SECTION 74 CAN NOT INVOKE IF SUPRESSION OF FACTS ARE NOT PRESENT

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SECTION 74 CAN NOT INVOKE IF SUPRESSION OF FACTS ARE NOT PRESENT

26/03/2025

SECTION 74 CAN NOT INVOKE IF SUPRESSION OF FACTS ARE NOT PRESENT

The petitioner has preferred these writ petitions challenging the impugned order in Form GST DRC-07 along with the consequential rejection order of the rectification applications.

The learned counsel for the petitioner submits that the petitioner is a proprietorship concern engaged in the business of construction and works contract services.

The respondents conducted a surprise inspection on 12.01.2024 and issued Form DRC-01 dated 14.06.2024, pointing out certain defects concerning the Input Tax Credit (ITC) availed and the turnover reported by the petitioner.

Subsequently, a reminder notice was issued on 19.07.2024, scheduling a personal hearing for 26.07.2024.
In response, the petitioner submitted an adjournment letter dated 01.08.2024, requesting additional time to file a reply with supporting documents.

However, without considering this request, the third respondent passed the order in Form GST DRC-07 dated 23.07.2024, confirming the demand proposed in the show-cause notice under Section 74 of the CGST Act.

The main grievance of the petitioner is that the respondent conducted an inspection for the financial year 2019 – 2020, involving a very similar set of facts and issues.

For this, the petitioner had filed a rectification application against the order dated 23.08.2024, which was allowed by the same authority and the demands confirmed in the order were dropped.

However, the rectification application for the subsequent years, involving the same set of facts, was rejected without providing any reasons.

Therefore, the learned counsel submits that the impugned orders were passed in violation of the principles of natural justice and are liable to be set aside.

The learned Government Advocate submits that the show-cause notice dated 14.06.2024 was issued to the petitioner, fixing the dates for filing a reply and personal appearance on 08.08.2024 and 16.08.2024.
Since the petitioner failed to appear for the personal hearing, impugned order was passed on the premise that no reply was filed.

Heard the learned counsel for the parties and perused the materials available on record.

On perusal of records, it is seen that the respondent issued a show-cause notice dated 14.06.2024, calling upon the petitioner's reply and fixing date of personal hearing on 16.08.2024.

The said show cause notice was issued on account of certain defects noticed in excess ITC availed by the petitioner and for suppression of turnover. Thereafter, the petitioner filed an adjournment letter seeking time to file a detailed reply along with relevant documents.

However, the respondent without considering the same, passed the impugned order.

Thus, this Court is of the view that the impugned order suffers from violation of principles of natural justice.

Hence, this Court is inclined to set aside the impugned order.

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