Heard learned counsel for the parties.

2. Writ petition was preferred for the following reliefs:

A. For issuance of an appropriate writ(s), order(s) or directions holding that the service of a Show Cause Notice under sub- Section (1) of Section 73 of the Jharkhand Goods and Services Tax Act, 2017 is a condition precedent for issuance of any Order under Section 73(9) ibid or any other provisions of the Act.

B. For issuance of writ(s) of quo warranto and/or any appropriate writ, order or direction, directing and/or calling upon the Respondents, to show cause as to how and under what authority of law, an Order/ Summary of Order/Garnishee Notice could be issued without resorting to Section 73(1) of the Jharkhand Goods and Services Tax Act, 2017.

C. For issuance of an appropriate writ(s), order(s) or direction(s) holding that in the absence of the service of the Show Cause Notice to be issued under sub-Section (1) of Section 73 of the Jharkhand Goods and Services Tax Act, 2017, the Order dated 01-11-2021 (Annexure-5) and Summary of Order dated 01-11-2021 (Annexure-6) in Form DRC-07 and Garnishee Order dated 25-02-2022 (Annexure- 7) in FORM GST – DRC 13 are void ab initio and accordingly null and void and entire proceeding thereunder is liable to be quashed.

D. For issuance of an appropriate writ, order or direction, holding and declaring that issuance of an Order under section 74(9) read with section 16(4) of the Act without issuance of mandatory Show Cause Notice is in violation of principles of natural justice, hence, the proceedings becomes ab initio void.

E For issuance of an appropriate writ, order or direction, for quashing the Order dated 01-11-2021 (Annexure-5) purported to have been passed under Section 73(9) of the Jharkhand Goods and Services Tax Act, 2017 and Summary of Order in Form DRC 07 dated 01-11-2021 (Annexure-6) issued under Rule 142(5) of the Jharkhand Goods and Services Tax Rules, 2017 without issuing mandatory Show Cause Notice.

F. For issuance of an appropriate writ, order or direction, holding and declaring Garnishee Notice U/s 79(1)(c) of the Jharkhand Goods and Services Tax Act, 2017 read with Rule 142(5) of the Jharkhand Goods and Services Tax Rules, 2017 in Form GST DRC-13 vide Memo No.12280 dated 25-02- 2022 (Annexure-7) issued to Punjab National Bank, Sector 4, Steel City, Bokaro, for recovery sum of Rs.3,84,02,528/- is illegal and without authority of law.

3. Learned counsel for the petitioner Mr. Kartik Kurmy submits that upon scrutiny of the petitioner’s return for the period April 2018 to March 2019 certain discrepancies / mismatch were noticed in Form GST ASMT-10 vide reference no.5104 dated 11.02.2021 (Annexure-1). Petitioner furnished a reply in Form GST ASMT-11 on 16.03.2021 (Annexure-2) inter-alia taking a number of pleas through the annexed reply. However, an intimation of tax payable under Section 73(5)/74(5) of the JGST Act, 2017 was issued in Form GST DRC-01A (Annexure-3) dated 03.04.2021 by the State Tax Officer indicating the total amount of tax, interest under Section 50 of the JGST Act and penalty @ 10% amounting to Rs.3,84,11,318.04 asking the petitioner to pay the same by 19th April 2021 failing which show-cause would be issued under Section 73(1) of the Act issued. Petitioner duly replied to the communication in Part-B of the Form DRC-01A in terms of Rule 142(2A) of the JGST Rules 2017 on 13th April 2021 taking a plea that it was only pursuant to the amendment in Rule 61(5) that GSTR-3B became a return for the first time within the meaning of Section 39 of the JGST Act and the provisions of Section 16(4) w.e.f. 1st January 2021. Therefore, the allegations on interpretations of Section 16(4) of the JGST Act and the consequent denial of ITC of Rs. 2,66,26,906/- is based on a misconception of law. The noticee cannot be denied the right to avail ITC under Section 16 of the Act on any technical or venial breaches. It is submitted that under Section 16(4) of the Act a registered person shall not be entitled to take ITC in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under Section 39 for the month of September following the end of the financial year to which such invoice or the date of invoice relating to such debit note pertains or the date of furnishing of the relevant annual return, whichever is earlier. Petitioner also cited a number of judgments in his support.

