Ms Ganapati Enerprise And Anr vs. The State Of Assam And Ors

Facts

The petitioner, Ms Ganapati Enterprise, represented by its proprietor Sri Bhargab Saikia, challenged an order dated 28.04.2024 passed by the Assistant Commissioner of State Tax, Nagaon (Respondent No. 3). The petitioner contended that this order was passed without issuing a show cause notice under Section 73(1) of the CGST Act, 2017, and without providing an opportunity for a hearing. The petitioner had requested a hearing, but it was allegedly not granted before the summary of the order was issued. The respondents are the State of Assam and its tax authorities, as well as the Central Board of Indirect Taxes and Customs.

Held

The Court held that the Summary of Show Cause Notice in GST DRC-01 is not a substitute for a Show Cause Notice required under Section 73(1) of the CGST Act and the State Act. The Proper Officer must issue a formal Show Cause Notice to initiate proceedings under Section 73. Furthermore, the Court found that the impugned order violated Section 75(4) as no opportunity of hearing was provided to the petitioner. Relying on the judgment in Construction Catalysers Pvt. Ltd. (supra), the Court set aside and quashed the impugned order dated 28.04.2024 and the summary of show cause notice dated 13.12.2023. 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 of show cause notices to the date of service of the judgment on the Proper Officer 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, along with an attached Statement of Determination of Tax under Section 73(3) of the CGST Act, 2017, constitutes a valid Show Cause Notice as required by Section 73(1) of the CGST Act, 2017, and the corresponding State Act? 2. Whether the impugned order passed by the Assistant Commissioner of State Tax, Nagaon, is bad in law for being passed without a proper show cause notice and without affording an opportunity of hearing as mandated by Section 73(1) and Section 75(4) of the CGST Act, 2017, and the State Act? The petitioner argued that the order was passed without a proper show cause notice and without an opportunity of hearing, violating Section 73(1) and Section 75(4) of the CGST Act. The revenue (respondents) did not record any specific arguments but agreed that the issue was similar to a previously decided case, Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others.