TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 268
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....assed on 19.12.2023 in GST DRC-07 and the reason assigned is that the assessee failed to make payment within 30 days of issue of notice. It is contended that the attachment as well as the Summary of the Order uploaded in GST DRC-01 and GST DRC-07 were not authenticated by any signature of the Proper Officer. 4. This Court had passed an order dated 30.05.2025 requiring the learned counsel appearing on behalf of the respondent authorities as to whether there were proper Show Cause Notices. In reply thereto, no positive response could be made. 5. Shri Goyal, the learning counsel appearing on behalf of the petitioners submitted that it is the requirement in terms of Rule 142 of the Central Goods and Services Tax Rules, 2017 (for short, 'the Rules of 2017') that the notice under Section 73 has to be issued and a summary thereof is to be additionally issued electronically in Form GST DRC-01. The learned counsel for the petitioners submitted that under no circumstances the attachment to the GST DRC-01 can be said to be a Show Cause Notice inasmuch as in the said attachment, there is no mention that the petitioner is required to show cause. Additionally, he submitted that the said attach....
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....at irrespective of a request made or not but when an adverse decision is contemplated an opportunity for hearing is mandated. The learned counsel for the petitioner had referred to the judgment of the learned Division Bench of the Chhattisgarh High Court in the case of Mahindra & Mahindra Limited vs. Union of India and Others, (WA No.172/2024) delivered on 10.04.2024 wherein the learned Division Bench dealt with the scope and ambit of Section 75 (4) of the Central Act and observed that when the statute contains a mandate of hearing which is a synonym to natural justice, it cannot be given a go by or can be made porous. The learned counsel for the petitioner therefore submitted that in the instant cases as the impugned orders have been passed without giving a proper opportunity of hearing as mandated under Section 75 (4) of both the Central Act as well as the State Act, the impugned orders are liable to be interfered with. 7. Per contra, Shri Gogoi, the learned Standing Counsel, Finance and Taxation Department of the Government of Assam submitted that the respondent authorities have issued the Summary of the Show Cause Notice in Form DRC-01 which was accompanied by the determinatio....
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....d or utilized, for any reason other than the reason of fraud or any willful misstatement or suppression of facts to evade tax. 10. Considering that it is only in the circumstances referred to above, the Proper Officer is mandated to issue a SCN only under specific circumstances as outlined in Section 73. Therefore, the SCN must clearly state the reasons and circumstances justifying its issuance under this section. Only then can the recipient effectively respond, particularly if they wish to challenge the applicability of Section 73. Section 73(9) requires the Proper Officer to determine the tax, interest, and penalty after considering the representation. Section 73(2) and 73(10) are interconnected, while Section 73(10) allows passing the order within three years from the due date of the annual return, Section 73(2) mandates that the SCN must be issued at least three months before the deadline. Furthermore, a combined reading of subsections (1) to (4) of Section 73 shows that the legislature has made a clear distinction between a Show Cause Notice and a Statement. Even if a Statement is issued under Section 73(3), a separate and proper SCN is still required. 11. It may be noted t....
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.... clarified that a Statement under Section 73(3) cannot substitute a SCN under Section 73(1). Therefore, the respondent's claim that the statement attached to the Summary in GST DRC-01 constitutes a valid SCN is misconceived and contrary to law. Moreover, the submission made on behalf of the petitioner finds force that the attachments to both DRC-01 and DRC-07 summaries lack legal value, as they bear no authentication by the Proper Officer, violating Rule 26(3). In this connection, reliance may be put on the judgments in M/s Silver Oak Villas LLP (supra) and A.V. Bhanoji Row (supra) which emphasize the necessity of proper authentication for such documents to be valid. 17. Rule 26 (3) of the Rules of 2017 reads as follows: "26. (3) All notices, certificates and orders under the provisions of this Chapter shall be issued electronically by the proper officer or any other officer authorized to issue such notices or certificates or orders, through digital signature certificate [or through E-signature as specified under the provisions of the Information Technology Act, 2000 (21 of 2000) or verified by any other mode of signature or verification as notified by the Board in this behal....
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....rules or notifications are issued by the Board to address this gap, Rule 26(3), which requires digital or e-signature, must be applied by default. This ensures that any notice, statement or order issued under the Act maintains its legal validity and enforceability. 20. On the question of whether the impugned orders under Section 73(9) conform to Section 75(4) of the State Act and is according to the principles of natural justice, the Court observed that the Summary of the Show Cause Notice did not mention any date of hearing, leaving the relevant column blank. The petitioner was merely asked to submit a reply, without being offered a cleared opportunity for personal hearing. 21. Section 75(4) of both the Central and State GST Acts mandates that an opportunity of hearing must be granted when a written request is made by the person chargeable with tax or penalty, or when any adverse decision is contemplated against such person. This provision serves as a safeguard for assessees, ensuring procedural fairness. 22. The Division Bench of the Hon'ble Chhattisgarh High Court in the case of Mahindra & Mahindra Ltd. (supra) reinforced this by holding that where a statute mandates a hearin....