GST S.73 Order Passed Without SCN and Hearing: Gauhati HC sets aside Orders [Read Order]

The Gauhati High Court has set aside a GST ( Goods and Services Tax ) order that was passed without issuing a proper show cause notice or providing an opportunity for personal hearing to the assessee.

The matter was heard by Justice Arun Dev Choudhury, who found that the order violated procedural safeguards mandated under the CGST Act, 2017.

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The petitioner, M/s Ganapati Enterprise, challenged an order dated 28.04.2024 issued by the Assistant Commissioner of State Tax, Nagaon, Assam, on the ground that it was passed without a show cause notice as required under Section 73(1) of the CGST Act. The petitioner also contended that no opportunity of personal hearing was provided before passing the final order.

The State's counsel did not dispute these procedural lapses. Both sides acknowledged that the legal issue was squarely covered by a prior decision of the same High Court in Construction Catalysers Pvt. Ltd. v. State of Assam & Others, decided on 26.09.2024.

In the above cited case, the Court had held that a summary of a show cause notice issued in Form GST DRC-01 cannot be a substitute for a proper show cause notice under Section 73(1). It also held that mere attachment of a tax determination statement under Section 73(3) does not fulfil the statutory requirement of issuing a formal notice.

Referring to the earlier decision, the Court reiterated that initiation of proceedings and passing of orders under Section 73 require the issuance of a valid show cause notice and a hearing, failing which such orders are liable to be quashed.

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It was further noted that the absence of these procedural safeguards amounted to a violation of Section 75(4) of the CGST Act, which mandates a reasonable opportunity of being heard before passing any adverse order.

Accordingly, the Gauhati High Court set aside the impugned GST order dated 28.04.2024 and the corresponding summary of the show cause notice dated 13.12.2023. However, the Court granted liberty to the tax authorities to initiate fresh proceedings under Section 73, if deemed appropriate, while excluding the period consumed in the earlier proceedings for limitation purposes.

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