Order Passed without issuance of Proper Show Cause Notice and without giving an opportunity of being heard is liable to be Quashed

The Hon’ble Gauhati High Court in the case of MS GANAPATI ENERPRISE AND ANR, BHARGAB SAIKIA VERSUS THE STATE OF ASSAM AND ORS, THROUGH THE COMMISSIONER AND SECRETARY TO THE GOVT OF ASSM MINISTRY OF FINANCE AND TAXTATION KAR BHAWAN GANESGURI GUWAHATI ASSAM, THE COMMISSIONER OF STATE TAX. THE ASSISTANT COMMISSIONER OF STATE TAX, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS - 2025 (5) TMI 144 - GAUHATI HIGH COURT set aside the Impugned Order and the summary of show cause notice (“SCN”) on the ground that the Impugned order was passed without issuance of a proper SCN under Section 73(1) of the Central Goods and Services Tax Act, 2017(“the CGST Act”) and without affording an opportunity of personal hearing to the Petitioner. Relying on its earlier judgment in CONSTRUCTION CATALYSERS PRIVATE LIMITED, THE ASSAM GRAMIN VIKASH BANK, M/S. NITAI KANGSA BANIK AND ANR., THE ASSAM GRAMIN VIKASH BANK (FORMERLY KNOWN AS LANGPI DEHANGI RURAL BANK), AURORA FINE ARTS VERSUS STATE OF ASSAM AND, THE PRINCIPAL COMMISSIONER OF STATE TAX, THE ASSISTANT COMMISSIONER OF STATE TAX GUWAHATI, THE UNION OF INDIA, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS NEW DELHI, THE PRINCIPAL COMMISSIONER STATE GST, ASSAM, THE ASSISTANT COMMISSIONER OF STATE TAX SILCHAR. - 2024 (10) TMI 279 - GAUHATI HIGH COURT, the Hon’ble Court observed that the issues involved in the present writ petition were similar and, therefore, the determination and directions contained in paragraph 29 of the Construction Catalysers Pvt. Ltd. v. State of Assam (supra) would apply to the present case as well.

Facts:

M/s. Ganapati Enterprise (“the Petitioner”) has filed a writ petition challenging the order dated April 28, 2024 (“the Impugned Order”) passed by the Adjudicating Authority (“the Respondent”) on the ground that the Impugned order was issued without service of a proper SCN under Section 73(1) of the CGST Act. Despite a request for a personal hearing, no such opportunity was granted to the Petitioner, and the Respondent thereafter passed the Impugned Order.

Issue:

Whether an order can be held to be valid if passed without issuance of a proper SCN and without granting an opportunity of personal hearing?

Held:

The Hon’ble Gauhati High Court in MS GANAPATI ENERPRISE AND ANR, BHARGAB SAIKIA VERSUS THE STATE OF ASSAM AND ORS, THROUGH THE COMMISSIONER AND SECRETARY TO THE GOVT OF ASSM MINISTRY OF FINANCE AND TAXTATION KAR BHAWAN GANESGURI GUWAHATI ASSAM, THE COMMISSIONER OF STATE TAX. THE ASSISTANT COMMISSIONER OF STATE TAX, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS - 2025 (5) TMI 144 - GAUHATI HIGH COURTheld as under:

• The issues involved in the present writ petition were identical to the one already considered in paragraph 29 of the judgement passed by the Coordinate Bench in WP(C) No. 3912/2024dated September 26, 2024 in the case of Construction Catalysers Pvt. Ltd. v. State of Assam [supra]. The directions given in paragraph 29 of the said judgment governed the outcome of the present matter as well.
• The Hon’ble Gauhati High Court in Construction Catalysers Pvt. Ltd. v. State of Assam [supra] held that the Summary of the SCN in Form GST DRC-01 cannot be considered as a substitute for a proper SCN issued under Section 73(1) of the CGST Act. Additionally, the Statement of determination of tax issued under Section 73(3) of the CGST Act, does not replace the requirement of issuance of a detailed SCN by the Proper Officer, in terms of Section 73(1) of the CGST Act. Moreover, it emphasized that all communications—including the SCN, statement of determination of tax, and the order—must be issued in their respective formats (GST DRC-01, GST DRC-02, and GST DRC-07) and properly authenticated in the manner provided under Rule 26(3) of the Central Goods and Services Tax Rules, 2017(“the CGST Rules”).
• Further, the Court had also observed in Construction Catalysers Pvt. Ltd. v. State of Assam (supra) that, orders passed without granting an opportunity of personal hearing violate Section 75(4) of the CGST Act and are therefore not sustainable.
• It was accordingly held, that the issues involved in Construction Catalysers Pvt. Ltd. v. State of Assam (supra) and the present writ petition were similar, and therefore the present writ petition was disposed of by setting aside the Impugned Order dated April 28, 2024 and the summary of the SCN dated December 13, 2023.

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