Page No.# 1/28

GAHC010152562024

THE GAUHATI HIGH COURT

(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

Case No. : WP(C)/3912/2024

CONSTRUCTION CATALYSERS PRIVATE LIMITED

HAVING ITS REGISTERED OFFICE AT VEDH, 484/37, MITRAMANDAL

COLONY, PARVATI, PUNE, MAHARASHTRA INDIA- 411009 REPRESENTED

BY ITS AUTHORIZED SIGNATORY SRI PRASHANT KUMAR PANDEY, AGED

AROUND 34 YEARS, SON OF ARUN KUMAR PANDEY RESIDENT OF

VILLAGE BANGARUA, P.O. PRATAPPUR, BAGARUA, DEORIA, UTTAR

PRADESH, 274703

VERSUS

THE STATE OF ASSAM AND 2 ORS

REPRESENTED BY THE COMMISSIONER AND SECRETARY, FINANCE

DEPARTMENT, ASSAM, GUWAHATI

2:THE PRINCIPAL COMMISSIONER OF STATE TAX

ASSAM

GUWAHATI

3:THE ASSISTANT COMMISSIONER OF STATE TAX

GUWAHATI- A-1

GUWAHATI-A

KAR BHAVAN

GUWAHATI

ASSA

Linked Case : WP(C)/4619/2024

THE ASSAM GRAMIN VIKASH BANK

A REGIONAL RURAL BANK FIRM HAVING ITS WITH PAN- AAAAA7147H

GSTIN- 18AAAAA7147H2ZS

HAVING ITS HEAD OFFICE AT 2ND FLOOR

SHANTI COMPLEX Page No.# 1/28

GAHC010152562024

THE GAUHATI HIGH COURT

(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

Case No. : WP(C)/3912/2024

CONSTRUCTION CATALYSERS PRIVATE LIMITED

HAVING ITS REGISTERED OFFICE AT VEDH, 484/37, MITRAMANDAL

COLONY, PARVATI, PUNE, MAHARASHTRA INDIA- 411009 REPRESENTED

BY ITS AUTHORIZED SIGNATORY SRI PRASHANT KUMAR PANDEY, AGED

AROUND 34 YEARS, SON OF ARUN KUMAR PANDEY RESIDENT OF

VILLAGE BANGARUA, P.O. PRATAPPUR, BAGARUA, DEORIA, UTTAR

PRADESH, 274703

VERSUS

THE STATE OF ASSAM AND 2 ORS

REPRESENTED BY THE COMMISSIONER AND SECRETARY, FINANCE

DEPARTMENT, ASSAM, GUWAHATI

2:THE PRINCIPAL COMMISSIONER OF STATE TAX

ASSAM

GUWAHATI

3:THE ASSISTANT COMMISSIONER OF STATE TAX

GUWAHATI- A-1

GUWAHATI-A

KAR BHAVAN

GUWAHATI

ASSA

Linked Case : WP(C)/4619/2024

THE ASSAM GRAMIN VIKASH BANK

A REGIONAL RURAL BANK FIRM HAVING ITS WITH PAN- AAAAA7147H

GSTIN- 18AAAAA7147H2ZS

HAVING ITS HEAD OFFICE AT 2ND FLOOR

SHANTI COMPLEX

Page No.# 2/28

G.S.ROAD

BHANGAGARH

KAMRUP METROPOLITAN

ASSAM

781005 (CURRENT ADDRESS- ADAMS PLAZA

1ST AND 2ND FLOORS

SRIMANTA SHANKARDEV PATH

CHRISTIAN BASTI

GUWAHATI- 781008) AND BRANCHES AT DIFFERENT PLACES IN THE STATE

OF ASSAM

VERSUS

THE STATE OF ASSAM AND 2 ORS

REPRESENTED BY THE COMMISSIONER AND SECRETARY

FINANCE DEPARTMENT

ASSAM

GUWAHATI

2:THE PRINCIPAL COMMISSIONER OF STATE TAX

ASSAM

GUWAHATI

3:THE ASSISTANT COMMISSIONER OF STATE TAX

GUWAHATI- D-8

GUWAHATI-D

KAR BHAVAN

GUWAHATI

ASSAM

Linked Case : WP(C)/3933/2024

CONSTRUCTION CATALYSERS PRIVATE LIMITED

HAVING ITS REGISTERED OFFICE AT VEDH

484/37

MITRAMANDAL COLONY

PARVATI

PUNE

MAHARASHTRA INDIA- 411009 REPRESENTED BY ITS AUTHORIZED

SIGNATORY SRI PRASHANT KUMAR PANDEY

AGED AROUND 34 YEARS

SON OF ARUN KUMAR PANDEY RESIDENT OF VILLAGE BANGARUA

P.O. PRATAPPUR

BAGARUA

DEORIA

UTTAR PRADESH

274703

Page No.# 3/28

VERSUS

THE STATE OF ASSAM AND 2 ORS

REPRESENTED BY THE COMMISSIONER AND SECRETARY

FINANCE DEPARTMENT

ASSAM

GUWAHATI

2:THE PRINCIPAL COMMISSIONER OF STATE TAX

ASSAM

GUWAHATI

3:THE ASSISTANT COMMISSIONER OF STATE TAX

GUWAHATI- A-1

GUWAHATI-A

KAR BHAVAN

GUWAHATI

ASSAM

Linked Case : WP(C)/4379/2024

M/S NITAI KANGSA BANIK AND ANR

A PROPRIETORSHIP FIRM HAVING ITS OFFICE AT SONAI ROAD

NEAR HOLY CROSS SCHOOL

SILCHAR

ASSAM- 788006

REPRESENTED BY ITS PROPRIETOR SRI NITAI KANGSA BANIK.

