Mohhamad Arif vs. The State Of Assam And 2 Ors.

Facts

The petitioner, Mohamad Arif, challenged the actions of the Assistant Commissioner of State Tax, Dibrugarh. The petitioner contends that the Assistant Commissioner issued a summary of show cause notice dated 28.12.2023 and a summary of order dated 29.04.2024 without first issuing a proper show cause notice under Section 73(1) of the CGST Act, 2017, and without passing a formal order under Section 73(9) of the CGST Act, 2017. The petitioner further states that he was denied an opportunity of hearing before the summary of the order was passed. Both parties agreed that this case involves a similar issue to a previous judgment by a Co-ordinate Bench in WP(C) No. 3912/2024 (Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others).

Held

The Court held that the issuance of a 'Summary of Show Cause Notice' in GST DRC-01 is not a substitute for a proper show cause notice required under Section 73(1) of the CGST Act and the corresponding State Act. The Court found that the 'Statement of determination of tax' attached to the summary cannot fulfill the requirement of a show cause notice. Consequently, initiating proceedings under Section 73 without a proper show cause notice is bad in law. The Court also noted that the impugned orders violated Section 75(4) as no opportunity of hearing was provided. Relying on the judgment in Construction Catalysers Pvt. Ltd., the Court set aside and quashed the summary of the show cause notice dated 28.12.2023 and the summary of the order dated 29.04.2024. The Court granted liberty to the respondent authorities to initiate de novo proceedings under Section 73 if deemed fit, and excluded the period from the issuance of the summary show cause notices until the certified copy of the judgment is served on 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 formal show cause notice under Section 73(1) of the CGST Act, 2017, and its State counterpart, 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 proper 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 its State counterpart, is legally valid? 4. Whether the impugned orders are in violation of Section 75(4) of the CGST Act, 2017, due to the denial of an opportunity of hearing to the petitioner? Petitioner's Arguments: The petitioner argued that the authorities failed to follow the mandatory procedures laid down in Section 73(1) and 73(9) of the CGST Act, 2017, by issuing summaries instead of formal notices and orders. The petitioner also contended that the denial of an opportunity of hearing violated Section 75(4). Revenue's Arguments: The judgment records no specific arguments from the revenue or State. However, it notes that the respondent authorities were under the impression that the attachment of the determination of tax to the summary of the show cause notice constituted a valid show cause notice.