Proper show-cause notice under GST cannot be replaced by a vague DRC-01 summary notice lacking hearing and disclosure.

Under the Jharkhand GST regime, a summary notice in Form GST DRC-01 cannot substitute for a proper show-cause notice under Section 74(1) unless it clearly states the foundational allegations and affords a real chance to reply. Where the notice is vague, predetermined in format, and omits the essential basis of fraud, wilful misstatement, or suppression, it is legally unsustainable. Adjudication orders and consequential demand notices are also invalid where no effective opportunity of hearing is granted, relied-upon documents are not supplied, and the proceedings bypass the safeguards in Sections 75(4) and 75(5), amounting to a breach of natural justice.

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Issues: (i) Whether the summary of show-cause notice in Form GST DRC-01, issued under the Jharkhand Goods and Services Tax Act, 2017, could substitute a proper notice under Section 74(1) when it did not clearly set out the foundational allegations or call for a reply. (ii) Whether the adjudication orders and consequential demand notices were vitiated for denial of opportunity of hearing and other violations of natural justice.

Issue (i): Whether the summary of show-cause notice in Form GST DRC-01, issued under the Jharkhand Goods and Services Tax Act, 2017, could substitute a proper notice under Section 74(1) when it did not clearly set out the foundational allegations or call for a reply.

Analysis: Section 74(1) requires the proper officer to serve a notice requiring the person chargeable with tax to show cause against the proposed demand of tax, interest, and penalty. The recorded materials showed that the DRC-01 form used in these cases was in a predetermined format, did not specify a date for reply or hearing, and did not disclose the essential ingredients of the alleged fraud, wilful misstatement, or suppression of facts with sufficient clarity. A summary notice under Rule 142(1) cannot replace the statutory requirement of a proper show-cause notice. The absence of specific and clear allegations left the petitioners without a fair chance to answer the charge.

Conclusion: The summary notice was not a valid substitute for a proper notice under Section 74(1) and was legally unsustainable.

Issue (ii): Whether the adjudication orders and consequential demand notices were vitiated for denial of opportunity of hearing and other violations of natural justice.

Analysis: The record showed that no effective opportunity to file a reply or seek hearing was granted before the adjudication orders were passed. The relied-upon materials were not supplied, and the proceedings moved directly from the summary notice to confirmation of the proposed liability. In proceedings of this nature, Sections 75(4) and 75(5) require an opportunity of hearing where an adverse decision is contemplated and permit adjournment for sufficient cause. The failure to follow these safeguards, together with non-supply of relied-upon documents, amounted to a clear breach of natural justice and justified judicial interference in writ jurisdiction.

Conclusion: The adjudication orders and demand notices were vitiated by breach of natural justice and could not be sustained.

Final Conclusion: The impugned proceedings were set aside, and the tax authorities were left free to commence fresh proceedings by issuing a proper notice and proceeding in accordance with law without being influenced by the earlier orders.

Ratio Decidendi: In proceedings under Section 74 of the Jharkhand Goods and Services Tax Act, 2017, a vague summary notice in Form GST DRC-01 cannot replace a proper show-cause notice, and any adjudication made without a fair opportunity of hearing and disclosure of the basis of the demand is invalid for breach of natural justice.

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