Intimation cannot be given in Form DRC-01 it should be in DRC-01A; HC quashed intimation

Case Details: Agrometal Vendibles (P.) Ltd. V. State of Gujarat - [2022] 137 taxmann.com 362 (Gujarat)

Judiciary and Counsel Details

• • J.B. Pardiwala and Ms. Nisha M. Thakore, JJ.
  • Ms. Dimple K. Gohil for the Petitioner. 
  • Utkarsh Sharma for the Respondent.

Facts of the Case

An intimation against the appellant was issued by the adjudicating authority in Form GST DRC-01 alleging that inadmissible input tax credit has been availed which is to be paid along with interest and penalty, otherwise recovery action shall be initiated against him.

The Form GST DRC-01 is a summary of a show-cause notice whereas Form GST DRC-01A is an intimation issued before a Show cause notice. If the taxpayer agrees with the contention of the department, then he may pay its liability as per the intimation. If he fails to pay the same, a proper show cause notice is required to be issued by the adjudicating authority.

In the given case, the intimation was issued with a clear mention that if a taxpayer fails to pay the same, recovery proceedings would be initiated against him. In other words, the intent of the intimation is that no proper adjudication would be carried out.

High Court Held

The Hon’ble Gujarat High Court quashed the intimation stating that an intimation should be issued in GST DRC-01A and not in GST DRC-01. Moreover, DRC-01A is just a means of communication before issuance of show cause notice and the proper officer cannot threaten the appellant with recovery action in the notice of intimation.