Recovery of IGST: validity of Demand-cum-Show Cause Notice challenged due to lack of mandatory procedural preconditions; notice stayed.

Prior to issuance of a Demand-cum-Show Cause Notice under the CGST framework, an alleged discrepancy remains a discrepancy simplicitor; issuance of a Demand-cum-Show Cause Notice reflects formation of a prima facie opinion by the proper officer that statutory obligations were contravened, and such issuance requires satisfaction of mandated procedural preconditions. The impugned Demand-cum-Show Cause Notice was held to have been issued without compliance with required conditions precedent, including procedural requisites under Section 61 read with rule 99, and absence of issuance of Form GST ASMT-10; accordingly the operation of the impugned notice is stayed until the returnable date.

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Issues:
The judgment involves a writ petition challenging a Demand-cum-Show Cause Notice issued under Section 73[1] of the Central Goods and Services Tax Act, 2017 regarding the alleged wrongful availing of Input Tax Credit (ITC) by the petitioner company for the Financial Year 2017-2018.

Details of the Judgment:

*Issue 1: Proper Officer's Authority to Issue Notice*
The petitioner contested that the Demand-cum-Show Cause Notice lacked jurisdictional facts required for its issuance under Section 73[1] of the CGST Act, 2017. They argued that the statutory prescriptions under Section 61 and Section 73 of the Act were not adhered to, specifically the requirement of issuing notice in Form GST ASMT-10 prior to the impugned notice. The petitioner emphasized that without adherence to these conditions precedent, the Proper Officer could not have assumed jurisdiction to issue the notice.

*Issue 2: Compliance with Statutory Provisions*
The petitioner highlighted that the alleged discrepancy mentioned in the notice was related to the non-submission of information in Table 14 of FORM GSTR-9C. They argued that since the submission of information in Table 14 had been made optional for certain financial years, there was no error or discrepancy from the petitioner's non-filing of this information. The petitioner contended that the mandatory conditions required for invoking Section 73[1] of the CGST Act were absent in this case.

*Issue 3: Natural Justice Principles*
The respondent argued that the non-issuance of Form GST ASMT-10 did not violate the principles of natural justice. They relied on previous court decisions to support their stance that the issuance of the Demand-cum-Show Cause Notice was in conformity with natural justice principles. The respondent emphasized that the notice was issued to the petitioner as the assessee, following the principles of natural justice.

*Separate Judgment Highlighted:*
The Court found merit in the petitioner's contentions that the Demand-cum-Show Cause Notice was issued without compliance with mandatory conditions precedent, as prescribed under the CGST Act, 2017 and the CGST Rules, 2017. Consequently, the Court ordered that the operation of the impugned notice shall remain stayed until the returnable date, allowing the respondent GST authorities to file their response in the meantime.

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