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THE HIGH COURT OF GAUHATI (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MANISH CHOUDHURY, J
Maverick Technologies A Partnership Firm Having Its Registered Office At Toklai - Appellant
Versus
State Of Assam - Respondent
WP(C)/712/2025
Decided On : 18-02-2025
(A) Assam Goods and Services Tax Act, 2017 - Section 73 - Challenge to an order for tax determination due to improper issuance of Show Cause Notice - The petitioner contended that the Summary of Show Cause Notice served was not compliant with the statutory requirements of Section 73(1) - The court found that the absence of a proper Show Cause Notice rendered the order invalid. (Paras 3 , 8 , 10 , 12 )
(B) Natural Justice - The court emphasized that the issuance of a proper Show Cause Notice is a prerequisite for valid proceedings under Section 73, ensuring compliance with principles of natural justice. (Paras 8 , 10 , 12 )
Facts of the case:
The petitioner, engaged in the business of supplying laboratory equipment, challenged an order issued under Section 73 of the AGST Act, claiming that no proper Show Cause Notice was served prior to the order.
Findings of Court:
The court held that the Summary of Show Cause Notice cannot substitute for a proper Show Cause Notice, leading to the quashing of the impugned order.
Issues: The main issues included whether a proper Show Cause Notice was issued and if the Summary of Show Cause Notice could be considered valid.
Ratio Decidendi: The court ruled that the absence of a proper Show Cause Notice invalidated the proceedings, emphasizing that compliance with statutory requirements is essential for the validity of tax determination orders.
Result: The impugned order was set aside and quashed.
ORDER :
Heard Mr. R.S. Mishra, learned counsel for the petitioner and Mr. B. Choudhury, learned Standing Counsel, Finance & Taxation Department for all the respondents.
2. The petitioner has stated that he used to deal in the business of supply and installation & commissioning, of engineering / scientific laboratory equipments etc. and carriers on such business in the name and style of his sole proprietorship concern, M/s Maverick Technologies from its principal place of business at Jorhat, Assam. For the purpose of carrying the business, he had registered himself under the Goods and Services Tax [GST] vide Registration no. GSTIN/ID : 18AAJFM5983H1ZQ.
3. The petitioner has approached this Court by the instant writ petition to assail an Order dated 21.08.2024 passed by the respondent no. 3 purportedly in exercise of powers conferred under Section 73 of the Assam Goods and Services Tax Act, 2017 . One of the grounds on which the Order dated 21.08.2024 has been challenged is that there was no proper and prior Show Cause Notice prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 and the petitioner was only served with a Summary of Show Cause Notice in Form GST DRC-01, which is also not in conformity with Section 73 read with Rule 142[1][a] of the Assam Goods and Services Tax Act, 2017 [‘the AGST Act’, for short].
4. For ready reference, Section 73 of the Central Goods and Services Tax Act, 2017 [‘the CGST Act’, for short] and sub-rule [1] of Rule 142 of the Central Goods and Services Tax Rules, 2017 [‘the CGST Rules’, for short], which provisions are pari material to Section 73 of the AGST Act and Rule 142[1] of the AGST Rules, 2017, are quoted hereinbelow :-
Section 73. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful-misstatement or suppression of facts.-
[1] Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder.
[2] The proper officer shall issue the notice under sub-section [1] at least three months prior to the time limit specified in sub-section [10] for issuance of order.
[3] Where a notice has been issued for any period under sub-section [1], the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under subsection [1], on the person chargeable with tax.
[4] The service of such statement shall be deemed to be service of notice on such person under sub-section [1], subject to the condition that the grounds relied upon for such tax periods other than those covered under sub-section [1] are the same as are mentioned in the earlier notice.
[5] The person chargeable with tax may, before service of notice under sub-section [1] or, as the case may be, the statement under sub-section [3], pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.
[6] The proper officer, on receipt of such information, shall not serve any notice under subsection [1] or, as the case may be, the statemen
A proper Show Cause Notice is essential for valid proceedings under Section 73 of the Assam Goods and Services Tax Act, ensuring compliance with principles of natural justice.
A proper Show Cause Notice is essential for valid proceedings under Section 73 of the Assam Goods and Services Tax Act, and its absence invalidates any subsequent orders.
Proper issuance of a Show Cause Notice is a prerequisite for valid tax determination under the Assam Goods and Services Tax Act, 2017.
A summary of a show cause notice in electronic form cannot substitute the requirement for a formal show cause notice under the tax legislation. Issuance of a proper notice is a mandatory condition pr....
A Summary of Show Cause Notice cannot replace a proper Show Cause Notice, and failure to provide a hearing violates natural justice principles.
Show-cause notices under Sections 73 and 74 of the WBGST/CGST Act can coexist for the same tax period if based on distinct grounds, and petitioners must pursue available appellate remedies before see....
Wrong citation of legal provisions does not invalidate proceedings if actions conform to the appropriate statute; however, the right to a hearing is a mandatory requirement.
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