Bitupon Doley vs. The State Of Assam And 2 Ors.

Facts

The petitioner, Bitupon Doley, challenged the summary of show cause notice dated December 12, 2023, and the summary of order dated April 22, 2024, issued by the Assistant Commissioner of State Tax, Jorhat-6. 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 acknowledged that a show cause notice in terms of Section 73(1) was not issued. Both parties agreed that the issue was identical to a previous case, Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others, decided by a Co-ordinate Bench.

Held

The Court held that the 'Summary of the Show Cause Notice' in GST DRC-01 is not a substitute for the 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 the determination of tax' under Section 73(3) cannot substitute the Show Cause Notice. The Court found that the initiation of proceedings and passing of orders without a proper Show Cause Notice and without providing an opportunity of hearing (in violation of Section 75(4)) are bad in law. Relying on the judgment in Construction Catalysers Pvt. Ltd., the Court set aside the impugned summary of show cause notice and summary of order. The Court granted liberty to the respondent authorities to initiate de novo proceedings under Section 73, if deemed fit, and directed that the period from the issuance of the summary of show cause notices until the judgment's service be excluded 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 the 'Statement of determination of tax' attached to the Summary of Show Cause Notice can substitute the mandatory requirement of a Show Cause Notice under Section 73(1)? 3. Whether the issuance of a summary of order under Section 73(9) without providing an opportunity of hearing to the assessee violates Section 75(4) of the CGST Act, 2017? Petitioner's Arguments: The petitioner argued that the summary of show cause notice and summary of order were issued without adhering to the procedural requirements of Section 73(1) and Section 73(9) of the CGST Act, 2017, and without granting an opportunity of hearing, thus rendering the proceedings bad in law. Revenue's Arguments: The respondents admitted that a formal show cause notice under Section 73(1) was not issued, but indicated that a summary of show cause notice was provided.