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of <h1>GST Proceedings Halted: Procedural Defects Invalidate Tax Notice, Mandate Proper Form Compliance for Fair Hearing</h1> <h3>M/s Skyline Automation Industries Versus State of U.P. and another</h3> M/s Skyline Automation Industries Versus State of U.P. and another - 2023 (68) G. S. T. L. 235 (All.) Issues:Challenge to order under Section 74(9) of the Central Goods and Service Tax Act, 2017 due to lack of issuance of notice in Part A of FORM GST DRC-01A.Analysis:The writ petition challenged the order dated November 10, 2022, passed by respondent No.2 under Section 74(9) of the Act. The petitioner argued that according to Rule 142(1A) of the Central Goods and Service Tax Rules, 2017, before passing any order under Section 74, a show cause notice in Part A of FORM GST DRC-01A must be issued. The absence of this notice deprived the petitioner of a fair opportunity to respond. The petitioner relied on a Delhi High Court judgment in Gulati Enterprises v. Central Board of Indirect Taxes and Customs & others to support this argument.The respondents did not dispute the non-issuance of the required notice but contended that subsequent reminders provided a fair opportunity for the petitioner to present their case, which was not utilized. The respondents mentioned that the impugned order was appealable under Section 107 of the Act.The High Court, after hearing both parties, found merit in the petitioner's argument. It held that the absence of the notice in Part A of FORM GST DRC-01A rendered the initiation of proceedings against the petitioner invalid. The Court emphasized that subsequent reminders could not rectify the fundamental flaw in the initiation process. Citing the Delhi High Court's decision in Gulati Enterprises' case with similar facts, the Court ruled in favor of the petitioner, quashing the impugned notice dated November 10, 2022. The Court granted liberty to the respondents to initiate fresh proceedings against the petitioner in compliance with the law.In conclusion, the High Court allowed the writ petition, emphasizing the importance of adhering to procedural requirements for initiating proceedings under Section 74 of the Act. The judgment highlighted the significance of issuing the requisite notice as per Rule 142(1A) of the Rules to ensure a fair opportunity for the party concerned to respond, ultimately leading to the quashing of the impugned notice and granting permission for fresh proceedings to be initiated.
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