Tax order quashed for issuing summary notice instead of proper show cause notice under Section 73 AGST Act

The Gauhati HC quashed an order passed under Section 73(9) of the AGST Act, 2017 for non-compliance with mandatory procedural requirements. The court held that issuance of only a Summary of Show Cause Notice and Attachment to Determination of Tax, without a proper Show Cause Notice as required under Section 73(1), violated statutory provisions and natural justice principles. The HC ruled that a Summary of Show Cause Notice cannot substitute the mandatory Show Cause Notice contemplated under the Act, making compliance with sub-sections (1) to (8) and (10) to (11) of Section 73 conditions precedent for a valid order under sub-section (9).

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Issues:
1. Validity of the Order dated 30.12.2023 passed under Section 73 of the Assam Goods and Services Tax Act, 2017.
2. Compliance with the provisions of Section 73 for issuance of Show Cause Notice.
3. Conformity of the impugned orders with Section 75 [4] and principles of natural justice.

Analysis:

Issue 1: Validity of the Order dated 30.12.2023
The petitioner challenged the Order dated 30.12.2023 passed under Section 73 of the Assam Goods and Services Tax Act, 2017, on the grounds of improper Show Cause Notice. The petitioner contended that the Summary of Show Cause Notice in Form GST DRC-01 was not in conformity with Section 73 read with Rule 142 [1] [a] of the Act. The Court found that the Summary of Show Cause Notice cannot substitute the actual Show Cause Notice required under Section 73 [1] to initiate proceedings. The Court set aside and quashed the impugned orders due to non-compliance with the legal requirements.

Issue 2: Compliance with the provisions of Section 73 for issuance of Show Cause Notice
The Court emphasized that a proper Show Cause Notice under Section 73 [1] is a prerequisite for initiating proceedings. The Court highlighted that the Statement of determination of tax attached to the Summary of Show Cause Notice cannot replace the Show Cause Notice as mandated by the law. It was ruled that compliance with the provisions of Section 73, including issuance of proper notices by the Proper Officer, is essential for a valid order under Section 73 [9].

Issue 3: Conformity with Section 75 [4] and principles of natural justice
The Court found that the impugned orders were in violation of Section 75 [4] as no opportunity of hearing was granted. It was concluded that the impugned orders lacked compliance with the principles of natural justice. Consequently, the Court set aside and quashed the impugned orders and granted liberty to the respondent authorities to initiate fresh proceedings under Section 73, ensuring adherence to legal requirements and principles of natural justice.

In conclusion, the Court held that the impugned Order dated 30.12.2023 was not sustainable due to the absence of a proper Show Cause Notice. The judgment emphasized the importance of procedural compliance and adherence to legal provisions for the validity of orders under the Assam Goods and Services Tax Act, 2017.

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