Facts of the Case

Sohidul Islam, trading in hardware goods as M/s S.I. Hardware, Goalpara, Assam, and registered under GST (Registration No. 18ABJPI2568K1Z9), challenged an order dated 25.02.2025 passed by the Assistant Commissioner of State Tax under Section 73 of the Assam GST Act, 2017. His principal ground was that he was never served a proper, prior show-cause notice under Section 73(1) — only a Summary of Show Cause Notice in Form GST DRC-01 along with an Attachment to Determination of Tax under Section 73(3), contrary to Section 73 read with Rule 142(1)(a). This was the very issue already decided by a coordinate bench of the Gauhati High Court in a batch of writ petitions, W.P.(C) No. 3912/2024 and others, vide a common judgment dated 26.09.2024.

Issues Involved

  1. Whether a Summary of Show Cause Notice issued in Form GST DRC-01, without an accompanying properly issued notice under Section 73(1), satisfies the statutory requirement to initiate proceedings under Section 73.
  2. Whether an order passed on such a defective foundation is sustainable in law.

Petitioner's Arguments

  • Relied squarely on the coordinate bench's common judgment holding that a DRC-01 summary is not a substitute for the mandatory Section 73(1) notice.
  • Contended that the Section 73(3) statement of tax determination cannot itself function as the Section 73(1) show-cause notice.
  • Argued that both the notice and the eventual order must be issued by the "proper officer" as defined in Section 2(91), and that no personal hearing under Section 75(4) had been afforded.

Respondent's Arguments

  • The Standing Counsel, Finance and Taxation Department, fairly conceded that the common judgment dated 26.09.2024 covered the petitioner's case, having been passed after hearing all sides on identical facts.

Court Order / Findings

  • Applying the coordinate bench's conclusions, the Court found it undisputed that only a Summary of Show Cause Notice and an Attachment to Determination of Tax had been issued, with no proper prior notice under Section 73(1).
  • This failure to comply with Section 73(1) read with Rule 142(1)(a) rendered the entire proceedings, and the resultant order dated 25.02.2025, unsustainable in law, and the order was accordingly set aside and quashed.
  • Liberty was granted to the respondent authorities to initiate de novo proceedings under Section 73 by issuing a valid notice, with the intervening period — from issuance of the earlier DRC-01 summary till service of a certified copy of the judgment — excluded while computing limitation for passing a fresh order under Section 73(10).

Important Clarification

  • A Summary of Show Cause Notice in Form GST DRC-01, or the Section 73(3) statement, is procedurally distinct from and cannot substitute the mandatory show-cause notice required under Section 73(1).
  • Both the notice and the eventual order must issue from the "proper officer," and want of a genuine Section 73(1) notice is fatal to the entire proceeding regardless of the summary having been served.
  • The department retains liberty to restart proceedings afresh, with the limitation clock adjusted in its favour for the period lost to the defective process.

Sections Involved

  • Section 73, CGST Act, 2017 (pari materia Assam GST Act) — lays down the notice-statement-order sequence for determination of tax not paid, non-fraud, in sub-sections (1) to (11).
  • Section 75(4), CGST Act, 2017 — mandates a personal hearing before an adverse order is passed.
  • Rule 142(1)(a), CGST Rules, 2017 — provides for electronic issuance of a summary of the notice/order in Form GST DRC-01/DRC-07.
  • Section 2(91), CGST Act, 2017 — defines "proper officer" who alone can issue the notice, statement and order.

Decision – In Favour of

The decision is in favour of the assessee. The assessment order was quashed for want of a proper Section 73(1) notice, though the department has liberty to reinitiate proceedings de novo.

Case Details

Court: Gauhati High Court (High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh)
Case No.: WP(C)/1277/2025; Neutral Citation 2025:GAU-AS:14530
Coram: Hon'ble Mr. Justice Manish Choudhury
Date of Order: 29.10.2025

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