2: NITAI KANGSA BANIK

SON OF SRI SUBAL KANGSA BANIK

AGED ABOUT 53 YEARS

RESIDENT OF RAMCHARAN ROAD

KANAKPUR MAIN ROAD

SILCHAR

DISTRICT- CACHAR- 788006.

VERSUS

THE UNION OF INDIA AND 3 ORS.

MINISTRY OF FINANCE

REPRESENTED BY THE SECRETARY TO THE MINISTRY OF FINANCE

GOVERNMENT OF INDIA

NEW DELHI.

2:CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS

1ST FLOOR

Page No.# 4/28

TOWER

NBCC PLAZA

SECTOR- 5

PUSHP VIHAR

NEW DELHI- 110017.

3:THE PRINCIPAL COMMISSIONER

STATE GST

KAR BHAWAN

DISPUR

GUWAHATI

ASSAM

4:THE ASSISTANT COMMISSIONER

OF STATE TAX

SILCHAR-4

SILCHAR

ASSAM

Linked Case : WP(C)/4618/2024

THE ASSAM GRAMIN VIKASH BANK (FORMERLY KNOWN AS LANGPI

DEHANGI RURAL BANK)

A REGIONAL RURAL BANK FIRM HAVING ITS WITH PAN- AABCL0289J

GSTIN- 18AABCL0289J1ZB

HAVING ITS HEAD OFFICE AT 1ST FLOOR

DWCCM SOCIETY BUILDING

G.S.ROAD

DIPHU MAIN

DIPHU

NAGAON

ASSAM

782460 (CURRENT ADDRESS- THE ASSAM GRAMIN VIKASH BANK

ADAMS PLAZA

SRIMANTA SHANKARDEV PATH

CHRISTIAN BASTI

GUWAHATI- 781005) AND BRANCHES AT DIFFERENT PLACES IN THE STATE

OF ASSAM

VERSUS

THE STATE OF ASSAM AND 2 ORS

REPRESENTED BY THE COMMISSIONER AND SECRETARY

FINANCE DEPARTMENT

ASSAM

GUWAHATI

Page No.# 5/28

2:THE PRINCIPAL COMMISSIONER OF STATE TAX

ASSAM

GUWAHATI

3:THE ASSISTANT COMMISSIONER OF STATE TAX

DIPHU-1

DIPHU

NAGAON ZONE

ASSAM

Linked Case : WP(C)/3910/2024

AURORA FINE ARTS

A PARTNERSHIP FIRM HAVING ITS GSTIN- 18AAJFA5773B1ZI

HAVING ITS OFFICE AND WORKS SHOP SITUATED AT 38 INDUSTRIAL

ESTATE

BAMUNIMAIDAN

M G ROAD

GUWAHATI

KAMRUP METROPOLITAN

ASSAM

781021 REPRESENTED BY ONE OF ITS PARTNERS SRI MUNIN MISRA

AGED ABOUT 63 YEARS

SON OF LATE JAGANATH MISRA

RESIDENT OF HOUSE NO.4

BAIKUNTHPUR

GEETANAGAR

GUWAHATI 781021

KAMRUP (METRO) ASSAM

VERSUS

THE STATE OF ASSAM AND 2 ORS

REPRESENTED BY THE COMMISSIONER AND SECRETARY

FINANCE DEPARTMENT

ASSAM

GUWAHATI

2:THE PRINCIPAL COMMISSIONER OF STATE TAX

ASSAM GUWAHATI

3:THE ASSISTANT COMMISSIONER OF STATE TAX

GUWAHATI- A 10

GUWAHATI-A

KAR BHAVAN

GUWAHATI

ASSAM

Page No.# 6/28

Advocate for the Petitioners : Ms. Nitu Hawelia, Advocate

Ms. M. L. Gope, Advocate

Mr. A. Goyal, Advocate

Advocate for the Respondents : Mr. B. Gogoi, Stnading Counsel

Finance and Taxation

Dr. B. N. Gogoi, Advocate

Ms. K. Phukan, Advocate

BEFORE

HONOURABLE MR. JUSTICE DEVASHIS BARUAH

Date of Hearing : 26.09.2024

Date of Judgment : 26.09.2024

JUDGMENT AND ORDER (ORAL)

Heard Ms. Nitu Hawelia, the learned counsel appearing on behalf of

the petitioners in WP(C) No.4379/2024 as well as Mr. A. Goyal, the learned

counsel appearing on behalf of the petitioners in WP(C) No.3912/2024;

WP(C) No.3910/2024; WP(C) No.3933/2024; WP(C) No.4618/2024 and

WP(C) No.4619/2024. I have also heard Mr. B. Gogoi, the learned

Standing Counsel of the Finance and Taxation Department of the

Government of Assam.

2. Before dealing with the issue involved, this Court finds it relevant to

briefly note the facts involved in the instant batch of writ petitions which

are taken up for adjudication.

