2022 (3) TMI 490

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....grounds of violation of principles of natural justice. 2. The petitioner is a sole proprietary concern, they engaged in the business of iron and steel scrap. The petitioner is registered under GST with GSTIN Nos: 33CDVPR5729K1ZP/2017-2018, 33CDVPR5729K1ZP/2019-2020 and 33CDVPR5729K1ZP/2018-2019 respectively dated 05.08.202. 3. That the petitioner had filed return under the GST Act regularly, while so, as per the investigation of the Department concerned, a communication in Form No. DRC-01A dated 15.10.2020 was issued to the petitioner alleging that some of the suppliers, who have supplied iron and steel scrap to the petitioner were either non-existent or were not conducting any business therefore, the petitioner had wrongly availed Input ....

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....s Tax Act [CGST Act], an option has to be given to the petitioner/assessee, either, he wants to pay tax and penalty and in this regard, notice in Form DRC-01A under Rule 142(1) of the CGST Rules should have been issued which they have admittedly issued on 15.10.2020 and 16.10.2020. In response to the said notice in DRC-01A, the petitioner had given a reply on 19.10.2020 not accepting the proposal issued under the notice in DRC-01A. Thereafter, the next procedure to be followed by the Revenue is that under Section 74(1) of the CGST Act, further notice in DRC-01 should have been issued and an opportunity should have been given, then only final order with regard to reversal as has been done herein, has to be made. However, admittedly, since th....

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....neously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under Section 50 and a penalty equivalent to the tax specified in the notice." 10. Sub Section 5 of Section 74 reads thus: "The person chargeable with tax may, before service of notice under Sub-Section(1), pay the amount of tax along with interest payable under Section 50 and a penalty equivalent to fifteen per cent. Of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper office in writing of such payment." 11. Therefore the first step, if the revenue wants to i....