Proper show cause notice under GST law is mandatory before tax demand orders; DRC-01 summary cannot substitute it.

A demand order under the Assam GST Act, 2017 was found unsustainable because the proper officer had not served a valid prior show cause notice under Section 73(1). A summary in FORM GST DRC-01, even with an attachment showing tax determination, was held not to replace the statutory notice required by Section 73. The court noted that the prescribed sequence under Section 73-notice, any statement under sub-section (3), and then an order under sub-section (9)-had not been followed, and also referred to compliance with the hearing requirement in Section 75(4). The order was therefore set aside and quashed for breach of mandatory procedure.

---

---

Issues: Whether the impugned demand order under Section 73 of the Assam Goods and Services Tax Act, 2017 was sustainable when no proper prior show cause notice under Section 73(1) had been issued and only a summary in FORM GST DRC-01 together with an attachment showing determination of tax had been served.

Analysis: The governing scheme under Section 73 of the Assam Goods and Services Tax Act, 2017 requires the proper officer to serve a show cause notice under sub-section (1), followed where appropriate by a statement under sub-section (3), and thereafter to pass an order under sub-section (9). Rule 142(1)(a) of the Assam Goods and Services Tax Rules, 2017 contemplates service of a summary in FORM GST DRC-01 along with the notice, but the summary is not a substitute for the statutory show cause notice. The Court found that the record disclosed only a summary of show cause notice and an attachment to determination of tax, without a valid prior notice under Section 73(1). In these circumstances, the initiation of proceedings and the resulting order could not be treated as compliant with the mandatory statutory procedure. The Court also relied on the requirement of compliance with Section 75(4) where hearing is required.

Conclusion: The impugned order was held unsustainable in law and was set aside and quashed for want of a proper prior show cause notice and non-compliance with the statutory procedure.

---