Gauhati HC Quashes GST Demand due to Lack of Proper Show Cause Notice, u/s 73 of CGST Act [Read Order]
HC held that a mere summary of a show cause notice does not satisfy the legal requirements under the law.
![Gauhati HC Quashes GST Demand due to Lack of Proper Show Cause Notice, u/s 73 of CGST Act [Read Order]](https://images.taxscan.in/h-upload/2025/06/30/2057080-gst-demand-taxscan.webp "Gauhati HC Quashes GST Demand due to Lack of Proper Show Cause Notice, u/s 73 of CGST Act [Read Order]")
PHANIDHAR BORSAIKIAIn a recent ruling passed on 24-6-25, the High Court of Chhattisgarh has quashed a GST demand against a petitioner after finding that tax authorities failed to issue a proper show cause notice under Section 73(1) of the Central Goods andServices Tax (CGST) Act, 2017.
Coming to the facts of the case, the petitioner had filed a writ petition challenging an order issued by the Assistant Commissioner of State Tax, which demanded GST without first issuing a valid show cause notice under Section 73(1) of the CGST Act.
The petitioner argued that only a summary of the show cause notice (in Form GST DRC-01) was issued on 8-5-2024, followed by a summary of the order (Form GST DRC-07) on 30-8-2024, without any proper notice or opportunity for hearing. The respondents admitted in their affidavit that no formal show cause notice under Section 73(1) had been issued.
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The court relied on a previous judgement passed by its coordinate bench in the case of Construction Catalysers Pvt. Ltd. vs. The State of Assam & Ors. (WP(C) No. 3912/2024), in which the coordinate bench held that a summary of a show cause notice (GST DRC-01) cannot replace a proper notice under Section 73(1). The earlier judgement had clarified that the initiation of proceedings under Section 73 without a valid show cause notice is legally unsustainable. The court noted that the impugned order violated Section 75(4) of the CGST Act, which mandates an opportunity for hearing before passing any adverse order.
The bench, by relying on the above-mentioned case, quashed the summary of the show cause notice (dated May 8, 2024) and the summary of the order dated 30-8-2024. The court granted the tax authorities the liberty to initiate fresh proceedings under Section 73 of the CGST Act, if necessary, for the relevant financial year. The judgement also directed that the period between the issuance of the defective notice and the service of the court’s order on the proper officer should be excluded when computing the limitation period for passing a fresh order under Section 73(10) of the CGST Act.
The Gauhati HC, comprising of Justice Arun Dev Choudhury, held that a mere summary of a show cause notice does not satisfy the legal requirements under the law.
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