costs. The connected miscellaneous petition was also closed as a result of the dismissal.

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