No, the Honorable Himachal Pradesh High Court in the case of M/s. Microtek Himachal Power Products (P.) Ltd. v. State of Himachal Pradesh [CWP No. 5562 of 2023 dated June 26, 2024] disposed the writ petition and directed that the erroneous order passed with the wrong description be treated as Show Cause Notice and be further adjudicated upon after the filing of reply to the deemed SCN.
The Honorable court noted that the order dated June 20, 2023 is issued in Form GST DRC-01 passed under Section 74(9) of the Central Goods and Services Act and it is contented that no prior SCN has been issued before the passing of the Impugned order mandated under Section 74(1) of the CGST Act and thereby the Impugned Order passed is in violation of principles of natural justice. The Honorable Court noted that the Revenue Department contended that there has been an error on the part of the Respondent officer, as the portion of the SCN has been mentioned as if there is the determination of tax, interest, and penalty.
The Honorable High Court accepted the submissions made by the Respondent and directed that the Impugned Order shall be treated as SCN issued to the Petitioner. Further, the Honorable High Court directed petitioner to file the reply to the deemed SCN within the period of four weeks.
Author’s Comments
Approaching a writ court under Article 226 or Article 32 of the Constitution of India must be a strategic and well-thought decision. If the Honorable Court remands back the case for the second round of adjudication and the notice is not vacated, then it turns out to be a fruitless exercise unable to fetch the desired relief.
It is not always that suffering an ex-parte order will be disastrous. Most of the times, ex parte orders without a reply by taxpayers, are not sustainable on facts and law. Moreover, every mistake of the Revenue cannot become ground to vacate notice and achieve the desired outcome. In the instant case, the petitioner could have disputed the adverse order because “Due Process” of law demands, (i) pre-notice consultations in DRC-01A conducted and concluded; (ii) notice served; (iii) reply received; (iv) personal hearing conducted and concluded; and (v) adjudication completed by passing speaking order. Any departure from ‘due process’ in law causes prejudice to the taxpayer’s rights, remedies and safeguards. And this itself can be a ground to fetch the desired relief in appeal or judicial review. Passion to protect the interest of revenue does not authorize the by-passing of the law.
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