The Gauhati High Court has held that merely attaching a tax computation statement to a DRC-01 summary does not amount to a valid SCN. Under Rule 142, the summary is only supplementary and cannot replace a full-fledged notice.
The bench of Justice Sanjay Kumar Medhi has quashed a tax demand order issued against a Bongaigaon-based trader on the grounds of defective Show Cause Notice (SCN) and violation of natural justice principles.
The petitioner, Naser Ali Mondal, was issued a summary of Show Cause Notice (Form GST DRC-01) on December 5, 2023, demanding tax under Section 73 of the Assam GST Act. The summary was accompanied by a determination of tax but did not include a properly signed and authenticated Show Cause Notice. No opportunity of personal hearing was granted, and a final order (DRC-07) was passed on April 29, 2024.
Mondal’s counsel, Advocate Amit Goyal, argued that the attachments in DRC-01 and DRC-07 did not meet the requirements of Rule 26 and Rule 142 of the CGST Rules, 2017, as they lacked proper authentication and failed to provide an opportunity for a hearing. Crucially, the SCN did not inform the petitioner that he was required to “show cause”, nor did it mention a hearing date.
The Court examined three core questions:
Firstly, whether a proper SCN was issued under Section 73(1) before the order under Section 73(9)?
Secondly, whether the attached tax determination in DRC-01 and DRC-07 could be treated as a valid SCN and order?
Lastly, whether the order conformed to the hearing requirement under Section 75(4) and natural justice principles?
The Court held that the documents lacked proper digital or e-signatures as required under Rule 26(3), making them legally unsustainable. The mention of “Sd/- Proper Officer” was found insufficient.
The Court noted that the field for “date of hearing” was marked as “NA”, by denying the petitioner the mandatory opportunity of hearing required under Section 75(4) — even if no hearing was specifically requested.
The Court relied on multiple High Court rulings, including Silver Oak Villas LLP (Telangana HC), A.V. Bhanoji Row (AP HC), and Mahindra & Mahindra Ltd (Chhattisgarh HC), which affirmed the necessity of a valid SCN and the right to a hearing in adjudication proceedings.
The High Court ruled that the GST order is set aside for being passed without a valid SCN and for denial of fair hearing. The respondents are at liberty to initiate fresh proceedings under Section 73, if deemed appropriate. The time elapsed between the initial SCN summary and the receipt of this judgment shall be excluded from the limitation period under Section 73(10) for any fresh action.
Case Details
Case Title: Naser Ali Mondal Versus The State Of Assam And 2 Ors
Case No.: Case No. : WP(C)/4157/2025
Date: 31.07.2025
Counsel For Petitioner: Amit Goyal, Advocate
Counsel For Respondent: B. Choudhury, SC, Finance & Taxation Department
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