Facts of the Case

Arnab Kumar was issued a Summary of Show Cause Notice dated 28.09.2023 in Form GST DRC-01, which stated that a show cause notice was attached, the attachment in fact being a determination of tax for Financial Year 2017-18 under Section 73(1) of the CGST/AGST Act, 2017. The petitioner did not reply, on the ground that no proper show cause notice — as distinct from a mere statement of determination of tax — was ever issued. Pursuant thereto, an order dated 13.12.2023 was passed in Form GST DRC-07, again attaching only a determination-of-tax document, on the stated reason that the taxpayer had not contested the notice and was deemed to have agreed with its terms. Crucially, neither the DRC-01 attachment nor the DRC-07 attachment carried any signature of the Proper Officer. The petitioner also complained of denial of personal hearing despite having opted for it in Form GST DRC-06.

Issues Involved

  1. Whether a Summary of Show Cause Notice issued electronically in Form GST DRC-01, accompanied only by a statement of determination of tax, can substitute for a proper show cause notice required under Section 73(1).
  2. Whether Rule 26(3) of the CGST Rules, mandating digital/e-signature authentication, extends to notices, statements and orders issued under Chapter XVIII (Demand and Recovery), even though the Rule appears under Chapter III (Registration).
  3. Whether denial of personal hearing, despite the taxpayer opting for it in Form GST DRC-06, vitiates the resultant order under Section 75(4).

Petitioner's Arguments

  • Rule 142 of the CGST Rules requires issuance of a proper notice under Section 73 along with a summary electronically in Form GST DRC-01; the attachment to DRC-01 cannot itself be treated as the show cause notice since it does not call upon the petitioner to show cause and carries no signature.
  • Relying on Silver Oak Villas LLP v. Assistant Commissioner ST (Telangana), A.V. Bhanoji Row v. Assistant Commissioner (ST) (Andhra Pradesh), Nkas Services Private Limited v. State of Jharkhand, and LC Infra Projects Pvt. Limited v. Union of India (Karnataka), an unsigned notice/order and a Summary of Show Cause Notice cannot substitute a proper Section 73 notice.

Respondent's Arguments

  • The Department fairly submitted that there was no separate show cause notice apart from the determination of tax enclosed with the Summary, and fairly conceded there was no signature on the attachments to DRC-01 and DRC-07, though the attachments recorded Sd- Proper Officer, and that the portal itself digitally authenticates DRC-01/DRC-07 uploads.

Court Order / Findings

  • The Court held, after an extensive analysis of Section 73(1)/(2)/(3) and Rule 142(1)(a)-(b), that the Summary of Show Cause Notice in Form GST DRC-01, together with the attached statement of determination of tax under Section 73(3), cannot substitute the requirement of a proper show cause notice under Section 73(1) — the two are legislatively distinct requirements.
  • Extending Rule 26(3) authentication principles (following Silver Oak Villas LLP and A.V. Bhanoji Row) to demand proceedings despite its literal placement under Chapter III, the Court held that in the absence of any other prescribed authentication mode for Chapter XVIII, the Proper Officer's authentication remains mandatory.
  • Finding that no proper show cause notice was issued and that the taxpayer's request for personal hearing under Section 75(4) was not honoured, the impugned order dated 13.12.2023 was set aside and quashed.
  • Liberty was granted for de novo proceedings under Section 73, with the period from issuance of the DRC-01 Summary until service of the judgment excluded while computing the limitation under Section 73(10).

Important Clarification

  • A Summary of Show Cause Notice issued electronically in Form GST DRC-01, even when accompanied by a determination-of-tax attachment, is not a substitute for the proper show cause notice mandated by Section 73(1) — the two serve distinct statutory functions and both must be independently issued by the Proper Officer.
  • Where a taxpayer specifically opts for personal hearing in Form GST DRC-06, failure to grant that hearing before passing an adverse order breaches Section 75(4), regardless of whether a reply was filed.

Sections Involved

  • Section 73, CGST/AGST Act, 2017 — determination of tax; sub-sections (1), (2), (3), (9) and (10) analysed in detail.
  • Section 75(4), CGST/AGST Act, 2017 — mandatory opportunity of personal hearing.
  • Rule 142(1)(a)-(b), CGST Rules, 2017 — Summary of notice/statement in Forms GST DRC-01/DRC-02.
  • Rule 26(3), CGST Rules, 2017 — authentication of notices, certificates and orders.

Decision – In Favour of

Assessee. Impugned order quashed with liberty for de novo Section 73 proceedings; limitation period excluded for the intervening period.

Case Details

Gauhati High Court (High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh); Case No. WP(C)/6904/2025; Coram: Hon'ble Mr. Justice Soumitra Saikia; Order dated 09.01.2026.

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