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GST - Section 9(3) and 9(4) of the CGST Act, 2017 – Demand of GST under Reverse Charge Mechanism on purchase of raw cotton from agriculturist/unregistered dealers – Validity of issue of notice and passing of order under two different Sections – Whether mere mentioning Section 9(4) instead of Section 9(3) of the CGST Act, 2017 vitiate the show cause notice and the adjudication proceedings - petitioner also contest the impugned notice on the ground that the first the notice was issued under Section 73 of the CGST Act and later on, the notice was issued under Section 74 of the Act – Plea of Revenue neutrality - HELD - In view of Notification No. 43/2017-Central Tax (Rate) dated 14.11.2017, issued under Section 9(3) of the CGST Act, the registered dealer, who purchases raw cotton falling in Tariff Item 5201 from an agriculturist, is liable to pay the GST on RCM basis with effect from 15.11.2017. Hence, the petitioner, who is dealing in purchase and sale and export of cotton, is liable to pay the GST on RCM basis on raw cotton purchased from agriculturist on RCM basis in view of the Notification No.43/2017-Central Tax (Rate) dated 14.11.2017 - The contention that the petitioner is not liable to pay the GST would be contrary on face of the notification issued under Section 9(3) of the Act - The contention of the petitioner that the first the notice was issued under Section 73 of the Act and later on, the notice was issued under Section 74 of the Act, is not tenable because if the notice issued under Section 73 and notice issued under Section 74 are compared, the authorities have found out further suppression on part of the petitioner with regard to non-payment of GST on RCM basis for the Financial Year 2018-19 - No show cause notice in Form GST DRC-01 was issued under Section 73 of the Act and only the impugned SCN is issued under Section 74 of the Act and as there is suppression on part of the petitioner, the respondent gets an extended period of 5 years for initiating action for assessment – further, the show cause notice as well as the impugned order both refers to the Notification No.43/2017-CT(R) which was issued under Section 9(3) of the CGST Act and, therefore, mentioning the Section 9(4) in the notice would not make the notice illegal. The petitioner was made aware that the petitioner is liable to pay the GST under RCM on the basis of the Notification No.43 of 2017 which is issued under Section 9(3) of the CGST Act and, therefore, the contention of the petitioner that the notice and the order are passed under different Sections 9(3) and 9(4) cannot be accepted - the impugned order fastening GST liability along with the penalty of equal amount under Section 122(2) of the CGST Act for non-payment of GST on RCM for the raw cotton purchased by the petitioner from 15.11.2017 onwards, is upheld - The petition being devoid of any merits, is dismissed - Inter-play of Section 9(3) and Section 9(4) of the CGST Act – HELD - Section 9(3) of the CGST Act, the same applies for payment of GST on RCM wherein the Government, on recommendation of the Council by notification, has specified the categories of supply of goods or services or both, the tax on which GST is to be paid on reverse charge basis by the recipient of such goods or services or both and the provisions of the Act to apply to such recipient as if he is the person liable for paying the tax. Whereas sub-section (4) of Section 9 refers to the issuance of the Notification by the Government on recommendation of council specifying a class of registered person who in respect of the supply of specified category of goods or services or both, received from unregistered supplier, is liable to pay tax on ‘reverse charge’ basis. Therefore, when the petitioner has admittedly purchased the raw cotton which is a specific category of supply of goods from the agriculturist, the provision of Section 9(3) is applicable as per Notification No.43 of 2017 with effect from 15.11.2017. Therefore, the contention raised on behalf of petitioner that the petitioner is not liable to pay the GST on RCM basis in absence of any notification under Section 9(4) is not tenable because the petitioner is liable to pay tax on RCM basis as per provision of Section 9(3) of the CGST Act - Mentioning of incorrect Section in SCN – HELD - Since the respondent has made reference to Section 9(4) of the CGST Act, it was contended by the petitioner that the case of the petitioner is covered by RCM as per Section 9(4) of the CGST Act and not as per Section 9(3) of the CGST Act - Such contention of the petitioner is also not tenable as the respondent has also referred to Notification No.43 of 2017 dated 28.6.2017 which pertains to Section 9(3) of the CGST Act. Therefore, merely mentioning Section 9(4) instead of Section 9(3) of the CGST Act would not vitiate the show cause notice in any manner - Plea of Revenue Neutrality – HELD - The contention of the petitioner that the entire exercise would be a revenue neutral, cannot accepted as the petitioner is not 100% EOU but is also only exporting 80% of its product and, therefore, payment of IGST on the export and getting refund of the same by the petitioner under the provisions of the IGST read with Section 54 of the CGST Act cannot absolve the petitioner from the liability to pay GST on RCM basis under Section 9(3) of the CGST Act which is a charging section. Therefore, the submissions of the petitioner is not acceptable - Levy of penalty under Section 122(2) of the CGST Act – HELD - the petitioner was put to notice with regard to non-payment of GST under RCM on raw cotton purchased from the agriculturist since 2022. However, the petitioner did not consider the same to be a notice for avoiding the penalty and has invited the impugned order and, therefore, it is rightly believed by the respondent that the petitioner has deliberately not paid the GST on RCM on the raw cotton purchased from the agriculturist contrary to the Notification No.43 of 2017 issued under Section 9(3) of the CGST Act and, therefore, no interference is required to be made for imposition of penalty by the impugned order.
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