PROPOSITION OF FACTS AS PER PLEADINGS AND INSTRUCTIONS

WP(C) No.3912/2024

3. In this case, the petitioner was issued a Summary of the show cause

in GST DRC-01 along with an attachment of the determination of tax on

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28.09.2023 for the tax period 2017-18. The petitioner submitted a reply

on 31.10.2023 stating inter-alia that the DGGI (CGST) had initiated

proceedings of enquiry in 2020 in respect to the determination of tax

regarding output liability and eligible ITC for the period covered under

DRC-01. It was further mentioned that in terms with Section 6 (2) (b) of

the Central Goods and Services Tax Act, 2017 (for short, ‘the Central Act’)

parallel proceedings on the same subject matter cannot run, and as such,

requested to drop the proceedings. In the said reply, the petitioner also

filled in the Column “Option for personal hearing” as “Yes”. Subsequent

thereto, on 30.12.2023, an order was passed and the Summary of the

Order in GST DRC-07 was forwarded to the petitioner along with an

attachment wherein details were provided. It is seen that both in the

Summary of the Order dated 30.12.2023 in GST DRC-07 as well as in the

attachment, thereto, the reason assigned was mentioned that the reply

was not satisfactory. It is worth noting herein that both the attachments,

i.e. the attachments to the GST DRC-01 as well as the attachment to the

GST DRC-07 were not authenticated by any signature of the Proper

Officer.

WP(C) No.3910/2024

4. In this writ petition, the petitioner was issued a Summary of Show

Cause dated 28.09.2023 in GST DRC-01 for the tax period from July 2017-

March 2018. Along with the said Summary of Show Cause there was an

attachment as regards the determination of tax. It is the case of the

petitioner that as there was no Show Cause Notice attached to the

Summary of the Show Cause Notice dated 28.09.2023 in the portal, the

petitioner did not submit any reply. Subsequent thereto, an order was

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passed on 25.12.2023 in GST DRC-07. The manner in which the tax was

determined was mentioned in the attachment. The reason assigned is that

the assessee failed to attend the personal hearing. It is relevant to

mention that the attachment to both the Summary of the Show Cause

Notice as well as the Summary of the Order uploaded in GST DRC-01 and

GST DRC-07 were not authenticated by any signature of the Proper

Officer.

WP(C) No.4618/2024

5. In this case, the petitioner herein was issued a Summary of the

Show Cause Notice dated 29.09.2023 in the GST DRC-01. In the said

Summary of the Show Cause Notice, it was mentioned that the Show

Cause Notice was attached. Along with the said Summary of the Show

Cause Notice, there was an attachment to the determination of tax dated

29.09.2023. The petitioner did not reply to the Show Cause Notice in view

of the fact that there was no Show Cause Notice attached to the Summary

of the Show Cause Notice. Pursuant thereto, a Summary of the Order

dated 31.12.2023 was issued in GST GST DRC-07. To the said Summary of

the Order uploaded in GST DRC-07, there was an attachment stating the

manner in which the determination was made. The reason assigned for

passing of the said order was that the taxpayer had not replied or

contested the notice, and as such, had been agreed with the terms of the

notice. It is relevant to mention that the attachments to both the GST

DRC-01 as well as the GST DRC-07 did not contain any signature of the

Proper Officer.

WP(C) No.4619/2024

6. In the this case, the petitioner herein was issued a Summary of the

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Show Cause Notice dated 28.09.2023 in the GST DRC-01. In the said

Summary of the Show Cause Notice, it was mentioned that the Show

Cause Notice was attached. Along with the said Summary of the Show

Cause Notice, there was an attachment to the determination of tax dated

28.09.2023. The petitioner did not reply to the Show Cause Notice in view

of the fact that there was no Show Cause Notice attached to the Summary

of the Show Cause Notice. Pursuant thereto, a Summary of the Order

dated 28.12.2023 was issued in GST DRC-07. To the said Summary of the

Order uploaded in GST DRC-07, there was an attachment stating the

manner in which the determination was made. The reason assigned for

passing of the said order was that the taxpayer had not replied or

contested the notice, and as such, had been agreed with the terms of the

notice. It is relevant to mention that the attachments to both the GST

DRC-01 as well as the GST DRC-07 did not contain any signature of the

Proper Officer.

WP(C) No.3933/2024

7. In this case, the petitioner was issued a Summary of the Show Cause

in GST DRC-01 along with an attachment of the determination of tax on

27.09.2023 for the tax period 2017-18. The petitioner submitted a reply

on 31.10.2023 stating inter-alia that the DGGI (CGST) had initiated

proceedings of enquiry in 2020 in respect to the determination of tax

regarding output liability and eligible ITC for the period covered under GST

DRC-01. It was further mentioned that in terms with Section 6 (2) (b) of

the Central Act parallel proceedings on the same subject matter cannot

run, and as such, requested to drop the proceedings. In the said reply, the

petitioner also filled in the Column “Option for personal hearing” as “Yes”.

