Held by the Hon’ble Chattishgarh High Court
In the matter of
Golden Cargo Movers vs. State Of Chhattisgarh (2025:CGHC:51354)
The petitioner received a show cause notice in Form GST DRC-01 u/s 73 of the Act for the period of April 2018 to March 2019, asking why tax and interest to the extent of INR 1.32 crores should not be imposed. The final assessment order in Form GST DRC-07 was issued imposing tax, interest, and a penalty of INR 5.00 crores. Consequently, for recovery of the amount determined in form GST DRC-07, the respondent issued an order of attachment of the bank account and immovable property. Aggrieved by the order, the petitioner filed the appeal.
The Petitioner contended that the demand as per the final assessment order was higher than the amount mentioned in form GST DRC-01, which is against the provisions of Section 75(7) of the Act. Since the final assessment order is against the provision of the Act, hence, the impugned assessment order may be set aside/quashed along with other attachment orders.
Hon’ble High Court held Section 75(7) specifically stipulates that the amount of tax, interest, and penalty demanded in the order shall not be in excess of the amount specified in the notice, and no demand shall be confirmed on the grounds other than the grounds specified in the notice. However, in the given case, a show-cause notice was issued for Rs. 1.32 Crores, but a final assessment order was passed for a total amount of INR 5.00 crores. Therefore, the impugned order is contrary to the provisions under Section 75(7) of the Act.
Accordingly, the impugned order in form GST DRC-07, as well as consequential orders of attachment of Bank Account and Immovable property, are set aside/quashed.
Article:
1. Brief facts of the case:
- M/s Golden Cargo Movers (“The Petitioner”) received a show cause notice under Section 73 of the CGST Act, 2017, in form GST DRC-01 from April 2018 to March 2019;
- The notice called upon the petitioner as to why tax and interest to the tune of INR 1.32 Crores should not be imposed.
- The petitioner mentioned that such notice was uploaded on the portal under the tab ‘Additional Notice and Order’, and it was also communicated to the petitioner.
- Since the petitioner did not deposit the aforesaid amount, therefore, a final order was issued under Section 73 of the Act in form GST-DRC- 07 against the petitioner imposing tax and penalty to the tune of Rs. 5.00 crores.
- Therefore, the petitioner filed such an appeal against the order issued in Form GST DRC-07.
2. Relevant Legal Extracts
Relevant provisions of the Act are reiterated below for ready reference:
- Section 75(5) of the Act is reiterated below:
““(7) The amount of tax, interest, and penalty demanded in the order shall not be in excess of the amount specified in the notice, and no demand shall be confirmed on the grounds other than the grounds specified in the notice.”
3. Contention of the Petitioner:
The petitioner contended that:
- The final assessment order was passed for INR 5.00 crores, which is higher than the amount mentioned in the DRC-01/demand notice, which is against the provisions of Section 75(7) of the Act.
- Further, in pursuance of the impugned order, the respondent issued attachment orders of the Bank Account of the petitioner as well as an order of attachment of immovable property.
- Since, final assessment order is against the provision of the Act, hence, the impugned assessment order may be set aside/quashed along with other attachment orders.
4. Contention of the Respondent:
The Respondent contended that:
- The petitioner has filed an Annual GST Return for the financial year 2018-19, under Heading 9965 (Goods transport services), claiming his services to be Goods Transport Service, but when the Annual GST Return was scrutinized, then it was found that the service provided by him falls under Heading 9967 (Supporting services in transport), which is a supporting service in transport.
- Further, in the Annual GST Return filed by the petitioner, he had sought complete exemption for the payment of GST, but since the services provided by the petitioner were found to be under Heading 9967 (Supporting services in transport), therefore, the GST was leviable @ 18% (9%CGST and 9% SGST).
- Therefore, in the final assessment order, GST payable was determined of INR 5.00 crores as he failed to file any document to substantiate the exemption claimed by him.
- Further, since the final assessment order in form GST DRC-07 was not complied with by the petitioner, therefore, attachment orders of Bank Account and attachment order of Immovable property have been passed.
5. Findings and Analysis by Hon’ble High Court:
Hon’ble High Court made the following findings and analysis:
- Section 75 of the Act deals with general provisions relating to the determination of tax, and sub-section (7) specifically stipulates that the amount of tax, interest, and penalty demanded in the order shall not be in excess of the amount specified in the notice, and no demand shall be confirmed on the grounds other than the grounds specified in the notice.
- However, in the given case, the show-cause notice claimed tax amount coupled with interest to the tune of Rs. 1.32 Crores, but the final assessment order was passed for total tax amount including interest and penalty of INR 5.00 crores.
- Therefore, it is clear that the final assessment order of tax amount payable by the petitioner was more than the amount as stated in the DRC-01, which is contrary to the provisions under Section 75(7) of the Act.
- Therefore, on account of violation of provisions of Section 75(7) of the Act, the impugned order in form GST DRC-07, as well as consequential orders of attachment of Bank Account and Immovable property, are set aside/quashed.
6. Conclusion:
The Hon’ble High Court held that:
- As the Final Assessment Order in form GST DRC-07 was issued in violation of provisions of Section 75(7) of the Act, therefore, the Impugned Assessment order and consequential order of attachment of bank account and immovable property are liable to be set aside.
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