Intimation Under Form DRC-01A Is Mandatory, Notwithstanding Use Of Word ‘may’ In Rule 142(1A)

Observing that statutory provision contained in the principal legislation that is Section 74(5) of the CGST Act, 2017, is mandatory, the Allahabad High Court has held that the use of the word ‘may’ in Rule 142(1A) of the CGST Rules must be given the same interpretation. According to the Court, the provisions of Rule 142(1A) must be read in conjunction with Section 74(5). 

Revenue department’s submission that since the word ‘may’ has been substituted for the word ‘shall’ in Rule 142(1A) the provision is now directory, was thus rejected.

As per Rule 142(1A), the Department has to communicate in Form DRC-01A the details of tax, interest and penalty to the person before issuance of notice. Section 74(5) provides for payment of tax, interest and 15% penalty by the person chargeable with tax before service of notice.