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Subsequent thereto, on 31.12.2023, an order was passed and the

Summary of the Order in GST DRC-07 was forwarded to the petitioner

along with an attachment wherein details were provided. It is seen that

both in the Summary of the Order dated 31.12.2023 in GST DRC-07 as

well as in the attachment, thereto the reason assigned was mentioned

that the reply was not satisfactory. It is worth noting herein that both the

attachments, i.e. the attachments to the GST DRC-01 as well as the

attachment to the GST DRC-07 were not authenticated by any signature of

the Proper Officer.

WP(C) No.4379/2024

8. In the instant case, the petitioners were issued a Summary of the

Show Cause dated 29.09.2023. It was mentioned in the said GST DRC-01

that the Show Cause Notice was attached. However, it is the case of the

petitioners that there was no show cause notice, and as such, the

petitioners did not submit any reply. However, subsequently, on

27.12.2023, a Summary of the Order in GST DRC-07 was issued. The

computation on the basis of which the GST DRC-07 was issued was

attached to the GST DRC-07. The reason for passing the said order was

that as no payment had been made within 30 days of the issuance of

notice, and as such, on the basis of the documents available with the

Department and the information furnished by the petitioners.

9. It is relevant to take note of that this Court had issued notice

pursuant to the filing of the writ petitions and enquired with the learned

counsel appearing on behalf of the respondent authorities as to whether

there were Show Cause Notices issued apart from the Summary of the

Show Cause Notice in GST DRC-01, and further, as to whether there were

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Show Cause Notices attached as mentioned in the Summary of the Show

Cause Notice in GST DRC-01. In reply to the above queries so made by

this Court, affidavits have been filed as well as instructions placed that the

Proper Officer had only issued the Summary of the Show Cause Notice in

GST DRC-01 along with the determination of tax. There were no separate

Show Cause Notices issued though reflected in Summary of the Show

Cause Notices in GST DRC-01. During the course of the hearing, Mr. B.

Gogoi, the learned Standing Counsel for the Finance and Taxation

Department had placed an instruction issued by the Joint Commissioner of

Taxes, Assam wherein it has been mentioned that the attachments to the

GST DRC-01 is the Show Cause Notices and in the said attachments, the

case of under declared tax amount were given along with reasons thereof

in order to give the petitioners an opportunity to clarify his or their case of

under declared tax etc. The said instruction is kept on record and marked

with the letter “X”.

10. In the background of the above pleadings and instructions placed,

this Court would like to take note of the contentions made by the learned

counsels appearing on behalf of the parties.

CONTENTIONS OF THE PARTIES

11. Mr. A. Goyal, the learning counsel appearing on behalf of the

petitioners submitted the following:-

(A) It is the requirement in terms of Rule 142 of the Central Goods

and Services Tax Rules, 2017 (for short, ‘the Rules of 2017’) that the

notice under Section 73 has to be issued and a summary thereof is

to be additionally issued electronically in Form GST DRC-01. The

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learned counsel for the petitioners submitted that under no

circumstances the attachment to the GST DRC-01 can be said to be

a Show Cause Notice in as much as in the said attachment, there is

no mention that the petitioner is required to show cause.

Additionally, he submitted that the said attachment to the DRC-01

does not contain the signature of the Proper Officer and it is the

mandate of Rule 26 of the Rules of 2017 that the Show Cause

Notice had to be authenticated with digital signature or through E-

signature as specified under the provisions of the Information

Technology Act, 2000 or verified by any other mode of signature or

verification as notified by the Board in that behalf. In that regard,

the learned counsel for the petitioner submitted that the learned

Division Bench of the Telangana High Court in the case of M/s Silver

Oak Villas LLP vs. the Assistant Commissioner ST {WP(C)

No.6671/2024} vide its judgment and order dated 14.03.2024 had

dealt with Rule 26 of the Rules of 2017 and categorically opined that

since the impugned order therein was an unsigned document, it lost

its efficacy in the light of Rule 26 (3) of the Rules of 2017 as well as

the Telangana Goods and Services Tax Act, 2017 and the Rules

framed therein under. It was also observed therein that the Show

Cause Notice as also the impugned order would not be sustainable

and deserved to be set aside and quashed. The learned counsel

further submitted that in the case of A.V. Bhanoji Row vs. Assistant

Commissioner (ST) & Others, reported in (2024) 123 GSTR 432, the

learned Division Bench of the Andhra Pradesh High Court had

observed that as there was no signature of the Proper Officer, the

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same was treated to be void and inoperative.

(B) The learned counsel further submitted that in the case of Nkas

Services Private Limited vs. State of Jharkhand & Others, reported in

(2022) 99 GSTR 145, the learned Division Bench of the Jharkhand

High Court had dealt with the question as regards issuance of a

Summary of Show Cause Notice in GST Form DRC-01 and held that

the Summary of the Show Cause Notice as issued in Form GST DRC-

01 cannot be a substitute to the requirement of a proper Show

Cause Notice. The learned counsel had also referred to another

judgment of the Karnataka High Court in the case of LC Infra

Projects Pvt. Limited vs. Union of India and Others, reported in

(2020) 73 GSTR 248.

