Md. Jiaur Rahman 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 to the Summary of Show Cause Notice, being merely a Statement of 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. The Court also found 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 Show Cause Notice, Statement, and Order must be authenticated as per 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 under Section 73 if deemed fit, and excluded the period from the issuance of the Summary of Show Cause Notice to the service of the judgment from the computation of the period prescribed for passing orders under Section 73(10).

Facts

The petitioner, MD. JIAUR RAHMAN, received a Summary of Show Cause Notice (GST DRC-01) dated 29.09.2023, which was accompanied by an attachment detailing the determination of tax. The petitioner did not reply, believing no actual Show Cause Notice was provided. Subsequently, a Summary of Order (GST DRC-07) dated 31.12.2023 was issued, stating the petitioner had not contested the notice. The petitioner's grievance is that neither the attachment to the Summary of Show Cause Notice nor the attachment to the Summary of Order bore the signature of the Proper Officer. Furthermore, the petitioner claims to have been 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 against the State of Assam and its tax authorities.

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 as it did not require the petitioner to show cause, lacked the Proper Officer's signature, and thus violated Rule 26 of the Rules of 2017. They relied on 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 and that the Summary of Show Cause Notice and its attachment were duly authenticated on the portal. 2. Whether the impugned order dated 31.12.2023, passed without affording the petitioner an opportunity of personal hearing, is sustainable in light of Section 75(4) of the CGST/AGST Act, 2017? The petitioner argued that the principles of natural justice and statutory mandate were violated. The respondent did not explicitly address this point in the provided text, but the Court's reasoning implies the lack of hearing was a key issue.