Skipper Limited vs. The State Of Assam And 2 Ors.

Facts

The petitioner, Skipper Limited, is challenging a summary of order dated 04.01.2024 issued by the Assistant Commissioner of State Tax, Guwahati Zone-C. The petitioner contends that this summary of order was issued without passing a formal order under Section 73(9) of the CGST Act, 2017, and without providing an opportunity for a hearing. The petitioner sought such an opportunity, but it was not granted. The respondents are the State of Assam and its tax authorities. The parties agreed that the issue is similar to a previously decided case, WP(C) No. 3912/2024 (Construction Catalysers Pvt. Ltd. Vs. the State of Assam and 2 others), and that the determination in that case should apply here.

Held

The Court held that the Summary of 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. Similarly, a Statement of Determination of Tax under Section 73(3) cannot replace the mandatory Show Cause Notice. The Court found that the initiation of proceedings under Section 73 without a proper Show Cause Notice is bad in law. Furthermore, the Court noted that the issuance of orders under Section 73(9) requires authentication as per Rule 26(3) of the Rules of 2017, and summaries do not dispense with this requirement. The impugned orders were also found to be in violation of Section 75(4) for lack of an opportunity of hearing. Consequently, the impugned orders were set aside and quashed. 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 of show cause notice to the service of the judgment was excluded for computing the period prescribed for passing orders 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 the State Act, is legally valid? 2. Whether a Statement of Determination of Tax issued under Section 73(3) of the CGST Act, 2017, and the State Act, can substitute the requirement for a Show Cause Notice under Section 73(1)? 3. Whether the issuance of an order under Section 73(9) of the CGST Act, 2017, and the State Act, requires authentication as stipulated in Rule 26(3) of the Rules of 2017, and whether summaries dispense with this requirement? 4. Whether the impugned order violates Section 75(4) of the CGST Act, 2017, by failing to provide an opportunity of hearing to the petitioner? Petitioner's arguments: The summary of order was issued without a proper order under Section 73(9) and without granting an opportunity of hearing. The issuance of a summary of show cause notice does not fulfill the statutory requirement of a formal show cause notice. Revenue's arguments: The judgment records no specific arguments from the revenue side, but it notes that the parties agreed to be bound by the decision in a similar prior case.