M/S Rameswar Steels vs. The State Of Assam And 2 Ors.

Facts

The petitioner, M/s Rameswar Steels, challenged the actions of the Assistant Commissioner of State Tax (Respondent No. 3). The petitioner contends that the respondent issued a summary of show cause notice dated 13.09.2024 and a summary of order dated 05.10.2024 without first issuing a proper show cause notice under Section 73(1) of the CGST Act, 2017, and without passing an order under Section 73(9) of the CGST Act, 2017. The petitioner further states that an opportunity of hearing was not provided before the summary of the order was passed. Both parties agreed that the issue was identical to one decided by a Co-ordinate Bench in a previous case, Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others.

Held

The Court held that the Summary of the Show Cause Notice (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 determination of tax (Section 73(3)) cannot substitute for the Show Cause Notice. The issuance of summaries of these documents does not dispense with the statutory requirement of issuing proper notices and passing orders as per Section 73. The Court also found that the impugned orders violated Section 75(4) as no opportunity of hearing was granted. Consequently, the impugned orders were set aside and quashed. The Court, in the interest of justice, allowed 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 Summary of the Show Cause Notice in GST DRC-01, as issued by the Proper Officer, can substitute for a formal Show Cause Notice required under Section 73(1) of the Central and State GST Acts? 2. Whether the Statement of determination of tax, attached to the Summary of Show Cause Notice, can substitute for the Show Cause Notice itself under Section 73(1)? 3. Whether the issuance of a Summary of Show Cause Notice, Summary of Statement, and Summary of Order dispenses with the requirement of issuing a proper Show Cause Notice, Statement, and passing of an Order as mandated by Section 73 by the Proper Officer, and if such issuances require authentication under Rule 26(3) of the Rules of 2017? 4. Whether the impugned orders, which were passed without providing an opportunity of hearing, are in violation of Section 75(4) of the CGST Act, 2017? Petitioner's arguments: The petitioner argued that the respondent authorities failed to issue a proper show cause notice under Section 73(1) and did not provide an opportunity of hearing before passing the summary of the order, rendering the proceedings bad in law. They relied on the principles laid down in the judgment of Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others. Revenue's arguments: The judgment records no specific arguments from the respondent's side, other than their agreement to be bound by the decision in the Construction Catalysers Pvt. Ltd. case.