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GST Update No 317 on discrepancies in Order passed in GST DRC-07 vis a vis allegations in ASMT-10

GST Update No 317 on discrepancies in Order passed in GST DRC-07 vis a vis allegations in ASMT-10
It is often observed that the revenue authorities ignore the statutory provisions in force while issuing the order in original. The repercussions of careless attitude of revenue authorities are faced by taxpayers hampering their business operations. There had been various cases in the past as well wherein Courts have bashed the departmental authorities for being grossly negligent in performing their duties. Recently, a case was reported before Madras High Court in the case of M/S VADIVEL PRYOTECH PRIVATE LIMITED V/S THE ASSISTANT COMMISSIONER (ST) wherein the discrepancies were noticed in the allegations raised in ASMT-10 as compared to the order passed in GST DRC-07. The decision imparted in this case is subject matter of discussion of our present update.The impugned notice under DRC-01 and order in DRC-07 are passed pursuant to scrutiny of GST returns as per Section 61 of CGST Act, 2017 for the Financial Year 2018-19. The petitioner challenged the impugned order dated 09.05.2022 and submitted that the proceedings are vitiated as per Rule 99 of TNGST Rules, 2017. The petitioner is engaged in the business of manufacture and supply of pyrotechnic products and filed proper GST returns and discharged GST liability after availing input tax credit. A notice ASMT-10 was issued dated 22.12.2021 wherein discrepancies between GSTR-3B, GSTR-1 and GSTR-2A were pointed out. The petitioner furnished GST-DRC 03 dated 27.12.2021 and submitted the explanation in ASMT-11 dated 18.01.2022. When enquired on phone from the departmental officers regarding the subject matter, to petitioner’s surprise, they were informed that order dated 09.05.2022 was passed and a summary of the notice in FORM GST DRC-01 and Order in FORM GST DRC-07 had also been uploaded in the GST portal which contained six defects.It was submitted that the said defects were different from the defects/discrepancy which were pointed out in the Form ASMT 10 issued on 22.12.2021 and hence, the entire proceedings has been made behind their back and they were completely unaware of either the summary of the Notice in GST DRC-01 or the Order in GST DRC-07. Therefore, there is gross violation of principles of natural justice. Reliance was paled on decision of this court in W.P. No. 27651 of 2021. Furthermore, various provisions of CGST Act, 2017 were also referred to.The court held that ASMT-10 is mandatory before proceeding to issue GST DRC- 01, failure to issue the same in respect of the discrepancies forming the subject matter would vitiate the entire proceedings. It is well settled that when the Act prescribes the method and manner for performing an act, such act shall be performed in compliance with the said method and manner and no other manner. It was noticed that as the basis of allegations in ASMT-10 were different from the order passed in DRC-07, it was decided to remand back the case to the Assessing Officer to conclude the case after providing opportunity osf hearing to the assessee.The above decision is another example wherein courts have stepped forward and provided relief to the aggrieved assesses. It is very essential that the initial notice prescribing certain allegations aligns with the order passed thereon. The order which is passed beyond the scope of the allegations levelled in the show cause notice is non-est and deserves to be quashed. The revenue authorities should take a note of these settled judicial precedents before initiating any proceeding against the assessee failing which will result into sheer wastage of time and energy of courts and taxpayers.
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