Gauhati High Court
Page No.# 1/17 vs The State Of Assam And Ors on 27 March, 2026
Page No.# 1/17
GAHC010054222026
2026:GAU-AS:4451
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/1541/2026
SRI AMZAD ALI
S/O- SAKMAN MUNSHI.
R/O- SREEGRAM PT-VI, DHUBRI, P.O.- HATIPOTA. P.S.- CHAPAR, DIST.-
DHUBRI, ASSAM - 783348
VERSUS
THE STATE OF ASSAM AND ORS
REPRESENTED BY THE COMMISSIONER AND SECRETARY TO
GOVERNMENT OF ASSAM, DEPARTMENT OF FINANCE AND TAXATION,
DISPUR, ASSAM.
2:THE PRINCIPAL COMMISSIONER
STATE TAX
KAR BHAWAN
G.S. ROAD
DISPUR
GUWAHATI-781006.
3:THE ASSISTANT COMMISSIONER OF STATE TAX
DHUBRI ZONE
ASSAM
Advocate for the Petitioner : MR. R S MISHRA, MS. M DEY,MS B SARMA
Advocate for the Respondent : SC, FINANCE AND TAXATION,
Page No.# 2/17
BEFORE
HON'BLE MR. JUSTICE N. UNNI KRISHNAN NAIR
ORDER
27/03/2026 Heard Mr. R.S. Mishra, learned counsel for the petitioner. Also heard Mr. B. Gogoi, learned standing counsel, Finance & Taxation, Govt. of Assam.
2. The petitioner in the present proceeding, hence, presented a challenge to the form GST DRC-01 dated 14.07.2025 as well as the order dated 21.08.2025 issued by the respondent No. 3, i.e. the Asstt. Commissioner of State Taxes, Dhubri Zone, Dhubri.
3. The brief facts, requisite for adjudication of the issue arising in the present proceeding, is noticed as under.
4. The petitioner, who is engaged in the business of manufacturing and sale of bricks, is a registered assesee under the provisions of Central Goods & Service Tax Act, 2017 and the Assam Goods and Services Tax Act, 2017. The petitioner has a GST registration, bearing No. 18AQTPA0284H1ZQ. The respondent No. 3, herein, i.e. the Asstt. Commissioner of State Taxes, had issued a summary of show-cause notice in Form DRC-01 dated 14.07.2025 under Rule 142 of the CGST Rules which was uploaded in the GST portal. It is the contention of the petitioner that no show-cause notice was uploaded along with the summary of the said show-cause notice. The summary is in respect of the financial years, 2019-2020 to 2024-2025. Along with the Form DRC-01, an attachment to determination of tax was also uploaded. The petitioner was to submit his reply. The petitioner further contented that without affording an opportunity of hearing, the respondent No. 3, pursuant to issuance of Form Page No.# 3/17 DRC-01 dated 14.07.2025, passed the impugned order dated 21.08.2025, demanding GST under Section 74 of CGST/AGST Act to the tune of Rs. 53,27,226/- (Rupees Fifty Three Lakhs Twenty Seven Thousand and Two Hundred Twenty Six) along with interest and penalty. Along with the said order dated 21.08.2025, a summary of the orders for each of the Financial years applicable, was also uploaded in Form DRC-07.
5. The petitioner states that under Section 74 of the CGST/AGST Act, 2017, a notice is mandated to be issued to the person chargeable with tax who had not paid or which had been so short paid or the refund has been erroneously made or who has wrongly been availed or unutilized input tax credit requiring him to show-cause as to why he should not pay the amount specified in the notice along with interest payable under Section 50 and a penalty levyable under the Act of rules made there-under. It is contended by the petitioner that Sub-Section (9) of Section 74 provides that the proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and a penalty due from such person and issue an order. The petitioner further contends that Rule 142 of the CGST Rules, 2017, deals with issuance of notice and order for demand of amounts payable under the Act. It mandates that proper officer shall serve, along with the notice issued under Section 52 or Section 73 or Section 74 or Section 76 or Section 122 or Section 123 or Section 124 or Section 125 or Section 127 or Section 129 or Section 130, a summary, thereof, electronically in Form GST DRC-01 and therein, specify the amount of tax, interest and penalty payable by the person chargeable with tax. The petitioner contends that a perusal of the relevant provisions of the CGST Act, makes it clear that the proper officer shall issue show-cause notice first and thereafter the summary, thereof, would be uploaded Page No.# 4/17 in Form DRC-01. It is the categorical contention of the petitioner, herein, that no show-cause notice had preceded uploading of the Form DRC-01.
6. It is further contended by the petitioner that the provision of Rule 26(3) of CGST Rules, 2017, provides that all notices, certificates and orders shall be issued electronically by the proper officer or any other officer, who is authorized to issue such notices or certificates or orders, through digital signature certificate or through e-signature (as prescribed under the provisions of Information and Technology Act, 2000). It is highlighted by the petitioner that the summary of the order as uploaded in Form GST DRC-07, all dated 28.08.2025, did not contain the signature as required under Rule 26(3) of the CGST Rules.
7. In the above premises, the petitioner has instituted the present proceeding assailing the Form GST DRC-01 dated 14.07.2025, as well as the order dated 21.08.2025 issued by the respondent No. 3.
8. Mr. R.S. Mishra, learned counsel for the petitioner, by reiterating the contentions, hereinabove, has submitted that the Form GST DRC-01 dated 14.07.2025, having been so issued in clear violation of the provision of Section 74 of the CGST Act, 2017, the same would mandate interference by this Court. He has submitted that the summary of the show-cause notice, as uploaded in the portal, not being preceded by issuance of a show cause notice, the respondent authorities could not have taken action in the matter and proceed to issue the order dated 21.08.2025, basing on a summary of the show-cause notice as uploaded vide the Form GST DRC-01 dated 14.07.2025. In support of his submission Mr. Mishra, has relied upon a decision of a Coordinate Bench of this Court, rendered in the case of Const ruction Catalysers Pvt. Ltd. Vs. Page No.# 5/17 State of Assam & Ors. judgment and order dated 26-09-2024 in W.P.(C) No. 3912/2024.
9. Per contra, Mr. B. Gogoi, learned Standing Counsel, Finance & Taxation Department, Assam submitted that the respondent authority had issued the summary of the show-cause notice in Form DRC-01, which was also accompanied by the determination of the tax, which as per the respondents would have provided all the details so requisite for the petitioner to submit his reply in the matter. The learned counsel has, however, fairly submitted that there is no separate show-cause notice, apart from the determination of the tax as attached to the summary of the show-cause notice uploaded in the portal. Mr. Gogoi, has submitted that no digital signature of the proper officer is found to have been appended in the orders dated 21.08.2025. However, he has submitted that when the summary of show-cause notice as well as summary of the order uploaded in the GST DRC-01 and GST DRC-07, the same are duly authenticated in the portal with digital signatures and without such authentication the portal cannot be operated.
10. I have heard the learned counsel for the parties and perused the materials available on record.
11. The issues arising in the present proceeding were also the issues arising for consideration, in the proceeding of W.P.(C) No. 3912/2024, Construction Catalysers Pvt. Ltd. (Supra). The Co-ordinate Bench of this Court, basing on the submission of the parties, had for the purpose of analyzing the issues so arising framed the following questions;
(i) Whether Show Cause Notices were issued prior to passing the Page No.# 6/17 Impugned Order under Section 73 (9) of the State Act?
(ii) