Harish Kumar Kayal v. Additional Commissioner, GST & Central Excise, Commissionerate & Anr

Introduction

This interim order of the Orissa High Court raises two important legal issues under GST law:

1. Whether failure to communicate the pre-show cause notice intimation in Form GST DRC-01A under Rule 142(1A) vitiates proceedings initiated under Section 74 of the CGST Act; and
2. Whether penalty under Section 122(2)(b), read with the amended provisions introduced by the Finance Act, 2020 (effective from 01.01.2021), can be imposed for tax periods prior to the amendment (July 2017 to March 2019).

The Court found that both issues required detailed examination and therefore granted interim protection by directing the petitioner to deposit 20% of the tax demand, while restraining the Department from taking coercive recovery action until the next date of hearing.