In respect of the levy of the interest a plea was taken that no rules have been prescribed for computation thereof in absence of which it is unworkable.

A plea has been taken that levy of interest would start only after adjudication of the demand as the noticee has disputed the liability. Further penalty under Section 73(8)/(9) would be attracted only after demand is adjudicated upon a proper show-cause notice under Section 73(1) of the Act and is not paid within 30 days of issuance thereof. It is the specific case of the petitioner that no show-cause notice under Section 73(1) was issued after the intimation under DRC-01A. Such categorical statement has been made at paragraph 16 of the writ petition. However, the adjudicating authority has proceeded to levy tax, interest and penalty by passing an Adjudication order on 1st November 2021 (Annexure-5) to the tune of Rs. 3,84,11,318.04 and directed for issuance of summary of show-cause notice under DRC-07.

4. Learned counsel for the petitioner submits that the adjudication order is vitiated due to non-compliance of the principles of natural justice and failure to follow the procedure prescribed under Section 73 of the Act. In this regard he has placed reliance on the judgment rendered by this Court in the case of M/s NKAS Pvt. Ltd Vrs. State of Jharkhand reported in 2022 VIL 139 JHR and also on the recent decision of this Court in the case of R.K. Transport Pvt. Ltd. Vrs. The Union of India reported in 2022(2) TMI 1051. It is pointed out that the Department has further proceeded to issue garnishee notice in Form GST DRC-13 upon the petitioner’s Bank i.e. Punjab National Bank asking it to pay the sum of Rs.3,84,02,528/- to the Government forthwith in terms of Section 79(1)(c) of the Act making it clear that failure to do so shall render the bank to be a defaulter in respect of the amount specified in the notice and face consequences as per the Act and Rules.

5. Learned counsel for the petitioner has relied upon the judgment of a Coordinate Bench of this Court of which one of us (Deepak Roshan, J) was a Member, Mahadeo Construction Company Vrs. Union of India & Ors. W.P.(T) No.3517 of 2019 dated 21st April, 2020. He submits that this Court has held that in the event the assesse disputes the leviability of interest, no recovery proceeding under Section 79 of the Act can be initiated for recovery of the interest amount without any initiation of any adjudication proceedings. A perusal of the adjudication order dated 1st November 2021 would itself show that no show-cause notice under Section 73(1) of the Act was issued and petitioner denies issuance of any summary of show-cause notice either.

Learned counsel for the petitioner submits that without rejecting the reply furnished by the petitioner in FORM GST ASMT-11, the summary of show-cause notice was issued in FORM GST DRC-01A straightaway. Learned counsel for the petitioner therefore submits that the impugned order dated 1st November, 2021 and the summary of the order contained in GST DRC-07 (Annexure-6) of the same date as also the Garnishee notice issued in FORM GST DRC-13 in terms of Rule 145(1) dated 1st November, 2019 be quashed. Learned counsel for the petitioner submits that since the tax period relating to 2018-19, the annual return of which was to be filed ordinarily up-to December, 2019 and has later been extended upto March, 2020, the limitation for initiation of a fresh proceeding upon remand and passing of the order in terms of Section 73(2) read with sub-section 10 of Section 73 has not expired. Therefore, the respondents may, if so deem proper, initiate fresh proceeding in accordance with law.

6. Learned counsel for the Respondent-State has opposed the submission. Counter affidavit has been filed by the Respondent-State Tax Officer, Dhanbad. It is inter alia contended that petitioner has not availed statutory remedy of appeal under Section 107 of JGST Act against the adjudication order passed under Section 73(1). It has further been stated that petitioner has not filed information regarding mobile no. and e-mail ID of the Directors and of business. Therefore, REG-17 was issued to the petitioner. He filed self-amendment in registration and still he has not given correct mobile number of business and its representative. It is further contended that Company filed its return for the month of March, 2019 in Form GSTR-3B on 28th October, 2019 for the Financial Year 2018-19. It was scrutinized by the Department and found that the petitioner’s claim of Input Tax Credit is in contravention of Section 16(4) of JGST Act.