12. Ms. Nitu Hawelia, the learned counsel while supporting the

submissions of Mr. A. Goyal, the learned counsel additionally submitted

that in terms of Section 75 (4) of the Central Act as well as also the Assam

Goods and Services Tax Act 2017 (herein after referred to as ‘the State

Act’), there is a requirement of giving an opportunity of hearing when a

request is received in writing from the person chargeable with tax or

penalty or where any adverse decision is contemplated against such

person. The learned counsel submitted the materials on records which

were placed by Mr. A. Goyal, the learned counsel, would show that in

WP(C) No.3912/2024 and WP(C) No.3933/2024, the petitioners therein

had submitted their reply and in the said reply the petitioners had sought

for an opportunity of hearing as would be apparent from a perusal of the

reply enclosed to the writ petitions. The learned counsel submitted that

even in a case where an adverse decision is contemplated to be passed,

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there is a requirement for providing an opportunity of hearing irrespective

of whether the petitioners seek such an opportunity. The learned counsel

referring to the Summary of the Show Cause Notice issued in GST DRC-01

submitted that there is no mention whatsoever about the date of hearing

and the Column had been left blank. She submitted that use of the word

‘or’ in Section 75(4) of the Central Act as well as State Act in between the

words ‘when a request is received in writing from the person chargeable

with tax or penalty’ and ‘where any adverse decision is contemplated

against such person’ clearly shows the legislative intent to the effect that

irrespective of a request made or not but when an adverse decision is

contemplated an opportunity for hearing is mandated. The learned

counsel for the petitioners had referred to the judgment of the learned

Division Bench of the Chhattisgarh High Court in the case of Mahindra &

Mahindra Limited vs. Union of India and Others, (WA No.172/2024)

delivered on 10.04.2024 wherein the learned Division Bench dealt with the

scope and ambit of Section 75 (4) of the Central Act and observed that

when the statute contains a mandate of hearing which is a synonym to

natural justice, it cannot be given a go by or can be made porous. The

learned counsel for the petitioners therefore submitted that in the instant

cases as the impugned orders have been passed without giving a proper

opportunity of hearing as mandated under Section 75 (4) of both the

Central Act as well as the State Act, the impugned orders are liable to be

interfered with.

13. Per contra, Mr. B. Gogoi, the learned standing counsel appearing on

behalf of the Finance and Taxation Department of the Government of

Assam submitted that the respondent authorities have issued the

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Summary of the Show Cause Notice in Form DRC-01 which was

accompanied by the determination of tax which as per the respondents

would have provided all the details so that the petitioners could have

submitted the reply. The learned counsel, however, fairly submitted that

there is no separate Show Cause Notice apart from the determination of

tax enclosed to the Summary of the Show Cause Notice. On the question

of lack of signatures in the attachments to the GST DRC-01 as well as the

GST DRC-07, the learned counsel fairly submitted that the materials on

record do not show that there is/are any signature(s) in the attachment to

the Summary to the Show Cause Notice as well as Summary to the Order

issued in Forms GST DRC-01 and GST DRC-07 respectively. He however

submitted that in the attachments it is mentioned as ‘Sd- Proper Officer’.

The learned counsel further submitted that when the Summary of the

Show Cause Notice as well as the Summary of the Order are uploaded in

GST DRC-01 and GST DRC-07, the same are duly authenticated in the

portal with digital signatures and without such authentication, the portal

cannot be operated.

ANALYSIS AND DETERMINATION

14. I have heard the learned counsels for the petitioners as well as the

respondents. From the materials on record as well as the submissions so

made by the learned counsels for the petitioners it appears that the

petitioners have approached this Court in the present batch of writ

petitions alleging infraction to the various provisions of the Central Act, the

State Act as well as the Rules framed thereunder. It is also the case of the

petitioners that the principles of natural justice have been violated as is

not only a statutory mandate but also violative of Article 21 of the

Page No.# 16/28

Constitution. On the basis of the submissions, the analysis and

determination is required to be made broadly on the following headings:-

(i) Whether Show Cause Notices were issued prior to passing the

Impugned Order under Section 73 (9) of the State Act?

(ii) Whether the determination of tax as well as the Order attached

to the Summary of the Show Cause Notice in GST DCR-01 and

Summary of the Order in GST DCR-07 can be said to be the Show

Cause Notice and Order respectively?

(iii) Whether the impugned orders under Section 73 (9) of the State

Act is in conformity with Section 75(4) of the State Act and is in

consonance with the principles of natural justice?

(i) Whether Show Cause Notices were issued prior to passing the Impugned

Order under Section 73 (9) of the State Act.

15. From the perusal of the records, it would show that in the Summary

of the Show Cause Notices issued in GST DRC-01 to the petitioners in the

batch of writ petitions, there is a mention therein that there is a Show

Cause Notice attached. It is the case of the respondents that the said

attachment wherein determination of tax is mentioned is the Show Cause

Notice. The question therefore arises as to whether the said attachment

can be said to be a Show Cause Notice as per the mandate of both the

Central Act as well as the State Act and the Rules made therein under. It

would be apposite to take note of that in all these cases, the Summary of

the Show Cause Notices have been issued in terms with Section 73.

16. At this stage, this Court would briefly take note of Section 73. A

perusal of Section 73 would show that the said provision is set into motion

Page No.# 17/28

when it appears to the Proper Officer that:-

(a) Any tax has not been paid; or

(b) Any tax short paid; or

(c) Any tax erroneously refunded; or

(d) Where input tax credit had been wrongly availed or utilized.

for any reason other than the reason of fraud or any willful misstatement

or suppression of facts to evade tax.

