Diganta Kumar Deka vs. The State Of Assam And 2 Ors.

Held

The Court held that the Summary of the Show Cause Notice (DRC-01) and the attached tax determination do not substitute for a proper, authenticated Show Cause Notice required under Section 73(1) of the GST Acts. The Court found that the attachments lacked the necessary authentication by the Proper Officer, violating Rule 26(3) of the CGST Rules, 2017, which mandates digital or e-signatures until specific rules address this gap. Consequently, proceedings initiated solely based on such documents are not in conformity with the law. Regarding the second issue, the Court held that the impugned order contravened Section 75(4) of the GST Acts. The Court noted that the DRC-01 summary left the personal hearing date blank, and even if no reply was filed, an adverse order cannot be passed without granting an opportunity of hearing when contemplated, as this violates statutory mandates and principles of natural justice. The impugned order dated December 27, 2023, was set aside. The Court granted liberty to initiate de novo proceedings under Section 73 if deemed appropriate, excluding the period from the issuance of the Summary of SCN to the service of the judgment from the limitation period.

Facts

The petitioner, Diganta Kumar Deka, received a Summary of Show Cause Notice (DRC-01) on September 27, 2023, for the period July 2017 – March 2018. The petitioner claims no proper Show Cause Notice (SCN) was attached to the portal, leading to no reply being filed. Subsequently, an order (DRC-07) was passed on December 27, 2023, citing non-payment within 30 days. The petitioner contends that the attachments to DRC-01 and DRC-07 were not authenticated by the Proper Officer's signature, violating Rule 26 of the CGST Rules, 2017. Furthermore, the SCN summary did not mention a hearing date, and the petitioner was not afforded an opportunity of hearing as mandated by Section 75(4) of the GST Acts.

Key Issues

1. Whether the determination of tax attached to the Summary of Show Cause Notice (DRC-01) and the Summary of Order (DRC-07) qualify as a valid Show Cause Notice and Order respectively under Section 73(1) and Section 73(9) of the State GST Act? The petitioner argued that the attachments were not proper SCNs as they did not require the petitioner to show cause and lacked the Proper Officer's signature, citing Telangana High Court in M/s Silver Oak Villas LLP vs. Assistant Commissioner ST. The revenue contended that the determination of tax provided all necessary details for a reply. 2. Whether the impugned orders under Section 73(9) of the State Act are in conformity with Section 75(4) of the State Act and the principles of natural justice? The petitioner argued that Section 75(4) mandates an opportunity of hearing when an adverse decision is contemplated, irrespective of a written request, citing Chhattisgarh High Court in Mahindra & Mahindra Limited vs. Union of India. The revenue acknowledged the lack of separate SCN and signatures but argued that portal authentication sufficed and the determination of tax was sufficient information.