Uploading summary of show cause notice and order are not valied notices and orders

Case Title: Vasantha Mayil Silks & Readymades v. Assistant Commissioner

Court: High Court of Madras

Petition No.: W.P. No. 10480 of 2024, W.M.P. Nos. 11479 & 11481 of 2024

Category: Input Tax Credit (Procedural Error in Return Filing)

Date of Judgment: 18 April 2024

Relevant Sections: Section 73 of CGST Act, 2017; Rule 142(1A) of CGST Rules, 2017

Presiding Judge: Hon’ble Mr. Justice Senthilkumar Ramamoorthy

Facts of the Case

[Para 2] The petitioner challenged the order-in-original dated 31.12.2023 on the ground of a clerical error—reporting ITC details under column 4(3) instead of 4(5) in GSTR-3B. This error resulted in a scrutiny notice under Form GST ASMT-10, which lacked the annexure specifying discrepancies.
[Para 3] A summary show cause notice dated 29.09.2023 and summary order were issued, without elaborated grounds or computation details.
[Para 3] The petitioner argued that mandatory pre-SCN intimation in Form GST DRC-01A under Rule 142(1A) was not issued.

Question(s) in Consideration

[Paras 3 & 5]

• Whether issuance of Form GST DRC-01A is mandatory before issuing a show cause notice under Section 73.
• Whether a summary show cause notice and order without annexure/details satisfy principles of natural justice.

Observations of the Court

[Para 5]

• The Form GST ASMT-10 served did not include the required annexure specifying discrepancies.
• Both the show cause notice and the final order were in summary form, lacking requisite details.
• There was no evidence that the detailed SCN or order was uploaded on the GST portal.
• Hence, due process was not followed, and the proceedings were procedurally flawed.

Judgment of the Court

[Para 6]

• The order dated 31.12.2023 was set aside.
• Liberty was granted to the department to initiate fresh proceedings strictly in accordance with law, ensuring compliance with procedural safeguards.
  [Para 7]
• The writ petition was disposed of; connected miscellaneous petitions closed.

Between Fine Lines

• A taxpayer’s clerical error in return filing led to scrutiny and demand.
• The department failed to issue mandatory DRC-01A and did not detail discrepancies.
• The Court held that due process and fair hearing were not followed.
• Summary orders and notices without explanation breach natural justice.
• The order was quashed, with liberty to issue a fresh, lawful SCN.

Summary of Referred Cases

Takeaway

“Procedural Lapses in GST Adjudication Cannot Override Principles of Natural Justice”