Patna High Court Permits Statutory Appeal Against GST Demand Order Under Section 73(9): Royal Bricks Works Case
Case Overview
Case Name: Royal Bricks Works Vs Union of India
Court: Patna High Court
Nature of Proceedings: Writ Petition disposed of with liberty to file statutory appeal
The Patna High Court recently dealt with a writ petition filed by Royal Bricks Works challenging a show cause notice and a demand order issued under the GST framework for the financial year April 2018 to March 2019. Rather than adjudicating on the merits of the constitutional challenge, the Court granted the petitioner liberty to pursue the statutory appellate remedy and disposed of the matter accordingly.
Background of the Dispute
Royal Bricks Works, the assessee in this matter, received a show cause notice dated 02.12.2023 followed by a demand order dated 29.04.2024, both issued under Section 73(9) of the BGST/CGST Act, 2017. The demand pertained to tax, interest, and penalty amounting to:
- Rs. 11,13,212 under the BGST
- Rs. 11,13,212 under the CGST
- Aggregate demand: Rs. 22,26,424
The order was passed by the Assistant Commissioner of State Tax, Jamui Circle, Jamui, and the assessee approached the Patna High Court by way of a writ petition seeking quashing of both the notice and the demand order on several grounds.
Grounds Raised by the Assessee
The assessee raised a comprehensive set of legal challenges against the impugned proceedings. The key grounds are discussed below:
1. Absence of Digital Signatures on Notices and Orders
The assessee contended that the show cause notice (Process No. NIL dated 02.12.2023), the summary of the show cause notice (Reference No. ZD1012230019062 dated 02.12.2023), the demand order (Process No. NIL dated 29.04.2024), and the summary of the demand order in Form GST DRC-07 (Reference No. ZD1004240379996 dated 29.04.2024) were all issued without digital signatures.
It was argued that this omission constituted a direct violation of:
Rule 26(3)of the BGST/CGST Act and Rules, 2017- Instruction No. 04/2023-GST dated 23.11.2023 issued by the concerned respondent authority
The assessee's position was that unsigned official communications lack legal sanctity and are therefore liable to be quashed.