In view of the aforesaid discrepancies in filing of the tax return by 28th October, 2019, whereas it was required to be filed by 20th October, 2019, the Department vide Reference no. 5104 dated 11th February, 2021 issued Form GST ASMT-10 to the petitioner and sought explanation. The petitioner was also directed to reverse the ITC wrongly availed by him after the due date of filing the return. Petitioner submitted his reply on 24th March, 2021 in form GST ASMT-11, which was not satisfactory. Accordingly, Form GST DRC- 01A was issued to the petitioner intimating the liability under Section 73(5)/Section 74(5) and further the petitioner has been advised to pay the amount of tax as ascertained along with applicable interest in full by 19th April, 2021, failing which, the show-cause notice under Section 73(1) was to be issued. Petitioner replied to the above Form GST DRC-01A on 13th April, 2021. The representative came on 1st June 2021 and submitted his reply. Since, his reply and documents were not found satisfactory, GST DRC-01 & GST DRC-02 was issued on 1st September, 2021. The summary of the show cause specifically intimated that GST DRC-01 was issued on 1st September, 2021 and sent to him on e-mail. Petitioner neither submitted any explanation nor recorded its appearance during the proceedings under Section 73 of the JGST Act. Therefore, the concerned State Tax Officer after considering the documents available on record passed the Adjudication Order no. 9395 dated 1st November, 2021 under Section 73(9) of JGST Act. Pursuant thereto, GST DRC-07 was issued on the same date and uploaded on petitioner’s liability ledger portal. Since the petitioner did not deposit the tax, interest and penalty as determined vide order dated 1st November, 2021 and demanded under GST DRC-07 after the expiry of three months, the Department initiated recovery proceeding vide Form GST DRC-13 directing the petitioner’s Bank to pay a sum of Rs. 3,84,02,528 under Sections 78/79 of the JGST Act, 2017.

7. It is submitted by learned counsel for the respondent that the order under Section 73(9) of JGST Act was passed after providing all due opportunity to the petitioner and therefore, he ought to have availed the remedy of appeal.

8. Learned counsel for the respondents has however not been able to dispute that after submission of reply by the petitioner in Form GST ASMT-11, his reply was formerly rejected. Learned counsel for the respondent is also not in a position to dispute that apart from summary of the show cause notice issued in form GST DRC-01, no proper show cause notice was issued in terms of Section 73(1) of the Act upon the petitioner.

9. We have considered the submission of learned counsel for the parties, taken note of the materials placed from record and also the provision of law and judgments cited by the counsel for the petitioner. It is evident that in terms of Sections 70(4) & (5) in case an adverse order is to be passed against the assessee, the assessee is to be granted three opportunities to furnish reply, if the time is sought for. In the absence of proper show cause notice for furnishing reply, petitioner was prevented from taking his defence and submitting a proper reply to the show-cause notice. The adjudication order has been passed straightaway without following due procedure prescribed under Section 73 read with section 75(4) & (5) of the JGST Act. The aforesaid infirmities have vitiated the adjudication proceeding. The case of the petitioner is covered by the judgment rendered by this Court in the case of M/s. NKAS Pvt. Ltd. Vrs. State of Jharkhand reported in 2022 VIL 139 JHR and also R.K. Transport Pvt. Ltd. Vrs. The Union of India reported in 2022(2) TMI 1051. The ratio rendered by this Court in the case of M/s. NKAS at paragraphs 14 to 16 are extracted hereunder:

“14. We find that the show cause notice is completely silent on the violation or contravention alleged to have been done by the petitioner regarding which he has to defend himself. The summary of show cause notice at annexure-2 though cannot be a substitute to a show cause notice, also fails to describe the necessary facts which could give an inkling as to the contravention done by the petitioner. As noted herein above, the brief facts of the case do not disclose as to which work contract, services were completed or partly completed by the petitioner regarding which he had not reflected his liability in the filed return as per GSTR-3B for the period in question. It needs no reiteration that a summary of show cause notice in Form DRC-01 could not substitute the requirement of a proper show cause notice. At the same time, if a show cause notice does not specify the grounds for proceeding against a person no amount of tax, interest or penalty can be imposed in excess of the amount specified in the notice or on grounds other than the grounds specified in the notice as per section 75(7) of the JGST Act.

