Facts of the Case

Diganta Kumar Deka was issued a Summary of Show Cause Notice dated 27.09.2023 in Form GST DRC-01 for the tax period July 2017 to March 2018, along with an attachment determining the tax. The petitioner's case was that no proper Show Cause Notice was ever separately issued or attached, so he did not file a reply; consequently, an order was passed on 27.12.2023 in Form GST DRC-07 for failure to pay within 30 days of 'notice'. It was also contended that the attachments to both GST DRC-01 and GST DRC-07 were unauthenticated by any signature of the Proper Officer, and that the field for date/time of personal hearing in the DRC-01 was left blank.

Issues Involved

  1. Whether a Show Cause Notice was validly issued prior to the impugned order under Section 73(9) of the State Act.
  2. Whether the tax determination/order attached to the Summary in GST DRC-01/DRC-07 can itself be treated as the Show Cause Notice and Order respectively.
  3. Whether the impugned order conformed to Section 75(4) and the principles of natural justice.

Petitioner's Arguments

  • Under Rule 142 of the CGST Rules, a Summary of the Show Cause Notice in Form DRC-01 cannot itself constitute the Show Cause Notice under Section 73(1); a separate, authenticated notice is mandatory.
  • The attachments lacked digital/e-signature as mandated under Rule 26(3), following the Telangana High Court's ruling in M/s Silver Oak Villas LLP and the Andhra Pradesh High Court's ruling in A.V. Bhanoji Row.
  • Section 75(4)'s use of 'or' between a written request for hearing and a contemplated adverse decision shows a hearing is mandatory irrespective of whether it is specifically requested, per the Chhattisgarh High Court's ruling in Mahindra & Mahindra Ltd.

Respondent's Arguments

  • The Summary of Show Cause Notice accompanied by the tax determination provided sufficient details for the petitioner to reply.
  • The department fairly conceded there was no separate Show Cause Notice apart from the tax determination, and that the attachments to DRC-01/DRC-07 bore no signature, though the portal itself required digital authentication for uploading.

Court Order / Findings

  • The Court held, relying on Nkas Services Pvt. Ltd. (Jharkhand HC) and LC Infra Projects (Karnataka HC), that a Summary in GST DRC-01 cannot replace a proper, separately issued Show Cause Notice under Section 73(1); the summary is merely supplementary.
  • On authentication, the Court held Rule 26(3) — though placed under Chapter III (Registration) — must, in the absence of a specific authentication rule under the Demand and Recovery chapter, be applied by default to notices/orders under Section 73 as well, following M/s Silver Oak Villas LLP and A.V. Bhanoji Row.
  • On the hearing issue, the Court held that Section 75(4)'s second limb applies even where no reply is filed — if an adverse decision is contemplated, a hearing must still be offered; leaving the hearing-date field as 'NA' defeated this safeguard.
  • The impugned order dated 27.12.2023 was set aside, with liberty to the department to initiate de novo proceedings under Section 73, and the period between the DRC-01 summary and service of the judgment excluded from the Section 73(10) limitation period.

Important Clarification

  • A Summary of Show Cause Notice in Form GST DRC-01, even when accompanied by a tax determination, cannot substitute a formal, properly authenticated Show Cause Notice under Section 73(1).
  • Under Section 75(4), an opportunity of personal hearing is mandatory whenever an adverse decision is contemplated, even if the assessee has not filed a reply requesting one.

Sections Involved

  • Section 73, CGST/State GST Act, 2017 — show cause and determination of tax not paid other than by fraud.
  • Section 75(4), CGST/State GST Act, 2017 — mandatory opportunity of hearing.
  • Rule 142, CGST Rules, 2017 — requirement of summary notices/statements in Forms GST DRC-01/DRC-02.
  • Rule 26(3), CGST Rules, 2017 — mandatory digital/e-signature authentication of notices and orders.

Decision – In Favour of

The writ petition was allowed in favour of the Assessee, with the impugned order set aside and the department granted liberty to initiate fresh, properly authenticated proceedings under Section 73.

Case Details

Court: Gauhati High Court
Case No.: WP(C)/5937/2025
Coram: Hon'ble Mr. Justice Sanjay Kumar Medhi
Date of Order: 17.10.2025

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.