Vinit Kumar Jain 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/SGST Act. The attachment containing the determination of tax, issued under Section 73(3), cannot fulfill the requirement of a Show Cause Notice under Section 73(1). The Court found that the proceedings initiated under Section 73 without a proper Show Cause Notice were bad in law. Furthermore, the Court held that the impugned order dated 31.12.2023 violated Section 75(4) as no opportunity of hearing was provided to the petitioner, despite the petitioner having indicated a preference for a personal hearing. The Court noted that the attachments to GST DRC-01 and GST DRC-07 lacked the Proper Officer's signature, which is required under Rule 26(3) of the Rules of 2017. Consequently, the impugned order was set aside and quashed. The Court granted liberty to the respondent authorities to initiate de novo proceedings if deemed fit and directed the exclusion of the period from the issuance of the Summary of Show Cause Notice to the service of the judgment for computing the period prescribed under Section 73(10).

Facts

The petitioner, Vinit Kumar Jain, received a Summary of Show Cause Notice (GST DRC-01) dated 29.09.2023, along with an attachment detailing the determination of tax. The petitioner did not reply, believing no proper Show Cause Notice was attached. Subsequently, an Order in GST DRC-07 dated 31.12.2023 was issued, stating the petitioner agreed with the notice's terms due to non-response. The petitioner's grievance is that the attachments to both GST DRC-01 and GST DRC-07 lacked the Proper Officer's signature, and he was denied an opportunity of hearing as mandated by Section 75(4) of the CGST/AGST Act, 2017. This led to the filing of the writ petition before the Gauhati High Court.

Key Issues

1. Whether the attachment to the Summary of Show Cause Notice (GST DRC-01), which contained the determination of tax, constituted a valid Show Cause Notice as required by Section 73(1) of the CGST/SGST Act, 2017 and the Rules framed thereunder? The petitioner argued that the attachment was not a Show Cause Notice as it lacked specific requirements and the Proper Officer's signature, citing judgments from the Telangana, Andhra Pradesh, and Jharkhand High Courts. The revenue contended that the determination of tax provided sufficient details for a reply. 2. Whether the impugned order dated 31.12.2023, issued in GST DRC-07, is sustainable in the absence of a proper Show Cause Notice and an opportunity of personal hearing afforded to the petitioner, as mandated by Section 75(4) of the CGST/AGST Act, 2017? The petitioner argued that the lack of signature on the attachments and the denial of hearing violated principles of natural justice and statutory provisions. The revenue submitted that the attachments were authenticated digitally on the portal.