Jay Prakash Sharma vs. The State Of Assam And Ors

Facts

The petitioner, Jay Prakash Sharma, is challenging the actions of the Assistant Commissioner of State Tax. The petitioner contends that the Assistant Commissioner issued a summary of show cause notice dated 05.12.2024 without first issuing a proper show cause notice under Section 73(1) of the CGST Act, 2017. Furthermore, the petitioner alleges that a summary of order dated 24.04.2024 was issued without passing a formal order under Section 73(9) of the CGST Act, 2017. The petitioner also claims that an opportunity of hearing was denied before the summary of the order was passed. Both parties agreed that the issue is similar to a previous case, Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others, decided on 26.09.2024.

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 Show Cause Notice to initiate proceedings under Section 73. Similarly, a Statement of determination of tax under Section 73(3) cannot substitute the Show Cause Notice. The Court found that the initiation of proceedings under Section 73 without a proper Show Cause Notice was bad in law. Furthermore, the Court noted that the impugned orders violated Section 75(4) as no opportunity of hearing was provided. Consequently, the impugned orders were set aside and quashed. 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 until the certified copy of the judgment is served upon the Proper Officer, for computing the period prescribed under Section 73(10).

Key Issues

1. Whether the issuance of a Summary of Show Cause Notice in GST DRC-01, without a proper Show Cause Notice under Section 73(1) of the CGST Act, 2017, is legally valid? 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) of the CGST Act, 2017? 3. Whether an order under Section 73(9) of the CGST Act, 2017, can be issued without following the due process, including providing an opportunity of hearing as mandated by 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 mandatory procedural requirements of Section 73(1) and Section 73(9) of the CGST Act, 2017, respectively. They also contended that the denial of an opportunity of hearing violated Section 75(4) of the Act. Revenue's Arguments: The respondent authorities did not present separate arguments but agreed that the issue was covered by the decision in Construction Catalysers Pvt. Ltd. (supra).