TaxTMI 
TaxTMI 
2022 (2) TMI 1157
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....ure-1 Office of State Tax Officer Jurisdiction:Godda:Dumka:Jharkhand State/UT:Jharkhand Reference No:ZD200621000420J Date:14/06/2021 To GSTIN/ID:20AADCN0972E1ZZ Name:NKAS SERVICES PRIVATE LIMITED Address: GODDA,LALMATIA AREA, ECL RAJMAHAL, Godda, Jharkhand , 814165 Tax Period : APR 2020-MAR2021 F.Y. 2020-2021 ARN-NA Date-N/A (Voluntary Payment Intimation details, if applicable) Act/Rules Provisions: Section 73 of the CGST/JGST Show Cause Notice under Section 73 It has come to my notice that tax due has not been paid or short paid or refund has been released erroneously or input tax credit has been wrongly availed or utilized by you or the amount paid by you through the above referred application for intimation of voluntary payment for the reasons and other details mentioned in annexure for the aforesaid tax period Therefore, you are directed to furnish a reply along with supporting documents as evidence in support of your claim by the date mentioned You may appear before the undersigned for personal hearing either in person or through authorized rep....
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....n 73 of the CGST/JGST Summary of Show Cause Notice (a)Brief Fact of the case: According to Statistics received from Headquarter/ Govt. Treasury it has come to our notice that you have received a sum as payment from government treasury against works Contract services completed / partly completed by you during the above mentioned. Whereas the liability reflected by you through filed returns is less than the above mentioned sum (As peer GSTR-3B). Kindly ignore the DRC-01 with Reference number ZD200621000153G and ARN/Case ID AD200621000201C dated 07.06.2021 (b)Grounds: Hence it appears that you are not reflecting in your filed returns total payment received and consequently total liability accrued , or you may be reflecting the taxable turnover as exempted turnover, just to evade payment of due tax to the Government. Kindly ignore the DRC-01 with Reference number ZD200621000153G and ARN/Case ID AD200621000201C dated 07.06.2021 due to an error. C. Tax and other dues (Amount in Rs.) Sr. No. Tax Rate (%) Turn over Tax Period Act POS (Place of Supply Tax Interest Penalty others Total From To 1 ....
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....hile the show cause notice does not even contain the brief facts of the case or the grounds alleged even the summary of the show cause notice does not contain specific facts and allegations showing evasion of payment of due tax to the Government. In the absence of the ingredients of a proper show cause notice the petitioner is being denied proper opportunity of defending himself. Such a proceeding could end up in vague result and would also not be in the interest of the revenue. The impugned notices at Annexure-1 and 2 therefore, are unsustainable in law and on facts on same principles as has been held in the case of the petitioner in W.P.(T) No. 2444 of 2021. 4. Learned counsel for the petitioner submits that the State Tax Authorities are fixated on the notion that since the show cause notice has to be issued in a format on the GSTN Portal, the ingredients of the show cause notice containing the detail facts and the charges cannot be uploaded or inserted by them and instead a summary of show cause notice would suffice. 5. Learned counsel for the petitioner has specifically referred to Section 75 (7) to indicate that in no case the amount of tax, interest and penalty demanded....
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....74 of the JGST Act, 2017. He has referred to the opinion of this Court at para 14, 15 and 17 of the judgment, in particular. He has summarized his arguments that if show cause notice is vague, not only is the petitioner denied proper opportunity of defending himself, but such a proceeding could end up in vague result, which would also not be in interest of the Revenue. Moreover, no amount of tax, interest or penalty can be imposed on grounds which are not specified in the notice as per Section 75(7) of the JGST Act. The impugned notice at Annexure-1 therefore lacking in the ingredients of a proper show cause notice and therefore deserves to be quashed. 9. Mr. P.A.S. Pati, learned counsel for the State has filed a counter affidavit and defended the impugned notices. According to him, the show cause notice and summary of the show cause notice have been issued in accordance with the JGST Act, 2017 and its rule. Referring to the summary of the show cause notice (Annexure-2), he submits that it is clearly mentioned that petitioner has received payment which it has not disclosed in its return and hence evaded the payment of due tax to the government. The summary of the show cause noti....
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....im through filed returns is less than the above mentioned sum as per GSTR-3B. As such, he was not reflecting the total payment received and consequent total liability accrued in the filed returns just to evade payment of due tax to the government. It needs to be mentioned here that even the summary of the show cause notice does not disclose the information as received from the headquarter / government treasury as to against which works contract service completed or partly completed the petitioner has not disclosed its liability in the returns filed under GSTR-3B. We have held in the case of the same petitioner in W.P.(T) No. 2444 of 2021 related to a show cause notice under Section 74 of the JGST Act that a summary of show cause notice as issued in Form GST DRC-01 in terms of rule 142(1) of the JGST Rule, 2017 (Annexure-2 impugned herein) cannot substitute the requirement of proper show cause notice. 12. It would be profitable to reproduce the opinion of this Court in the case of the same petitioner on the general principles governing the issuance of a proper show cause notice. Para 14, 15 and 17 of the judgment is quoted herein below: 14. A bare perusal of the impugned....
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.... him are and the allegations on which such charges are based; 27. It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge-sheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show-cause notice gets vitiated by unfairness and bias and the subsequent proceedings become an idle ceremony." 15. The Apex Court has held that the concept of reasonable opportunity includes various safeguards and one of them is to afford opportunity to the person to deny his guilt and establish his innocence, which he can only do if he is told what the charges leveled against him are and the allegations on which such charges are based. 17. As observed herein above, the impugned notice completely lacks in fulfilling the ingredients of a proper show-cause notice under Section 74 of the Act. Proceedings under Section 74 of the Act have to be preceded ....
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....that in order to fulfil the requirements of principles of natural justice, a show-cause notice should meet the following two requirements viz: (i) The material/grounds to be stated which according to the department necessitates an action; (ii) Particular penalty/action which is proposed to be taken. It is this second requirement which the High Court has failed to omit. We may hasten to add that even if it is not specifically mentioned in the show-cause notice but it can clearly and safely be discerned from the reading thereof, that would be sufficient to meet this requirement." As held there in, the requirement of principles of natural justice can only be met if (i) a show cause notice contains the materials / grounds, which according to the Department necessitate an action; (ii) the particular penalty/ action which is proposed to be taken. Even if it is not specifically mentioned in the show cause notice, but it can be clearly and safely discerned from the reading thereof that would be sufficient to meet this requirement. 14. We find that the show cause notice is completely silent on the violation or contravention alleged to have been done by the p....
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....ight of the settled legal position, the plea of the learned counsel for the Revenue in that behalf cannot be entertained as the Revenue cannot be allowed to raise a fresh plea, which has not been raised in the show-cause notice nor can it be allowed to take contradictory stands in relation to the same assessee." In a notice under Section 74 of the JGST Act, the necessary ingredients relating to fraud or willful misstatement of suppression of fact to evade tax have to be impleaded whereas in a notice under Section 73 of the same act the Revenue has to specifically allege the violations or contraventions, which has led to tax not being paid or short paid or erroneously refunded or Input Tax Credit wrongly availed or utilized. It is trite law that unless the foundation of a case is laid down in a show cause notice, the assessee would be precluded from defending the charges in a vague show cause notice. That would entail violation of principles of natural justice. He can only do so, if he is told as to what the charges levelled against him are and the allegations on which such charges are based. Reliance is placed on the opinion of the Constitution Bench of the Apex Court in the cas....