Show Cause Notice requirement: unauthenticated summaries cannot substitute for a valid SCN, and hearings must be afforded before adverse tax orders.

Impugned GST proceedings failed because a distinct, duly issued and authenticated show cause notice was not issued as required; summaries in FORM GST DRC-01/DRC-07 are supplementary and cannot substitute for the primary SCN, and attachments lacking electronic authentication by the proper officer under the rules have no legal efficacy. Further, adverse orders were passed without affording the statutorily mandated opportunity of hearing, contrary to the hearing safeguard and principles of natural justice. Resulting orders were set aside and fresh proceedings under the tax provision may be initiated subject to limitation computation rules.

---

---

Issues: (i) Whether Show Cause Notices were issued prior to passing the impugned order under Section 73 of the Act; (ii) Whether the determination of tax and the order attached to the summaries in FORM GST DRC-01 and GST DRC-07 can be treated as the Show Cause Notice and Order respectively; (iii) Whether the impugned orders under Section 73(9) conform to Section 75(4) and the principles of natural justice.

Issue (i): Whether Show Cause Notices were issued prior to passing the impugned order under Section 73 of the Act.

Analysis: Section 73 prescribes circumstances and the manner in which a show cause notice and related statement must be issued; subsections require issuance of a SCN distinct from a statement of determination. Rule 142(1)(a) requires a summary in FORM GST DRC-01 in addition to the SCN and the statement. The statutory scheme thereby distinguishes between a primary SCN and a supplementary summary.

Conclusion: No valid Show Cause Notice, as required under Section 73, was issued prior to passing the impugned order.

Issue (ii): Whether the determination of tax and the order attached to the summaries in FORM GST DRC-01 and GST DRC-07 can be treated as the Show Cause Notice and Order respectively.

Analysis: The statement of determination and attachments to the summary do not satisfy the statutory requirements for a SCN under Section 73(1). Rule 26(3) prescribes electronic authentication by the proper officer for notices and orders; lacking the mandated authentication, the attachments lack legal efficacy. Rule 142(1)(a) shows the summary is supplementary and not a substitute for primary documents. Authorities applying these requirements have held unsigned or unauthenticated attachments invalid.

Conclusion: The determination of tax and the attached documents in the summaries cannot be treated as a valid Show Cause Notice or Order.

Issue (iii): Whether the impugned orders under Section 73(9) conform to Section 75(4) and the principles of natural justice.

Analysis: Section 75(4) mandates an opportunity of hearing where an adverse decision is contemplated regardless of whether a written request is made. The summaries filed left hearing details blank and no personal hearing was granted before passing adverse orders. Passing adverse orders without granting the mandated hearing undermines the statutory safeguard and principles of natural justice.

Conclusion: The impugned orders are not in conformity with Section 75(4) and violate principles of natural justice.

Final Conclusion: The impugned order is set aside for want of a valid show cause notice, for lack of required authentication, and for contravention of the hearing mandate under Section 75(4); respondents are permitted to initiate fresh proceedings under Section 73, subject to exclusion of the period specified for limitation computation.

Ratio Decidendi: A summary in FORM GST DRC-01/DRC-07 is supplementary and cannot substitute a properly issued and duly authenticated show cause notice under Section 73; notices, statements and orders under Section 73 must be issued by the proper officer and authenticated in accordance with Rule 26(3) to be valid, and an opportunity of hearing must be afforded when an adverse decision is contemplated under Section 75(4).

---