Summary in GST Form DRC-01 Cannot Substitute Mandatory SCN, Unsigned & Incomplete Notice Invalid: Gauhati HC Quashes Order [Read Order]
The Gauhati High Court ruled that a summary in GST Form DRC-01 cannot replace a mandatory show cause notice and quashed the unsigned and incomplete tax notice as legally invalid.
GST Form DRC-01 - SCN - Unsigned - Incomplete Notice Invalid - Gauhati HC - taxscan
GST Form DRC-01 - SCN - Unsigned - Incomplete Notice Invalid - Gauhati HC - taxscan
In a recent ruling, the Gauhati High Court held that a summary issued in GST Form DRC-01 cannot substitute the mandatory show cause notice required under Section 73(1) of the GST Act, and that an unsigned and incomplete notice is legally invalid.
The case arose from a writ petition filed by Diganta Kumar Deka challenging the order dated 27 December 2023 passed by the Assistant Commissioner of State Tax, Guwahati under Section 73(9) of the Assam Goods and Services Tax Act, 2017 for the tax period July 2017 to March 2018. The petitioner stated that the order was passed without serving a proper show cause notice and without providing an opportunity of hearing as required by law.
The petitioner’s counsel argued that only a summary of the show cause notice in Form GST DRC-01 was issued electronically, and the attached document contained a tax determination sheet rather than a proper notice requiring him to show cause. They also argued that the document was not digitally signed or authenticated by the proper officer and that no date or venue for a personal hearing was mentioned.
The counsel submitted that under Rule 142 of the CGST Rules, 2017, a summary in Form DRC-01 is supplementary and cannot replace the mandatory show cause notice, and under Rule 26(3), all notices and orders must be authenticated with a digital signature or e-signature by the proper officer.
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The State’s counsel argued that the summary issued in Form GST DRC-01 was accompanied by a determination of tax that contained sufficient information for the petitioner to respond, and that uploading the document on the GST portal required digital authentication. They admitted that no separate detailed show cause notice was issued apart from the summary and the attachment.
The bench comprising Justice Sanjay Kumar Medhi observed that under Section 73(1) of the GST Act, a formal show cause notice must be issued before initiating proceedings and that a summary in Form GST DRC-01 cannot serve as a substitute for such notice.
The court explained that the attachments to Forms DRC-01 and DRC-07 were not digitally authenticated and only contained the words “Sd/- Proper Officer,” which did not meet the requirement of Rule 26(3).
The court also pointed out that the summary of the show cause notice left the column for the date and venue of a personal hearing blank, which violated Section 75(4) of the Act. The court held that the unsigned and incomplete notice issued in Form GST DRC-01 was legally invalid, and the order dated 27 December 2023 was quashed. The writ petition was allowed.
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