Shri Dilip Pathak vs. The State Of Assam And Ors

Held

The Court held that the Summary of Show Cause Notice in GST DRC-01, accompanied by the determination of tax, does not substitute for a proper Show Cause Notice required under Section 73(1) of the Central and State Acts. The attachment to the Summary of Show Cause Notice was found to be only a Statement of Determination of Tax under Section 73(3), which cannot fulfill the requirement of a Show Cause Notice. The Court also noted that the Show Cause Notice, Statement, and Order under Section 73 are required to be issued by the Proper Officer and authenticated as per Rule 26(3) of the Rules of 2017. Furthermore, the Court found that the impugned orders violated Section 75(4) as no opportunity of hearing was provided, even though the petitioner had indicated a preference for a personal hearing. The Court quashed the impugned orders and 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 Notice until the judgment is served from the computation of the period prescribed for passing an order under Section 73(10).

Facts

The petitioner, Shri Dilip Pathak, received a Summary of Show Cause Notice (GST DRC-01) dated 28.09.2024, which stated that a Show Cause Notice was attached. However, the petitioner claims no actual Show Cause Notice was attached, only a determination of tax. Consequently, the petitioner did not reply. Orders dated 24.12.2024 and 16.08.2024 were issued in GST DRC-07, citing the petitioner's failure to reply or contest the notice. The petitioner's grievance is that the attachments to both GST DRC-01 and GST DRC-07 lacked the signature of the Proper Officer, and he was denied an opportunity of hearing as mandated by Section 75(4) of the CGST/AGST Act, 2017, leading to the filing of this writ petition.

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 Rule 142 of the CGST Rules, 2017? The petitioner argued that the attachment was merely a determination of tax and not a Show Cause Notice, lacking the requisite mention of showing cause and the signature of the Proper Officer, citing judgments from the Telangana, Andhra Pradesh, and Jharkhand High Courts. The respondent contended that the determination of tax provided sufficient details for the petitioner to reply. 2. Whether the impugned orders dated 24.12.2024 and 16.08.2024 are 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 respondent did not explicitly address the lack of hearing but submitted that the portal's authentication implies digital signatures.