Mandatory show cause notice under GST cannot be replaced by DRC-01 summary; defective proceedings were set aside.

A proper show cause notice under Section 74(1) of the Jharkhand GST Act is mandatory, and a summary in Form DRC-01 cannot replace the notice because it does not itself set out the foundational allegations needed to answer the charge. Proceedings initiated without such a notice are jurisdictionally defective and offend natural justice; the defect is not cured by the taxpayer's reply, participation, or later rectification. The court therefore set aside the impugned GST proceedings, assessment orders and rectification orders, while reserving liberty to initiate fresh proceedings from the proper stage in accordance with law.

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Issues: (i) Whether a summary of show cause notice in Form DRC-01 can substitute the mandatory show cause notice required under Section 74(1) of the Jharkhand Goods and Services Tax Act, 2017. (ii) Whether the impugned proceedings, assessment orders and rectification orders were vitiated for want of a proper notice and violation of principles of natural justice, and whether the petitioner's reply or later rectification cured the defect.

Issue (i): Whether a summary of show cause notice in Form DRC-01 can substitute the mandatory show cause notice required under Section 74(1) of the Jharkhand Goods and Services Tax Act, 2017.

Analysis: Rule 142(1)(a) of the Jharkhand Goods and Services Tax Rules, 2017 requires the summary of the show cause notice to be issued along with the notice under Section 74(1). The statutory scheme treats the summary as an electronic record for tracking proceedings, but not as a replacement for the actual notice. A notice under Section 74 must clearly set out the foundational allegations, including the ingredients that attract the stricter consequences under that provision, so that the noticee can meaningfully answer the charge.

Conclusion: DRC-01 is not a substitute for the mandatory show cause notice under Section 74(1), and issuance of the summary alone does not satisfy the statutory requirement.

Issue (ii): Whether the impugned proceedings, assessment orders and rectification orders were vitiated for want of a proper notice and violation of principles of natural justice, and whether the petitioner's reply or later rectification cured the defect.

Analysis: The proceedings were initiated without a proper notice disclosing the essential basis of action under Section 74(1). In such a case, the defect goes to jurisdiction and cannot be cured by the assessee's reply, consent, or participation. The later adjudication and rectification orders could not validate a proceeding that had its foundation in a procedurally defective notice. The absence of a legally sufficient notice also amounted to denial of a reasonable opportunity of defence and violation of natural justice.

Conclusion: The proceedings, assessment orders and rectification orders were vitiated and liable to be quashed, and the petitioner's reply did not cure the defect.

Final Conclusion: The writ applications succeeded, the impugned GST proceedings were set aside, and liberty was reserved to initiate fresh proceedings in accordance with law from the proper stage.

Ratio Decidendi: In proceedings under Section 74 of the Jharkhand Goods and Services Tax Act, 2017, a proper show cause notice stating the essential allegations is mandatory, and a summary notice in Form DRC-01 cannot cure its absence or confer jurisdiction by participation or consent.

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