2026-VIL-92-GSTAT-LCK
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  2. 2026-VIL-92-GSTAT-LCK

SGST Tribunal

GST - Statutory requirement of Show Cause Notice, Form DRC-01 as summary cannot substitute SCN, Validity of adjudication proceedings without proper SCN - Appellant contended no proper SCN issued to them and entire proceedings invalid - Whether Form DRC-01, being summary of SCN, can substitute statutory requirement of SCN under Section 73(1) of CGST Act, 2017 - HELD - Show Cause Notice is bedrock of adjudication proceedings for determining tax, interest and penalty and serves important safeguard of natural justice. Section 73(1) mandates that proper officer shall serve notice on person chargeable requiring to show cause using word shall which indicates promise or obligation that cannot be diluted by tax administration. Form DRC-01 is only summary of SCN and cannot stand independently dispensing with statutory requirement mandated by legislature. DRC-01 cannot replace proper Show Cause Notice - Validity of SCN requires examination of six points: who is person proceeded against, what tax or ITC alleged wrong, for which period, under which statutory provision, on what factual and evidentiary basis and whether taxpayer given real opportunity to answer allegation - In present case SCN attached with DRC-01 addressed to different taxpayer and no separate SCN issued to appellant. Appellant left in dark as to cause against which to address replies. Absence of proper SCN rendered appellant's opportunity being denied fundamental right of natural justice - Entire proceedings set aside as invalid and void ab initio due to absence of proper Show Cause Notice. Adjudication proceeding cannot sustain without statutory SCN properly issued to taxpayer. Orders-in-Original and Order-in-Appeal set aside – The appeal is allowed - GST - Demand of IGST arising from mismatch between GSTR-1 and GSTR-3B, Sustainability of demand in absence of reasoning and verification - Appellant reported taxable supply value of Rs.1,12,500/- in GSTR-3B but had reported only Rs.1,12,000/- in GSTR-1 creating difference of Rs.500/-. Corresponding difference in IGST created mismatch of Rs.20,250.54. Department issued DRC-01 and adjudicating authority demanded reversal of IGST - Whether demand of reversal of IGST can be sustained when no reasoning provided in adjudication order and mere upholding of demand without line of reasoning by appellate authority amounts to valid adjudication - HELD – In the absence of proper SCN and absent any line of reasoning in order-in-original justifying the amount as excess IGST, and bland upholding of order-in-original by first appellate authority without addressing merits, adjudication order cannot be sustained. Tribunal unable to appreciate how demand for IGST reversal can be justified when no factual or legal basis provided at any level of adjudication. Mere tabulation of figures without supporting reasoning or evidentiary foundation does not constitute valid adjudication order. Examination of applicability of case laws and principles necessarily becomes superfluous in case where foundational adjudication order lacks any substantive reasoning - Demand of IGST not sustainable. Order-in-original and Order-in-Appeal demanding reversal of IGST liability is set aside - Demand for reversal of CGST and SGST based on mismatch between GSTR-2A and GSTR-3B, Application of procedure under Circular No.183/15/2022-GST - Supplier inadvertently reported supply in GSTR-1 against different GSTIN instead of appellant's GSTIN resulting in mismatch between GSTR-2A and GSTR-3B – Demand for reversal of ITC based solely on mismatch without examining actual receipt or validity of invoice - Whether demand for reversal of CGST and SGST ITC based solely on mismatch between GSTR-2A and GSTR-3B can be sustained without compliance with procedure prescribed in Circular No.183/15/2022-GST requiring examination of conditions under Section 16 of CGST Act, 2017 - HELD - Circular No.183/15/2022-GST Para 4 prescribes that proper officer shall first seek details from registered person regarding invoices where ITC availed in GSTR-3B but not reflecting in GSTR-2A and then ascertain fulfilment of conditions under Section 16 of CGST Act for such ITC - Mere mismatch cannot be ground for denial of ITC without proper examination and verification per prescribed procedure. Respondent should have taken note of procedure prescribed in Circular before issuing demand – The demand for reversal of CGST and SGST ITC based on mismatch set aside. Mere mismatch between GSTR-2A and GSTR-3B not sufficient ground for ITC reversal without compliance with procedure prescribed in Circular requiring verification of conditions under Section 16 of CGST Act and examination of actual receipt of goods and invoices.
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