Manoj Kumar Sharma vs. The State Of Assam And 2 Ors.

Facts

The petitioner, Manoj Kumar Sharma, challenged the actions of the Assistant Commissioner of State Tax, Dibrugarh. The petitioner contended that the respondent issued a summary of show cause notice dated 27.12.2023 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 an order under Section 73(9) of the CGST Act, 2017. The petitioner further argued that an opportunity of hearing was denied before the summary of the order was passed. 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 Coordinate 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 CGST Act, 2017. The Proper Officer must issue a proper Show Cause Notice to initiate proceedings under Section 73. Furthermore, the Statement of determination of tax, even if attached to the summary, cannot substitute the requirement for a Show Cause Notice. The Court found that the initiation of proceedings and passing of orders without a proper Show Cause Notice and Statement, as mandated by Section 73, is bad in law. The Court also noted that the impugned orders violated Section 75(4) as no opportunity of hearing was given. Consequently, the impugned orders were set aside and quashed. In the interest of justice, 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 notice to the service of the judgment for computing the period prescribed for passing orders under Section 73(10).

Key Issues

1. Whether the Summary of Show Cause Notice in GST DRC-01, issued under Section 73(1) of the CGST Act, 2017, can substitute for a proper Show Cause Notice required by the said section? 2. Whether the Statement of determination of tax, attached to the Summary of Show Cause Notice, can substitute for the Show Cause Notice required under Section 73(1) of the CGST Act, 2017? 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 of the CGST Act, 2017? 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? 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 pass an order under Section 73(9) of the CGST Act, 2017. They contended that the summaries issued were not substitutes for the statutory requirements and that no opportunity of hearing was provided, making the proceedings bad in law. Revenue's Arguments: The respondent did not record any specific arguments, but agreed that the issue was identical to the Construction Catalysers Pvt. Ltd. case and that the determination in that case should cover the present petition.