Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Gau) 1700

IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
N. Unni Krishnan Nair, J.
Air Transport Corporation Assam Private Limited And Ors. – Petitioners
Versus
The State of Assam And Ors. Represented By The Commissioner And Secretary To The Government of Assam, Department of Finance And Taxation And Ors. – Respondents
WP(C)/470 of 2025
Decided On : 13-08-2025

Advocates Appeared:
For the Petitioner: Mr. R.S Mishra, Mr. D Saraf, Mr. R K Mahanta
For the Respondent: SC, FINANCE AND TAXATION

The issuance of a valid show-cause notice is a mandatory requirement, and a summary alone cannot replace it; orders issued without such notices are void.

Headnote:(A) Central Goods and Services Tax Act, 2017 - Section 73 - Impugned orders for demand of GST challenged for lack of a valid show-cause notice - The court found that the Summary of Show Cause Notice in Form DRC-01 cannot substitute a proper Show Cause Notice; thus, the orders are void under Section 73. (Paras 12, 29(A), 29

(B))

Facts of the case:
The petitioner, a registered transporter, challenged the demand of GST amounting to Rs.67,75,803/- following an alleged improper issuance of Form DRC-01 and an order without providing a notice to show cause as mandated. (Paras 2, 4)

Findings of Court:
The court ruled that valid show-cause notice issuance is mandatory and the summary alone cannot initiate proceedings under Section 73. The impugned orders were set aside for non-compliance with statutory requirements and lack of opportunity for a hearing. (Paras 12-14)

Issues: Whether proper show-cause notices were issued and whether the demands were appropriate under Section 73, as well as conformity with principles of natural justice. (Paras 10, 26)

Ratio Decidendi: The court stressed that the issuance of a proper show-cause notice is essential and cannot be waived; authenticating documents per Rule 26(3) is required for effectiveness. Non-compliance with these procedural mandates renders the orders void. (Paras 20, 29)

Result: Impugned orders quashed and set aside, with liberty granted to initiate fresh proceedings under Section 73.

Table of Content
1. requirement of show cause notice under gst (Para 4 , 5 , 6 , 7)
2. petitioner's arguments against lack of notice (Para 8 , 9)
3. issues framed regarding notice compliance (Para 10 , 11 , 12)
4. court's conclusions on procedural violations (Para 14)

JUDGMENT :

N. UNNI KRISHNAN NAIR, J.

Heard Mr. R.S. Misra, learned counsel for the petitioner. Also heard Mr. B. Gogoi, learned standing counsel, Finance & Taxation, Govt. of Assam.

2. The petitioner in the present proceeding, hence, presented a challenge to the form GST DRC-01 dated 28-12-2023 as well as the order dated 29-04-2024 issued by the respondent No. 3, i.e. the Asstt. Commissioner of State Taxes.

3. The brief facts requisite for adjudication of the issue arising in the present proceeding is noticed as under.

4. The petitioner, who is engaged in the business of transportation of goods and ancillary service, is a registered assesee under the provisions of Central Goods & Service Tax Act, 2017 and the Assam Goods and Services Tax Act, 2017. The petitioner has a GST registration bearing No. 18AAACA5364L1ZH. The respondent No. 3 herein, i.e. the Asstt. Commissioner of State Taxes had issued a summary of show-cause notice in Form DRC-01 dated 28-12-2023 under Rule 142 of the CGST Rules which was uploaded in the GST postal. It is the contention of the petitioner that no show-cause notice was uploaded along with the summary of the said show-cause notice. The summary is in respect of the financial year, 2018-19. Along with the Form DRC-01 an attachment to determination of tax was also uploaded. The petitioner was to submit his reply on 28-01-2024. However, in relation to the date and venue of the personal hearing, it was indicated in the portal to be not applicable. The petitioner further contented that without affording an opportunity of hearing the respondent No. 3 pursuant to issuance of Form DRC-01 dated 28-12-2023 passed the impugned order dated 29-04-2024 demanding GST under Section 73 of CGST/AGST Act to the tune of Rs. 67,75,803/- (Sixty seven lakhs seventy five thousand eight hundred three). Along with the said order dated 29-04-2024 a summary of the order was also uploaded in Form DRC-01 along with an attachment thereto. The petitioner contend that on perusal of the attachment as uploaded along with the DRC-07 Form, it is revealed that the reason attributed for creating of the demand of GST is on account of the fact that the petitioner had not replied or contested the notice and accordingly it was deemed that he has agreed to the terms of the notice issued to him.

5. The petitioner states that under Section 73 of the CGST/ AGST Act, 2017, a notice is mandated to be issued to the person chargeable with tax who had not paid or which had been so short paid or to refund has been erroneously made or who has wrongly availed or unutilized 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 under Section 50 and a penalty levyable under the Act of rules made there-under. It is contended by the petitioner that Sub-Section (9) of Section 73 provides that the proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to 10% of Tax or 10,000/-, whichever is higher, due from such person and issue an order. The petitioner further contends that Rule 142 of the CGST Rules, 2017 deals with issuance of notice and order for demand of amounts payable under the Act. It mandates that proper officer shall service, along with the notice issued under Section 52 or Section 73 or Section 74 or Section 76 or Section 122 or Section 123 or Section 124 or Section 125 or Section 127 or Section 129 or Section 130 , a summary thereof electronically in Form GST DRC-01 and therein specify the amount of tax, interest and penalty payable by the person chargeable with tax. The petitioner contends that a p