Taking into account that it is only in the circumstances referred to

above, the Proper Officer is required to issue a Show Cause Notice,

therefore, the Show Cause Notice is required to specifically mention the

reason(s) and the circumstances why the provision of Section 73 had been

set into motion. The person against whom the said Show Cause Notice is

issued would only have an adequate opportunity to submit a

representation justifying that the prerequisites for issuance of Show Cause

Notice is not there if and only if the reason(s) for issuance of the Show

Cause is specifically mentioned in the Show Cause Notice.

Section 73 further stipulates that upon consideration of the

representations, if any, the Proper Officer shall pass the order under

Section 73 (9) determining the amount of tax, interest and penalty.

It is also apposite to mention that Section 73 (2) and Section 73 (10)

are interconnected in as much as Section 73 (10) stipulates that within

three years from the due date for furnishing the annual return for the

financial year, the order under Section 73 (9) can be passed. In terms with

Section 73 (2), the Show Cause Notice is to be issued within three months

Page No.# 18/28

prior to the time limit prescribed in Section 73 (10).

In addition to the above, it would also show from conjoint reading of

Sub-section (1) (2) (3) and (4) of Section 73 that the legislature had

categorically distinguished the Show Cause Notice from the Statement

which is required to be issued by the Proper Officer or in other words,

irrespective of Statement to be issued in terms with Sub-section (3) of

Section 73, there is a requirement of issuance of a Show Cause Notice by

the Proper Officer.

17. At this stage, it is also pertinent to mention that in Section 73, there

is no mention of issuance of a Summary of Show Cause Notice. The

requirement of issuance of a Summary of the Show Cause Notice is seen

in Rule 142 of the Rules of 2017. Rule 142 (1) (a) and (b) is relevant for

which the same is quoted herein below:-

“142. Notice and order for demand of amounts payable under the Act.-(1) The

proper officer shall serve, along with the

(a) 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,

(b) statement under sub-section (3) of section 73 or sub-section (3) of section

74, a summary thereof electronically in FORM GST DRC-02, specifying therein

the details of the amount payable.”

From a perusal of the above quoted Rule, it would show that in

addition to the Show Cause Notice to be issued under Section 73 (1) and

the Statement of determination of tax under Section 73 (3), there is an

additional requirement of issuance of a Summary of the Show Cause

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Notice in GST DRC-01 and the Summary of the Statement in GST DRC-02.

The natural corollary from the above analysis is that the issuance of the

Show Cause Notice and the Statement of determination of tax by the

Proper Officer are mandatory requirement in addition to the Summary of

Show Cause Notice in GST DRC-01 and Summary of the Statement in GST

DRC-02.

18. The judgment of the learned Division Bench of the Jharkhand High

Court in the case of Nkas Services Private Limited (supra) had also dealt

with a similar issue and categorically held that a Summary of a Show

Cause Notice issued under GST DRC-01 cannot substitute the requirement

of a proper Show Cause Notice. Similarly, in the case of LC Infra Projects

Pvt. Limited (supra), the learned Single Judge of the Karnataka High Court

had also observed that the issuance of a Show Cause Notice is sine qua

non to proceed with the recovery of interest payable thereon under

Section 50 of the Act and penalty leviable under the provisions of the Act

or the Rules.

19. From the above analysis, this Court is of the view that the Summary

of the Show Cause Notice along with the attachment containing the

determination of tax cannot be said to be a valid initiation of proceedings

under Section 73 without issuance of a proper Show Cause Notice. The

Summary of the Show Cause Notice is in addition to the issuance of a

proper Show Cause Notice. Under such circumstances, this Court is of the

unhesitant opinion that the impugned orders challenged in the instant

batch of writ petitions are contrary to the provisions of Section 73 as well

as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed

with issuance of a proper Show Cause Notice.

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(ii) Whether the determination of tax as well as the order attached to the

Summary to the Show Cause Notice in GST DRC-01 and the Summary of the

Order in GST DRC-07 can be said to be the Show Case Notice and Order

respectively.

20. While deciding supra, this Court duly dealt with what would

constitute a Show Cause Notice, the Statement as per Section 73 (3) as

well as the Summary to the Show Cause Notice in GST DRC-01 and

Summary of the Statement in GST DRC-02. This Court had also opined

above that the statement to be provided by the Proper Officer in terms

with Section 73 (3) cannot be said to be a Show Cause Notice which is

required to be issued in terms with Section 73 (1). Therefore, the

submission of the respondents that the statement attached to the

Summary of the Show Cause Notice is the Show Cause Notice is

completely misconceived and contrary to Section 73 (1) and 73 (3). Be

that as it may, a very pertinent contention had been made by the learned

counsel appearing on behalf of the petitioners to the effect that the

attachments to both the Summary of the Show Cause Notice and

Summary of the Order have no value as the same contains no

authentication of the Proper Officer. In that regard, the learned counsels

referred to Rule 26 (3) of the Rules and the judgment in the cases of M/s

Silver Oak Villas LLP (supra) and A.V. Bhanoji Row (supra).

