Whether a show cause notice (SCN), silent on spelling out reasons/basis for issuance of SCN, is laible to be struck down

Facts:

• Impugned SCN under form DRC-01 was issued by the department in the exercise of power under Rule 142(1)(a) of Jharkhand Goods & Services Tax Act, 2017.
• SCN was issued in a format without striking out irrelevant portions & was completely silent on violation or contravention alleged to have been committed by petitioner regarding which he has to defend himself.

Legal Precedence: HIGH COURT OF JHARKHAND

In M/s NKAS Services Pvt. Ltd. Vs State of Jharkhand

Points put forth:

• SCN does not contain specific facts & allegations showing evasion of payment of due tax to the government, in the absence of ingredients of a proper SCN, the petitioner is being denied a proper opportunity to defend himself.
• The department has to specifically allege the violations or contraventions that have led to tax not being paid or short paid or input tax wrongly availed or utilized.
• It is trite law that unless the foundation of a case is laid down in a show cause notice, the assessee would be precluded from defending the charges in as vague SCN as that would entail violation of principles of natural justice.
• Summary of show cause notice issued in terms of Rule 142(1) though cannot be a substitute to a proper SCN.

Judgement:

It was held that impugned show cause notice and summary of show cause notice are quashed on the terms of principle of natural justice.

Hrithik Sachdeva, Audit Associate, SW India