Facts of the Case

M/s Rahman Sales, a proprietorship trading concern in Ranchi, challenged an order contained in Form GST DRC-07 dated 14.03.2019 pertaining to the period 2017-18, the preceding Form GST DRC-01 dated 10.12.2018, and the proceedings following an inspection conducted at its premises on 01.12.2018 in the petitioner's absence. The petitioner's case was that no proper notice in Form DRC-01 was received online, and that the DRC-07 summary order was issued at what was claimed to be an invalid reference number. It was further contended that the docket sheet maintained by the department itself showed that the DRC-07 was uploaded with delay due to a technical error, and that an email dated 14.03.2019 asking the petitioner to check the portal did not carry the order as an attachment, nor was the order ever actually made available on the portal.

Issues Involved

  1. Whether the department had discharged its obligation to properly communicate/upload the Form GST DRC-07 order to the petitioner.
  2. Whether failure to establish timely upload or communication of the order vitiates the assessment on grounds of violation of natural justice.

Petitioner's Arguments

  • No proper Show Cause Notice/DRC-01 was received online prior to the DRC-07 order.
  • A mandatory pre-show cause notice in Form GST DRC-01A under Section 73(1) of the JGST Act was never issued.
  • The DRC-07 order was issued at an invalid reference number, and the docket sheet showed the order was uploaded with delay due to a technical glitch.
  • The intimation email dated 14.03.2019 did not carry the order as an attachment, and the order was never actually accessible on the portal.

Respondent's Arguments

  • There was a delay in uploading Form DRC-07 owing to a technical glitch, but the counter affidavit did not specify the actual date on which the order was uploaded.
  • The adjudication order was passed following the procedures under the JGST Act, 2017.

Court Order / Findings

  • The Court held it is the duty of the department to upload the order on the portal or otherwise communicate it to the assessee, and the respondents failed to show when the DRC-07 order was actually made available.
  • In the absence of any statement as to the date of actual upload, and given the docket entries indicating non-upload on the date of passing, the Court held there was violation of the principles of natural justice on account of non-supply of the order.
  • The DRC-07 order dated 14.03.2019 and consequential proceedings were set aside and the matter remitted to the department to supply a copy of the order, provide a hearing, and pass a fresh order in accordance with law.

Important Clarification

  • Mere passing of an order under GST law is not sufficient service — the department must be able to demonstrate the actual date of upload/communication of the order to the assessee.
  • A gap between the date an order is signed and the date it is actually made accessible to the assessee, if unexplained, can itself amount to a natural justice violation warranting the order being set aside.

Sections Involved

  • Section 73, Jharkhand GST Act, 2017 — determination of tax not paid or short paid for reasons other than fraud.
  • Form GST DRC-01/DRC-01A/DRC-07 — summary of show cause notice, pre-show cause intimation, and summary of the demand order respectively.

Decision – In Favour of

The writ petition was allowed in favour of the Assessee, with the DRC-07 order and consequential proceedings set aside and the matter remitted for fresh adjudication after proper service and hearing.

Case Details

Court: High Court of Jharkhand at Ranchi
Case No.: W.P.(T) No. 1309 of 2024
Coram: Hon'ble the Chief Justice M.S. Ramachandra Rao and Hon'ble Mr. Justice Rajesh Shankar
Date of Order: 01.05.2025

Link to Download the Order

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