15. Learned counsel for the petitioner has relying upon the case of Bharti Airtel Ltd. (supra) and contended that the Apex Court has observed that the common portal of GSTN is only a facilitator. The format GST DRC-01 or 01A are prescribed format on the online portal to follow up the proceedings being undertaken against an assessee. They themselves cannot substitute the ingredient of a proper show cause notice. If the show cause notice does not specify a ground, the Revenue cannot be allowed to raise a fresh plea at the time of adjudication, as has been held by the Apex Court in a matter arising under Central Excise Act in the case of Shital International (supra) at para 19, extracted herein below:

“19. As regards the process of electrifying polish, now pressed into service by the Revenue, it is trite law that unless the foundation of the case is laid in the show-cause notice, the Revenue cannot be permitted to build up a new case against the assessee. (See Commr. of Customs v. Toyo Engg. India Ltd., CCE v. Ballarpur Industries Ltd. and CCE v. Champdany Industries Ltd.) Admittedly, in the instant case, no such objection was raised by the adjudicating authority in the show cause notice dated 22-6-2001 relating to Assessment Years 1988-1989 to 2000-2001. However, in the show-cause notice dated 12-12-2000, the process of electrifying polish finds a brief mention. Therefore, in the light of the settled legal position, the plea of the learned counsel for the Revenue in that behalf cannot be entertained as the Revenue cannot be allowed to raise a fresh plea, which has not been raised in the show-cause notice nor can it be allowed to take contradictory stands in relation to the same assessee.”

In a notice under Section 74 of the JGST Act, the necessary ingredients relating to fraud or willful misstatement of suppression of fact to evade tax have to be impleaded whereas in a notice under Section 73 of the same act the Revenue has to specifically allege the violations or contraventions, which has led to tax not being paid or short paid or erroneously refunded or Input Tax Credit 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 a vague show cause notice. That would entail violation of principles of natural justice. He can only do so, if he is told as to what the charges levelled against him are and the allegations on which such charges are based. Reliance is placed on the opinion of the Constitution Bench of the Apex Court in the case of Khem Chand versus Union of India [AIR 1958 SC 300], which has also been relied upon in the case of Oryx Fisheries P. Ltd. Vs. Union of India reported in (2010) 13 SCC 427 and profitably quoted in our decision rendered in the case of the same petitioner in W.P (T) No. 2444 of 2021.

16. We are thus of the considered view that the impugned show cause notice as contained in Annexure-1 does not fulfill the ingredients of a proper show cause notice and amounts to violation of principles of natural justice. The challenge is entertainable in exercise of writ jurisdiction of this Court on the specified grounds as clearly held by the decision of the Apex Court in the case of Magadh Sugar & Energy Ltd. Vrs. State of Bihar & others reported in 2021 SCC Online SC 801, para 24 and 25. Accordingly, the impugned notice at annexure-1 and the summary of show cause notice at annexure-2 in Form GST DRC-01 is quashed. This Court, however is not inclined to be drawn into the issue whether the requirement of issuance of Form GST ASMT-10 is a condition precedent for invocation of Section 73 or 74 of the JGST Act for the purposes of deciding the instant case. Since the Court has not gone into the merits of the challenge, respondents are at liberty to initiate fresh proceedings from the same stage in accordance with law within a period of four weeks from today”

10. It further appears that for the relevant tax period 2018-19 in view of the period of limitation prescribed in terms of Section 73(2) read with subsection 10, any fresh proceedings have not become barred.

11. Considering all these facts and circumstances and that the impugned proceedings leading to the adjudication order dated 1st November 2021 and the issuance of Garnishee notice dated 25.02.2022 are in violation of principles of natural justice and the procedure prescribed under the JGST Act, we are inclined to quash the summary of show cause notice contained in GST DRC-01; the adjudication order dated 1st November 2021; the summary of the order and demand notice contained in GST DRC-07 dated 01.11.2021 (Annexure-6) and also Garnishee notice dated 25.02.2022. Accordingly, they are quashed. The matter is remanded to the State Tax Officer, Dhanbad to initiate a fresh proceeding in accordance with law after issuance of proper show cause notice under Section 73(1) of JGST Act. Let it be made clear that we have not made any comments on the merits of the case of the parties whatsoever.

Accordingly, writ petition is disposed of in the manner and to the extent indicated hereinabove.