Ranjit Dutta vs. The State Of Assam And 2 Ors.

Facts

The petitioner, Ranjit Dutta, challenged the actions of the Assistant Commissioner of State Tax, Jorhat. The petitioner contended that the Assistant Commissioner issued a summary of show cause notice dated September 28, 2023, and a summary of order dated December 30, 2023, without 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 stated that he was denied an opportunity of hearing before the summary of the order was passed. Both parties agreed that the issue was identical to a previous case, WP(C) No. 3912/2024 (Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others).

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 CGST Act and the State Act. The Proper Officer must issue a proper show cause notice to initiate proceedings under Section 73. Similarly, the Statement of determination of tax under Section 73(3) cannot substitute the mandatory Show Cause Notice under Section 73(1). The Court found that the initiation of proceedings and passing of orders without a proper show cause notice and opportunity of hearing are bad in law. The Court also noted that the impugned orders were in violation of Section 75(4) as no opportunity of hearing was given. The Court set aside and quashed the impugned orders. In the interest of justice, liberty was granted to the respondent authorities to initiate de novo proceedings under Section 73 if deemed fit, and the period from the issuance of the summary show cause notice to the service of the judgment was excluded for computing the period prescribed under Section 73(10).

Key Issues

1. Whether the Summary of the Show Cause Notice in GST DRC-01 can substitute for a Show Cause Notice issued under Section 73(1) of the CGST Act, 2017 and the corresponding State Act? The petitioner argued that the issuance of a summary notice is not a substitute for a proper show cause notice, which is mandatory under Section 73(1). The revenue did not record specific arguments but agreed to rely on the previous judgment. 2. Whether the Statement of determination of tax under Section 73(3) can substitute for a Show Cause Notice under Section 73(1)? The petitioner contended that the statement of tax determination, attached to the summary of the show cause notice, cannot fulfill the requirement of a show cause notice. The revenue did not record specific arguments. 3. Whether the impugned orders were passed in violation of Section 75(4) of the CGST Act, 2017, due to the denial of an opportunity of hearing? The petitioner argued that no opportunity of hearing was provided before the summary of the order was passed, violating the principles of natural justice and Section 75(4). The revenue did not record specific arguments.