Naushad Ahmed vs. The State Of Assam And 2 Ors

Facts

The petitioner, Naushad Ahmed, challenged a summary of order dated April 25, 2024, issued by the Assistant Commissioner of State Tax, Dibrugarh. The petitioner contended that this order was passed without adhering to the procedure prescribed under Section 73 of the CGST Act, 2017, and without providing an opportunity for a hearing. Both parties agreed that the issue was identical to one previously decided by a Coordinate Bench in WP(C) No. 3912/2024 (Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others). The petitioner sought relief based on the findings in that prior judgment.

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 and the State Act. The Proper Officer must issue a formal Show Cause Notice to initiate proceedings. Furthermore, the Court found that the attachment to the Summary of the Show Cause Notice, which was only a Statement of determination of tax under Section 73(3), could not substitute the requirement for a Show Cause Notice under Section 73(1). The Court also 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. In the interest of justice, 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 time limit 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 as required by Section 73(1) of the CGST Act, 2017, and the corresponding State Act, renders the proceedings bad in law? Petitioner's contention: The petitioner argued that the Assistant Commissioner of State Tax failed to follow the mandatory procedure under Section 73 of the CGST Act, 2017, by issuing a summary of order without a proper show cause notice and without granting an opportunity of hearing. Revenue's contention: The respondent authorities did not present any specific arguments against the petitioner's claim, but agreed that the issue was identical to a previously decided case and that the outcome should follow that precedent.