21. Rule 26 (3) of the Rules of 2017 categorically stipulates as to how

notices, certificates and orders are to be authenticated. The said Sub-Rule

is reproduced herein under:-

“26.(3) All notices, certificates and orders under the provisions of this

Chapter shall be issued electronically by the proper officer or any other officer

Page No.# 21/28

authorised to issue such notices or certificates or orders, through digital

signature certificate [or through E-signature as specified under the provisions of

the Information Technology Act, 2000 (21 of 2000) or verified by any other

mode of signature or verification as notified by the Board in this behalf.]”

A perusal of the above quoted Sub-Rule would show that notices,

certificates and orders under the provisions of Chapter III shall be issued

electronically by the Proper Officer or any other officer authorized to issue

such notices or certificates or orders through digital signature certificate or

through e-signature as specified under the provisions of the Information

Technology Act, 2000 or verified by any other mode of signature or

verification as notified by the Board in that behalf. It is relevant to take

note of that Chapter III of the Rules of 2017 pertains to Registration

whereas in respect to Demand and Recovery, it is Chapter XVIII.

22. Now therefore a question arises as to whether Rule 26 (3) can be

applicable to Chapter-XVIII when the said Sub-Rule on refers to Chapter-

III. In the case of M/s Silver Oak Villas LLP (supra), the learned Division

Bench of the Telangana High Court had applied Rule 26 (3) of the Rules of

2017 even to Chapter-XVIII of the Rules of 2017. In the case of A.V.

Bhanoji Row (supra), the learned Division Bench of the Andhra Pradesh

High Court held that the signatures cannot be dispensed with and Sections

160 and 169 cannot save an order, notice, communication which did not

contain a signature. In another judgment of the learned Division Bench of

Delhi High Court in the case of Railsyls Engineers Private Limited vs.

Additional Commissioner of Central goods and Services Tax (Appeals-11)

and Anr., reported in (2023) 112 GSTR 143, the Delhi High Court held that

there was a requirement of at least putting the digital signatures on the

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Show Cause Notice and Order in Original.

23. A perusal of the provisions of Section 73 would show that the Show

Cause Notice is required to be issued by the Proper Officer, the Statement

under Section 73 (3) is to be issued by the Proper Officer as well as the

Order under Section 73 (9) is required to be passed by the Proper Officer.

Section 2 (91) of the Act defines who is the Proper Officer meaning

thereby either the Commissioner or the Officer who had been specifically

entrusted by the Commissioner. As it is the statutory mandate that it is

only the Proper Officer who has the authority to issue Show Cause Notice

and the Statement and pass the order, the authentication in the Show

Cause Notice, Statement as well as the Order by the Proper Officer is a

must and failure to do so, makes the Show Cause Notice, Statement and

Order ineffective and redundant.

24. It is also important to note that the Act only stipulates that notice

would be issued and order would be passed by the Proper Officer. The

manner in which the Proper Officer would authenticate the notice(s) or

the order(s) in so far as other Chapters of the Rules of 2017 is silent

except Chapter-III. Taking into account the utmost necessity of the

authentication by the Proper Officer, this Court is of the opinion unless

appropriate insertion are made in the Rules or notification are issued as

per the directions of the Board to fill the void in the Rules of 2017, the

authentication in the manner stipulated in Rule 26 (3) of the Rules of 2017

has to be applied as and when the Proper Officer is required to issue

notice or Statement and pass Order in terms with the Act.

Page No.# 23/28

(iii) Whether the impugned orders under Section 73 (9) of the State Act is in

conformity with Section 75 (4) of the State Act and is in consonance with

the principles of natural justice.

25. This Court has duly perused the Summary of the Show Cause

Notices wherein the petitioners were only asked to file their reply on a

date specified. There was no mention as to the date of hearing and the

Column was kept blank. In two writ petitions, i.e. WP(C) No.3912/2024

and WP(C) No.3933/2024, the petitioners had sought for an opportunity of

hearing which was however not given. In this regard, if this Court takes

note of Section 75 (4) of both the Central Act as well as State Act, it

would be seen that it is the mandate of the said provision that an

opportunity of hearing should be granted when a request is received in

writing from the person chargeable with tax or penalty or when any

adverse decision is contemplated against such person. The mandate of

Section 75 (4) of both the Central and State Act are safeguards provided

to the assessees so that they can have a say in the hearing process.

26. It is also seen that in the reply to be submitted in Form GST DRC-

06, there is an option given for personal hearing at Sl. No.7. As stated

above, the petitioners in WP(C) No.3912/2024 and WP(C) No.3933/2024

have specifically filled up the Column as “Yes” wherein the option for

personal hearing was mentioned. Inspite of that, there was no opportunity

of hearing afforded to those petitioners.

27. The learned Division Bench of the Chhattisgarh High Court in the

case of Mahindra & Mahindra Limited (supra) had categorically observed

that when the statute contains a mandate of hearing, the same has to be

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granted, else it would render the provision porous.

28. This Court is of the opinion that when the statute is clear to provide

an opportunity of hearing, there is a requirement of providing such

opportunity. In fact a perusal of the Form GST DRC-01 enclosed to the

writ petitions shows details have been given as regards the date by which

the reply has to be submitted; date of personal hearing; time of personal

hearing and venue of personal hearing. It is seen that in the Summary of

the Show Cause Notice only the date for submission of reply has been

mentioned. In respect to other details as stated above have been

mentioned to as ‘NA’. It may be that the Proper Officer assumed that

based on the reply he/she may proceed with the adjudication depending

as to whether the person to whom the notice is issued had opted for

personal hearing or not. But in a case where no reply is filed, a question

arises whether the Proper Officer can pass an adverse order without

providing an opportunity for hearing. The answer has to be in the negative

else it would render the second part of Section 75 (4) redundant.

