2024-VIL-164-KAR
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SGST High Court Cases

GST - Short declaration of Outward Supply and excess claim of Input Tax Credit - Issue of show cause notice under Section 73[1] of the CGST Act, 2017 alleging short payment of tax – Revenue case that petitioner’s sales could not have been for a value lesser than the value of Inward Supply and therefore, the value of the Outward Supply must be taken with an addition of 10% thereof as profit to determine whether there is short payment of tax – Petitioner submits that the proceedings cannot be initiated merely because the transactional value in Karnataka is lower than the transactional value for the same supply in other States – Hurried conclusion of adjudication proceedings - HELD – It is seen from the Investigation Endorsement that the respondents have recorded that there is short declaration of Outward Supply based on the value of Inward Supply and the Sales Turn over as declared in the relevant Returns. The petitioner has filed detailed response reiterating that it was offering different prices across states and at different time as a matter of business practice - the petitioner, on receipt of the notice in FORM GST DRC-1A has again filed detailed submission reiterating its contentions - the entire process of issuance of Intimation in Part A of FORM GST DRC-01A, filing of submissions thereto and consideration thereof is completed within a period of eight days. It is undisputed that 30.09.2023 was the last date of the limitation prescribed - the reason for this hurried conclusion to assume jurisdiction under Section 73 of the CGST/KGST Act, 2017 within the crunched period of eight days, is obvious and stark; the anxiety, is to issue SCN within time lest cause is lost by lapse of time - there could be debate on the merits of the change in Rule 142(1A) of the CGST Rules, 2017 in providing that the Proper Officer may communicate the details in Part A of FORM GST DRC-01A before issuance of notice under Section 73(1) of the GST Act, but there cannot be any debate on the requirement that once the intimation is issued in Part A of FORM GST DRC-01A communicating the details of any tax, interest and penalty as ascertained and submissions are filed in Part B of Form GST DRC-01A against such proposal, the proper officer must reason why the submissions filed cannot be accepted before assuming jurisdiction to issue notice under Section 73(1) of the CGST Act. This would be crucial because of the consequences of penalty under Section 73 of the Act - if indeed the petitioner has filed submissions, as part of its submissions in Part B of FORM GST DRC-01A, the implication thereof should be examined in the light of the provisions of Section 15 of the CGST Act for a reasonable and just commencement of the proceedings under Section 73(1) of the CGST Act - the impugned Show Cause Notice is quashed and writ petition is partly allowed
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