If proper officer passed demand order in Form DRC-07 directly after issuance of intimation of show cause notice in Form DRC-01A, then demand order is bad in law because it is mandatory to issue show cause notice in Form GSTR DRC-01.
Read in detail about the case V.R.S. Traders Vs Assistant Commissioner (State Taxes) Poonamallee, HC-Madras below:
Facts of the Case
- Notice in Form DRC-01A under Rule 142(1) of the CGST Rules was issued on 15.10.2020 and 16.10.2020.
- The petitioner had given a reply on 19.10.2020 not accepting the proposal issued under the notice in DRC-01A.
- Thereafter, demand order in Form GST-DRC-07 came to be issued.
Submissions of the Petitioner
- The next procedure to be followed by the Revenue is that under Section 74(1) of the CGST Act, further notice in DRC-01 should have been issued and an opportunity should have been given.
Observations of the Court
- Section 74(1) notice is an independent notice to be issued in DRC-01, whereas the notice under Section 74(5) was to be issued in DRC- 01A. Herein the case in hand, admittedly DRC-01A was issued, thereafter straightaway the respondent revenue proceeded to pass the impugned assessment order.
Order
- The DRC-01 notice under Section 74(1) of the Act, which is also mandatory to be issued before passing the impugned order of assessment has not been issued in this case. In the absence of any such notice, the proceedings, which is culminated in the order of assessment, which is impugned herein, is, no doubt, vitiated.
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