Recovery Notice Held Invalid as Adjudication Proceedings Suffered from Material Irregularity and are Bad in Law | HC

Case Details: Aditya Medisales Ltd. v. State of Jharkhand - [2023] 156 taxmann.com 323 (Jharkhand)

Judiciary and Counsel Details

• • Rongon Mukhopadhyay & Deepak Roshan, JJ.
  • M.S. Mittal, Sr. Adv. & Salona Mittal, Adv. for the Petitioner.
  • A.K. Yadav & Ranjan Kumar for the Respondent.

Facts of the Case

Recovery notice was issued against the petitioner in respect of the transitional credit claimed by him. It filed a writ petition against the same. The petitioner contended that the department issued a summary Order for demanding the transitional credit claimed by it and no detailed order was issued. Further, when the petitioner applied a detailed order sheet, the department only served a summary show cause notice in Form DRC-01 and no detailed notice was provided.

Thereafter, the petitioner preferred an appeal u/s 107 of the CGST Act, 2017 and the Appellate Authority partially rejected the transitional claim. It further contended that the Appellate Tribunal has not yet been formed, hence, as per a circular, the time limit for filing the second appeal has not yet been commenced. The respondent authorities, thereafter, issued a recovery notice.

High Court Held

High Court noted that the show cause notice did not fulfill the ingredients of the SCN. Also, only a summary Order was issued in Form GST DRC-07. Further, the credit disallowed by the Appellate Authority is not contended by the respondent. Hence, the recovery notice is liable to be set aside. It further stated that even if the amount is found recoverable after the assessment is done, the same is recoverable under the GST laws, hence the interest of the revenue is also safeguarded.