Summary Show Cause Notice in Form DRC-01 is not a substitute for a mandatory Section 73(1) notice.

In brief

The question

1. Whether a Summary of Show Cause Notice in Form GST DRC-01 can serve as a substitute for a prior Show Cause Notice required under Section 73(1) of the AGST Act?

The court held

The court answered that a Summary SCN is not a substitute for a proper SCN

It also directed

The impugned Order dated 30.04.2024 and all subsequent actions (including the suspension of registration) were set aside and quashed; the court granted liberty for de novo proceedings excluding certain periods from statutory limitation

01Facts

The petitioner, a government contractor registered under the GST regime, challenged a Summary of Order dated 30.04.2024 issued under Section 73 of the Assam Goods and Services Tax (AGST) Act, 2017

p. 2

The petitioner argued that the respondent authorities failed to serve a proper Show-Cause Notice (SCN) as mandated by Section 73(1), having only served a Summary Show-Cause Notice in Form GST DRC-01 on 18.12.2023

p. 2

Following the impugned order, the petitioner’s registration was suspended on 08.01.2026 due to unpaid liabilities

p. 2

02Issues

i.1. Whether a Summary of Show Cause Notice in Form GST DRC-01 can serve as a substitute for a prior Show Cause Notice required under Section 73(1) of the AGST Act?

p. 6, para 8(A)

ii.2. Whether the impugned order dated 30.04.2024 was passed in compliance with the procedural mandates of Section 73 and principles of natural justice?

p. 6/9

03Law Applied

Section 73 of the AGST/CGST Act, 2017, which requires the "proper officer" to serve a notice on the person chargeable with tax to show cause before determining liabilities

pp. 3-4

Rule 142(1) of the AGST/CGST Rules, 2017, which stipulates that a summary in Form GST DRC-01 must be served "along with" the substantive notice issued under Section 73

p. 5

Precedent in W.P.(C) no. 3912/2024, which established that the summary (DRC-01) is not a substitute for the statutory SCN, and that failure to provide an opportunity for a hearing violates Section 75(4)

pp. 6-8

Provisions in the judgment · 26 · Linked ones open on LawLens

ASSAM GOODS AND SERVICES TAX ACT, 2017 14 provisions

Section 2 Section 50 Section 52 Section 73 Section 74 Section 75 Section 76 Section 122 Section 123 Section 124 Section 125 Section 127 Section 129 Section 130

Central Goods and Services Tax Act, 2017 12 provisions

Section 2 Section 52 Section 73 Section 74 Section 76 Section 122 Section 123 Section 124 Section 125 Section 127 Section 129 Section 130

04Reasoning

The court reasoned that the initiation of proceedings under Section 73 without a proper SCN is legally unsustainable

p. 7, para 8(B)

The court noted that while a Summary of SCN (GST DRC-01) and a Summary of Order (GST DRC-07) are required for electronic record-keeping, they do not dispense with the requirement of a detailed, authenticated SCN and a final order by the Proper Officer

p. 7, para 8(C)

Applying the ratio from the batch petitions, the court found that the "statement of determination of tax" attached to the summary in this case was merely a statement under Section 73(3) and could not satisfy the requirement of a notice under Section 73(1)

pp. 6-7

Since the respondents admitted that no prior SCN was issued, the court held the entire proceeding to be in violation of statutory procedure and natural justice

pp. 8-9