Vague GST show cause notice and defective DRC-01 summary cannot sustain tax demand without clear allegations and factual basis.

A show cause notice issued under the Jharkhand GST Act was held invalid where it used a mechanical format, did not clearly specify the alleged contravention, and failed to state the factual basis for the proposed demand. The accompanying FORM GST DRC-01 summary could not cure those defects or replace a proper notice. Because tax, interest, or penalty cannot be imposed on grounds not stated with clarity, the notices were found vague, non-compliant with fair notice requirements, and contrary to natural justice. They were therefore unsustainable in law.

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Issues: Whether the show cause notice and the summary in FORM GST DRC-01 issued under Section 73 of the Jharkhand Goods and Services Tax Act, 2017 were invalid for want of specific allegations and particulars, and whether they violated the principles of natural justice.

Analysis: The notice was issued in a mechanical format without striking out irrelevant portions and without clearly stating the contravention alleged against the noticee. The accompanying DRC-01 summary also failed to set out the specific factual basis showing which works contract receipts were not disclosed or how the alleged liability arose. A summary notice in DRC-01 cannot replace a proper show cause notice, and tax, interest, or penalty cannot be imposed on grounds not stated in the notice. The requirement of fair notice demands that the material grounds and the basis of the proposed action be made clear so that an effective defence can be put forward.

Conclusion: The notices were held to be vague and non-compliant with the requirements of a proper show cause notice, and therefore unsustainable in law.

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