GST | Issuance Of Only Summary SCN Without Proper, Signed Notice Violates Statutory Provisions: Gauhati High Court

The Gauhati High Court has set aside a GST demand order after holding that issuance of only a summary of a show cause notice without a proper, signed notice violates statutory provisions and principles of natural justice. The bench of Justice Soumitra Saikia ordered the immediate de-freezing of the taxpayer’s bank accounts, which had been attached pursuant to the impugned order. The writ petition arose from proceedings initiated under Section 73 of the Central Goods and Services Tax Act, 2017 and the corresponding Assam GST Act. The tax department issued a Summary of Show Cause Notice in Form GST DRC-01dated May 2, 2024, stating that a show cause notice was “attached.” However, no actual show cause notice was served on the taxpayer. Instead, the attachment merely contained a statement of tax determination. As no formal show cause notice was available on record, the taxpayer did not file a reply. Subsequently, an order dated August 29, 2024 was passed in Form GST DRC-07, confirming the tax demand on the ground that the notice had not been contested. The taxpayer approached the High Court alleging violation of statutory procedure, denial of personal hearing, absence of authentication by the Proper Officer, and unlawful freezing of bank accounts. The Court examined multiple questions of law, including whether a Summary of Show Cause Notice in Form GST DRC-01 can substitute a proper show cause notice under Section 73(1); whether an unsigned attachment containing tax determination can be treated as a valid show cause notice; whether passing an adverse order without granting a personal hearing violates Section 75(4); and whether GST notices and orders lacking digital or electronic authentication are legally sustainable. The court categorically held that a summary issued in Form GST DRC-01 is only an additional requirement and cannot replace the mandatory issuance of a proper show cause notice under Section 73(1). The Court emphasized that the statute clearly distinguishes between a show cause notice and a statement of tax determination under Section 73(3). The Court rejected the department’s argument that the tax determination attachment constituted the show cause notice, observing that such an approach defeats the very purpose of Section 73, which requires specific reasons and grounds to be communicated so that the taxpayer can meaningfully respond. The High Court also found merit in the contention that the attachments to both GST DRC-01 and GST DRC-07 were not authenticated by the Proper Officer. Referring to Rule 26(3) of the CGST Rules and judicial precedents from Telangana, Andhra Pradesh, Delhi, and Jharkhand High Courts, the Court held that authentication by digital signature or e-signature is mandatory, even for demand and recovery proceedings. It ruled that mere mention of “Sd/- Proper Officer” without actual digital authentication renders the documents legally ineffective. The Court further noted that the taxpayer had explicitly sought a personal hearing in Form GST DRC-06, yet no hearing was granted. Citing Section 75(4), the Court held that where an adverse decision is contemplated, granting an opportunity of hearing is mandatory, even if no written reply is filed. Passing an order without such hearing was held to be a clear breach of natural justice. Setting aside the GST order dated August 29, 2024, the High Court quashed the impugned demand order for being contrary to Section 73, Rule 142, Rule 26(3), and Section 75(4). The court directed de-freezing of the taxpayer’s bank accounts with immediate effect and granted liberty to the tax authorities to initiate fresh proceedings de novo, if permissible in law. The court ordered exclusion of the period between issuance of the summary notice and service of the judgment while computing limitations under Section 73(10). Case Details Case Title: Md Shoriful Islam Versus The State Of Assam Case No.: WP(C)/471/2026 Date: 06-02-2026 Counsel For Petitioner: R S Mishra, M Dey, B Sarma Counsel For Respondent: SC, Finance And Taxation Click Here To Read Order Read More: GST Assessment Not Invalid Merely for Absence of DIN if Portal-Generated Reference Number Exists: Andhra Pradesh High Court

GST | Issuance Of Only Summary SCN Without Proper, Signed Notice Violates Statutory Provisions: Gauhati High Court

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