DRC-07 notice

[VIGNESH]

Sir recently there are few notices received in DRC-07 for TRAN-1 Cases , the department officers have said that they have issued notice by mail, but unfortunately client has not seen the mail, we have all relevant records, should we go only for appeal or can officer recall the notice and get the records? is sending notice by mail suffice!

[KASTURI SETHI]

As per Information Technology Act, Notice is treated as served.

[KASTURI SETHI]

Legally served.

[KASTURI SETHI]

Also go through Section 169 of CGST Act, 2017 for this purpose :-

 

[ABHISHEK TRIPATHI]

2020 (11) TMI 786 - MADHYA PRADESH HIGH COURT AKASH GARG VERSUS STATE OF M.P.

 

[KASTURI SETHI]

Dear Querist,

Pl. note the following points before filing appeal ;

(i) The Madhya Pradesh High Court decided the case in Nov. 2020. The department has time to challenge this order in the Supreme Court.

(ii) Note Section 169(1) of CGST Act. It says, "Notice, order etc. shall be served by any one of the methods----"

(iii) You must know the importance of the word, 'OR' between (c) and (d).

(iv) Rules cannot override the Act. Rules are always subject to respective Act.

(v) Facts in the above cited case are not similar to your issue/case.

(vi) GSTN Portal should be in harmony with GST Acts and NOT vice versa.

Rest is your luck. Wish you the best luck.

[ABHISHEK TRIPATHI]

Just serving notice isn't enough, when the statute tells you to upload DRC-01, it is the responsibility of the department to do so. In 142, they have used the word “shall”. PNJ will get satisfied when followed Rule 142, if the department violates Rule 142, hence violation of PNJ.

Notice may be served on email as per the Act, but the same has to be uploaded on the portal along with DRC-01. Why government has added DRC-01 mandatory? Because for instance, E-mails may have their restrictions of non-delivery and going into spams. That’s why the common portal is added into the rule and was made mandatory for department to upload the same on the portal.

[KASTURI SETHI]

It will be querist's sheer luck.

[KASTURI SETHI]

Any judgement by any court which prefers Rule to the relevant Act is worth challenging in the higher court by the department.

[KASTURI SETHI]

The significance of the Act as compared to Rules has been well explained in the judgement of the Hon'ble Supreme Court in the case of SHREE BHAGWATI STEEL ROLLING MILLS Vs.CCE = 2015 (11) TMI 1172 - SUPREME COURT

[ABHISHEK TRIPATHI]

Dear KS Sir,

It’s a very interesting point.

My views:

1. Whether Rule 142 is beyond Sec. 169 is something to ponder upon. Like circulars, if the rule mandates the department something then the department has to follow such rule, non-following of issuance of DRC-01 will lead to violation of such rule.

2. Who will challenge Rule. 142? Obviously, it might be the department challenging this rule. But, getting ‘instructions’ to challenge seems improbable (Little bit I am aware that AR or anyone representing government mainly works on instructions). Because the government has only framed such rule of serving DRC-01 along with the notice. Anyway, the government always has the option of omitting such requirement from the rule.

3. In light of the above, a pertinent question arises i.e., whether department can challenge the constitutional validity of a rule?

[KASTURI SETHI]

SH. ABHISHEK TRIPATHI JI,

Sir, Before answering to your questions I want to express my views as under :-

(i) Rules are subject to the Act. Rules assist the Act and also help in understanding the Act. Rules are 'subordinate' to the Act. It is beyond dispute that if there is some disharmony between the Act and Rules, the Act will prevail over the Rule.

(ii) Sending notice by email is one and initial opportunity to the assessee for providing natural justice. It is just a means of communication and further opportunities are given in the form of SCN (if required) for filing reply, according personal hearing and thereafter decision. As per the Act, the department can choose any means of communication provided/prescribed in the Act. Personal email ID is given in the application form for registration and the assessee is supposed to check his/her email daily for this purpose.

(iii) How the PNJ have been violated by sending the notice through email and that too as per the Act ? I could not digest. In my view no violation PNJ by the department.

Sir, I have expressed my views just for healthy discussion and that too in sportsman spirit.

[KASTURI SETHI]

Dear Sir,

Just sharing for knowledge of readers.

Statutes - Rule cannot override or be contrary to provisions of Section. [para 7] held by the Supreme Court reported as in the case of COMMISSIONER OF CENTRAL EXCISE, JAMSHEDPUR Versus ASHOK ARC - 2004 (12) TMI 94 - SUPREME COURT

Decided on 1-12-2004

AI Summary

Service by email treated as valid, but mandatory portal upload under procedural rules may affect compliance and remedy.
Service of notices by electronic mail is legally effective under the Information Technology Act and Section 169 of the CGST Act, but mandatory portal procedures-chiefly Rule 142's requirement to upload DRC-01-raise separate compliance issues. While rules are subordinate to the Act, failure by the department to upload notices on the portal can prompt contentions about procedural fairness and satisfaction of procedural prerequisites, even though courts recognise that statutory provisions prevail over inconsistent rules.