Soidur Rahman vs. The State Of Assam And 3 Ors.

Held

The Court held that the Summary of Show Cause Notice (GST DRC-01) does not substitute for a proper Show Cause Notice required under Section 73(1) of the GST Acts. The attachment detailing tax determination under Section 73(3) cannot be treated as a valid SCN, and initiating proceedings based solely on it is unlawful. Furthermore, the SCN, Statement, and final Order under Section 73(9) must be issued by the Proper Officer and properly authenticated according to Rule 26(3) of the CGST Rules, 2017. The summaries (DRC-01, DRC-02, DRC-07) are supplementary and cannot replace primary authenticated documents. The Court also found that the impugned order contravened Section 75(4) of the Act, which mandates a reasonable opportunity of hearing when an adverse decision is contemplated. The absence of a hearing date in the DRC-01 summary and the subsequent passing of an adverse order without granting a hearing violated statutory requirements and principles of natural justice. The impugned order was set aside, with liberty granted to the respondents 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.

Facts

The petitioner, Soidur Rahman, received a Summary of Show Cause Notice (GST DRC-01) on December 12, 2023, for the tax period April 2018 – March 2019, along with an attachment detailing tax determination. The petitioner did not file a reply, alleging that a proper Show Cause Notice was not attached to the portal. Subsequently, an order dated April 28, 2024 (GST DRC-07) was passed, citing the petitioner's failure to pay within 30 days. The petitioner contended that both the attachment to GST DRC-01 and the order in GST DRC-07 were not authenticated by the Proper Officer's signature. The High Court had previously directed the respondents to clarify whether proper Show Cause Notices were issued, to which no positive response was provided.

Key Issues

1. Whether a valid Show Cause Notice (SCN) was issued prior to the impugned order under Section 73(9) of the State Act? The petitioner argued that the attachment to GST DRC-01 was not a valid SCN as it lacked a show cause requirement and the Proper Officer's signature, violating Rule 142 and Rule 26 of the Rules of 2017. The revenue contended that the determination of tax attached to the summary provided sufficient details for the petitioner to reply. 2. Whether the determination of tax and the order attached to the summaries in GST DRC-01 and GST DRC-07 qualify as the SCN and the final order respectively? The petitioner argued that these summaries were supplementary and could not replace formal, authenticated documents. The revenue submitted that the summaries, when uploaded, were digitally authenticated. 3. Whether the impugned order under Section 73(9) of the State Act conforms to Section 75(4) of the State Act and the principles of natural justice? The petitioner contended that the SCN summary did not mention a hearing date, and Section 75(4) mandates an opportunity of hearing when an adverse decision is contemplated, irrespective of a request. The revenue did not offer a specific counter-argument on this point, beyond stating that the determination of tax provided details.