CONCLUSION

29. On the basis of the above analysis and determination, this Court

disposes of the instant batch of writ petitions with the following

observations and directions:-

(A) The Summary of the Show Cause Notice in GST DRC-01 is not a

substitute to the Show Cause Notice to be issued in terms with

Section 73 (1) of the Central Act as well as the State Act.

Irrespective of issuance of the Summary of the Show Cause Notice,

the Proper Officer has to issue a Show Cause Notice to put the

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provision of Section 73 into motion.

(B) The Show Cause Notice to be issued in terms with Section 73 (1)

of the Central Act or State Act cannot be confused with the

Statement of the determination of tax to be issued in terms with

Section 73 (3) of the Central Act or the State Act. In the instant writ

petitions, the attachment to the Summary of Show Cause Notice in

GST DRC-01 is only the Statement of the determination of tax in

terms with Section 73 (3). The said Statement of determination of

tax cannot substitute the requirement for issuance of the Show

Cause Notice by the Proper Officer in terms with Section 73 (1) of

the Central or the State Act. Under such circumstances, initiation of

the proceedings under Section 73 against the petitioners in the

instant batch of writ petitions without the Show Cause Notice is bad

in law and interfered with.

(C) It is also noticed that the Show Cause Notice and the Statement

in terms with Section 73 (1) and 73 (3) of both the Central Act or

the State Act respectively are required to be issued only by the

Proper Officer as defined in Section 2 (91). Additionally, the order

under Section 73 (9) is also required to be passed by the Proper

officer. The Summary of the Show Cause Notice, the Summary of

the Statement under Section 73 (3) and the Summary of the Order

passed in terms with Section 73 (9) are to be issued in GST DRC-01,

GST DCR-02 and GST DRC-07 respectively. The issuance of the

Summary of the Show Cause Notice, Summary of the Statement and

Summary of the Order do not dispense with the requirement of

issuance of a proper Show Cause Notice and Statement as well as

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passing of the Order as per the mandate of Section 73 by the Proper

Officer. As initiation of a proceedings under Section 73 and passing

of an order under the same provision have consequences. The Show

Cause Notice, Statement as well as the Order are all required to be

authenticated in the manner stipulated in Rule 26 (3) of the Rules of

2017.

(D) The Impugned Orders challenged in the writ petitions are in

violation of Section 75 (4) as no opportunity of hearing was given as

already discussed herein above.

(E) The impugned orders challenged in the instant batch of writ

petitions, the details of which are given in the Appendix attached to

the instant judgment are set aside and quashed.

(F) This Court also cannot be unmindful of the fact that it is on

account of certain technicalities and the manner in which the

impugned orders were passed, this Court interfered with the

impugned orders and hence set aside and quashed the same. It is

also relevant to take note of that the respondent authorities were

under the impression that issuance of attachment of the

determination of tax which was attached to the Summary of the

Show Cause Notice would constitute a valid Show Cause Notice.

Under such circumstances, in the interest of justice, this Court while

setting aside the impugned Orders-in-Original as detailed out in the

Appendix, grants liberty to the respondent authorities to initiate de

novo proceedings under Section 73, if deemed fit for the relevant

financial year in question. This Court further observes and directs

that the period from the date of issuance the Summary of the Show

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Cause Notices upon the petitioners till the date a certified copy of

the instant judgment is served upon the Proper Officer, be excluded

while computing the period prescribed for passing of the order

under Section 73 (10) of the Central Act as well as the State Act as

the case may be.

30. With the above observations and directions, the writ petitions stand

disposed of.

JUDGE

Order downloaded on 04-08-2025 10:06:21 PMPage No.# 28/28

APPENDIX

1. The impugned Order-in-Original bearing No.ZD1812230625885

dated 30.12.2023 passed by the Assistant Commissioner of State Tax,

Guwahati challenged in WP(C) No.3912/2024 is set aside and

quashed.

2. The impugned Order-in-Original bearing No.ZD1812230420403

dated 25.12.2023 passed by the Assistant Commissioner of State Tax,

Guwahati challenged in WP(C) No.3910/2024 is set aside and

quashed.

3. The impugned Order-in-Original bearing No.ZD181223067126I

dated 25.12.2023 passed by the Assistant Commissioner of State Tax,

Guwahati challenged in WP(C) No.3933/2024 is set aside and

quashed.

4. The impugned Order-in-Original bearing No.ZD181223047773B

dated 27.12.2023 passed by the Assistant Commissioner of State Tax,

Guwahati challenged in WP(C) No.4379/2024 is set aside and

quashed.

5. The impugned Order-in-Original bearing No.ZD1812230657747

dated 31.12.2023 passed by the Assistant Commissioner of State Tax,

Guwahati challenged in WP(C) No.4618/2024 is set aside and

quashed.

6. The impugned Order-in-Original bearing No.ZD181223053533L

dated 28.12.2023 passed by the Assistant Commissioner of State Tax,

Guwahati challenged in WP(C) No.4619/2024 is set aside and

quashed.

Comparing Assistant