Phanidhar Borsaikia vs. The State Of Assam And 2 Ors.

Facts

The petitioner, Phanidhar Borsaikia, challenged a summary of show cause notice dated 29.11.2024 and a summary of order dated 27.02.2025 issued by the Assistant Commissioner of State Tax, Dhemaji. The petitioner contended that these were issued without a proper show cause notice under Section 73(1) of the CGST Act, 2017, and without providing an opportunity for a hearing. The respondents, represented by the State of Assam and its tax authorities, filed an affidavit acknowledging that no show cause notice in terms of Section 73(1) was issued, only a summary. Both parties agreed that the issue was identical to a previous case, WP(C) No. 3912/2024 (Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others).

Held

The Court held that the 'Summary of the Show Cause Notice' in GST DRC-01 is not a substitute for a Show Cause Notice required under Section 73(1) of the Central and State Acts. The Proper Officer must issue a formal Show Cause Notice to initiate proceedings under Section 73. Similarly, the 'Statement of determination of tax' attached to the summary cannot replace the mandatory Show Cause Notice. The Court further found that the impugned orders violated Section 75(4) as no opportunity of hearing was provided. Consequently, the Court quashed the summary of show cause notice and the summary of order. In the interest of justice, the Court 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 show cause notice to the date of service of the judgment for computing the time limit under Section 73(10).

Key Issues

1. Whether the issuance of a 'Summary of Show Cause Notice' in GST DRC-01, without a formal Show Cause Notice under Section 73(1) of the CGST Act, 2017, and the State Act, is legally valid for initiating proceedings under Section 73. 2. Whether a 'Statement of determination of tax' attached to the 'Summary of Show Cause Notice' can substitute the requirement of a Show Cause Notice under Section 73(1). 3. Whether the issuance of a 'Summary of order' without passing a formal order under Section 73(9) of the CGST Act, 2017, and the State Act, and without providing an opportunity of hearing, violates Section 75(4) of the Act. Petitioner's arguments: The petitioner argued that the authorities failed to issue a proper show cause notice as mandated by Section 73(1) and denied an opportunity of hearing, rendering the summary of order illegal. They relied on the principles laid down in the judgment of Construction Catalysers Pvt. Ltd. Revenue's arguments: The respondents conceded that no show cause notice in terms of Section 73(1) was issued, only a summary. They did not present arguments against the petitioner's contentions but agreed to be bound by the previous judgment.