GST Update No 306 on 30 days notice to be given to file reply of SCN

It is often observed that departmental officers do not follow proper and legal adjudication process and consequently, the business house have to face the repercussions of the same. Lately, there had been various cases wherein either the show cause notice was not issued or was not signed or was not uploaded on the GST portal. The aggrieved taxpayers knocked the doors of court to seek relief but the question as to “until when” is still unanswered. Recently, one such issue on the same subject matter was reported before hon’ble Bombay High Court in the case of M/S SHEETAL DILIP JAIN V/S THE STATE OF MAHARASHTRA & ORS. The decision imparted in this case is subject matter of discussion of our present update.
The petitioner raised a grievance since a show cause notice was issued under Section 73 of CGST Act, 2017 with maximum period of 7 day’s time to submit the reply. Furthermore, on the 8th day, the impugned order was passed by the departmental officer. It was argued that as per provisions of Section 73 of CGST Act, 2017, a period of 30 days is required to be given from the date of issue of show cause notice for filing reply by the assessee.
The Court therefore, upheld the submissions of the petitioner since as per provisions of Section 73 of CGST Act, 2017, a period of 30 days from issuance of show cause notice is to be given to file reply or make payment of tax along with interest. The statutory prescribed period cannot be reduced arbitrarily to 7 days. Further, the impugned order itself mentions a period of 30 days to submit the reply. It was therefore, stated that the order is passed erroneously and hence, the allegation of non-payment of tax within 30 days is improper and unjust. It was further held that the order is passed without application of mind and is contrary to the provisions of the Statue. The omission on the part of officers overburdens the dockets of the Courtand results into wastage of valuable judicial time. The officers were bashed since they failed to understand the hardships faced by the taxpayers. Further, it is difficult for the taxpayer to approach the Court and spend on a lawyer. It was therefore, held that the respondent will pay a sum of Rs. 10,000/- to PM Cares Fund as cost within a period of 2 weeks.
The above decision is yet another example of the fact that the departmental officers failed to perform their duties effectively. There had been various judicial precedents in the past as well wherein the same practices were followed by the departmental authorities. Reference can be drawn to various cases such as Bombay High Court in the case of Ramani Suchit Malushte v/s Union of India and Ors, Andhra Pradesh High Court in the case of Navya Foods (P) Ltd. V/s Superintendent Of Central Tax, Kerala High Court in the case of M/s Pee Bee Enterprises V/s Assistant Commissioner. Relevant updates on these have also been made by us having Serial No. 298, 296, and 124 respectively. However, it is high time that these departmental authorities should follow these binding judicial rulings otherwise the taxpayers will continue to face the difficulties and knock the doors of courts.

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GST Update No 306 on 30 days notice to be given to file reply of SCN

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