The Gauhati High Court in a recent case has held that the Summary of Show Cause Notice ( SCN ) in GST DRC-01 is not same as the Show Cause Notice to be issued in terms with Section 73 [1] of the Central Goods and Service Tax Act, 2017 as well as the State Act.
Udit Tibrewal, the petitioner has stated that he used to deal in the business of trade and supply of mobile phones, etc. at Tezpur, Assam in the name and style of M/s High Tech Marketing and for the purpose of carrying the business, he had registered himself under the Goods and Services Tax [GST].
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The petitioner has approached the Court by the instant writ petition to assail an Order passed by the respondent no. 4 purportedly in exercise of powers conferred under Section 73 of the Assam Goods and Services Tax Act, 2017. One of the grounds on which the Order has been challenged is that there was no proper and prior Show Cause Notice prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 and the petitioner was only served with a Summary of Show Cause Notice in Form GST DRC-01, which is also not in conformity with Section 73 read with Rule 142[1][a] of the Assam Goods and Services Tax Act, 2017.
Section 73 of the Central Goods and Services Tax [CGST] Act, 2017 and sub- rule [1] of Rule 142 of the Central Goods and Services Tax Rules, 2017, which provisions are pari materia to Section 73 of the AGST Act and Rule 142[1] of the AGST Rules, 2017,
Mr. Goyal, counsel for the petitioner has referred to a number of other contentions raised and pleaded in this writ petition. Mr. Gogoi, Standing Counsel, Finance & Taxation Department has submitted that the common Judgment and Order dated 26.09.2024 has been passed after hearing all the sides and some of the observations made therein would cover the case of the petitioner herein.
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The Court observed that 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 provision of Section 73 into motion.
It was further viewed that SCN 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
A single bench of Justice Manish Choudhury quashed and set aside the impugned Order. Furtherviewed that “non-issuance of a proper and prior Show Cause Notice, as contemplated under sub-section [1] of Section 73 of AGST Act, 2017 and issuance of only Summary of Show Cause Notice and Attachment to Determination of Tax cannot be said to be in compliance with sub-section [1] of Section 73 and sub-rule [1] and Rule 142 of the AGST Rules, 2017, a Summary of Show Cause Notice is held to be not a substitute of a Show Cause Notice, contemplated by the provisions of sub-section [1] of Section 73 to set the proceeding in motion.”
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