Rosida Sultana vs. The State Of Assam And 2 Ors

Held

The Court held that the 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/AGST Act, 2017. The attachment containing the determination of tax (under Section 73(3)) cannot fulfill the requirement of a Show Cause Notice. Proceedings initiated under Section 73 without a proper Show Cause Notice are bad in law. Furthermore, the Court found that the impugned order dated 28.04.2024 violated Section 75(4) of the Act as no opportunity of hearing was provided, despite the petitioner having indicated a preference for it in the reply form (GST DRC-06). The Court noted that the respondent authorities seemed to have mistakenly believed that the attachment of tax determination constituted a valid Show Cause Notice. The Court also observed that the Show Cause Notice, Statement, and Order under Section 73 are required to be authenticated as per Rule 26(3) of the Rules of 2017.

Facts

The petitioner, Rosida Sultana, received a Summary of Show Cause Notice (GST DRC-01) dated 14.12.2023, which included an attachment for the determination of tax. The petitioner did not reply, believing no actual Show Cause Notice was attached. Consequently, an Order in GST DRC-07 was issued on 28.04.2024, stating the petitioner agreed with the notice due to non-response. Both the attachments to GST DRC-01 and GST DRC-07 lacked the signature of the Proper Officer. The petitioner's grievance is that she was not afforded an opportunity of hearing as mandated by Section 75(4) of the CGST/AGST Act, 2017, before the order was passed.

Key Issues

1. Whether the attachment to the Summary of Show Cause Notice (GST DRC-01), which contained the determination of tax, constitutes a valid Show Cause Notice as required by Section 73(1) of the CGST/AGST Act, 2017 and the Rules framed thereunder? The petitioner argued that the attachment was not a Show Cause Notice, lacked the required mention of showing cause, and was not signed, rendering it invalid, citing judgments from the Telangana, Andhra Pradesh, and Jharkhand High Courts. The revenue contended that the determination of tax attachment provided sufficient details for the petitioner to reply. 2. Whether the impugned order dated 28.04.2024, issued in GST DRC-07, is sustainable in the absence of a proper Show Cause Notice and without affording the petitioner an opportunity of hearing as mandated by Section 75(4) of the CGST/AGST Act, 2017? The petitioner argued that the lack of a proper Show Cause Notice and the denial of a hearing violated principles of natural justice and statutory provisions. The revenue argued that the portal authentication implies digital signatures and that the petitioner could have opted for a personal hearing.