Prolay Dey Sarkar vs. The State Of Assam And 2 Ors.

Held

The Court held that the Summary of Show Cause Notice in Form GST DRC-01, accompanied by an 'Attachment to Determination of Tax', does not fulfill the requirement of a proper and prior Show Cause Notice as contemplated under Section 73(1) of the Assam Goods and Services Tax Act, 2017, and Rule 142(1)(a) of the Assam Goods and Services Tax Rules, 2017. The Court reasoned that the issuance of a Summary of Show Cause Notice is not a substitute for the mandatory Show Cause Notice required to initiate proceedings under Section 73. Furthermore, the Court noted that the impugned order was also in violation of Section 75(4) of the Act, as no opportunity of hearing was provided, thus contravening principles of natural justice. Following the precedent set in a previous judgment by a co-ordinate bench, the Court found the impugned order unsustainable. The Court quashed the impugned order dated 18.04.2024 and granted liberty to the respondent authorities to initiate de novo proceedings under Section 73 if deemed fit, excluding the period from the issuance of the Summary of Show Cause Notices to the date of service of the judgment for computing the time limit for passing the order.

Facts

The petitioner, Prolay Dey Sarkar, engaged in the business of confectionary items under the name M/s Maa Laxmi Enterprise, registered under the GST regime, challenged an order dated 18.04.2024 passed by the Assistant Commissioner of State Tax, Goalpara. The petitioner contended that the order, purportedly passed under Section 73 of the Assam Goods and Services Tax Act, 2017, was invalid because it was based on a Summary of Show Cause Notice in Form GST DRC-01, and not a proper and prior Show Cause Notice as prescribed by Section 73(1) read with Rule 142(1)(a) of the Act and Rules. The petitioner also argued that the order was not in conformity with Section 75(4) of the Act, violating principles of natural justice.

Key Issues

1. Whether the Summary of Show Cause Notice in Form GST DRC-01, along with an 'Attachment to Determination of Tax', constitutes a valid Show Cause Notice as required by Section 73(1) of the Assam Goods and Services Tax Act, 2017, read with Rule 142(1)(a) of the Assam Goods and Services Tax Rules, 2017? Petitioner's arguments: The petitioner argued that a Summary of Show Cause Notice is not a substitute for a proper and prior Show Cause Notice as mandated by Section 73(1) and Rule 142(1)(a). They relied on a previous judgment of the Gauhati High Court in a batch of writ petitions (W.P.[C] no. 3912/2024 and others) which held that proceedings initiated without a proper Show Cause Notice are bad in law. Revenue's arguments: The Standing Counsel for the Finance & Taxation Department fairly submitted that the common judgment and order dated 26.09.2024, which addressed similar issues, was passed after hearing all sides and its observations would cover the petitioner's case.