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of <h1>Improperly Issued GST Recovery Notice Quashed, Authorities Directed to Reissue Correct Notice Within Seven Days Under Rule 88C</h1> <h3>Caterpillar India Private Limited, Represented by its Authorised Signatory, Mr. G. Srivathsan Versus The Assistant Commissioner, Office of the Deputy/Joint Commissioner of CGST and Central Excise, The Additional Commissioner, Office of the Commissioner of GST and Central Excise, Audit II Commissionerate, Chennai And The Goods and Services Tax Council, New Delhi</h3> Caterpillar India Private Limited, Represented by its Authorised Signatory, Mr. G. Srivathsan Versus The Assistant Commissioner, Office of the ... Issues:The issues involved in the judgment are the challenge to the recovery notice dated 13.09.2023 primarily based on the procedural safeguards prescribed under Rule 88C of the CGST Rules, 2017 and the discrepancy between sales declared in outward supplies and in Form GSTR 1.Challenge to Recovery Notice:The petitioner challenged the recovery notice dated 13.09.2023 on the grounds that the procedural safeguards under Rule 88C of the CGST Rules, 2017 were not followed. Despite replying to the initial notice in GST DRC 01A dated 07.09.2023, the recovery notice invoked Section 75(12) u/s Rule 88C of the CGST Rules, 2017. The petitioner contended that the notice should have been issued in Part A of Form GST DRC 01B electronically, which was not done. The petitioner explained discrepancies between sales declared in Form GSTR - 1 and Form GSTR3-B, but the recovery notice was still issued, bypassing procedural safeguards.Compliance with Rule 88C and GST Council Recommendations:The petitioner argued that the proceedings should have been initiated based on the recommendations of the GST Council, as mandated by Rule 88C of the CGST Rules, 2017. Despite the GST Council's deliberations in the 49th Meeting on 18.02.2023, there was no intimation of compliance with Rule 88C requirements. The respondents referenced Clarifications/Instructions/Orders issued by the Central Board of Indirect Taxes and Customs, highlighting the need for explanations in cases of discrepancies between GSTR-1 and GSTR-3B.Court's Decision:The court directed the respondents to issue the notice contemplated in Form GST DRC - 01B on the common portal within seven days, as required by Rule 88C of the CGST Rules, 2017. It emphasized that recovery cannot be made solely based on differences in Form GSTR - 1 and Form GSTR - 3B without following the prescribed procedure. The impugned recovery notice under Rule 79 of the CGST Rules, 2017 was quashed, with liberty given to the respondents to issue an appropriate notice in Form GST DRC 01B before proceeding with any recovery based on the noticed differences. The writ petition was allowed with no costs.
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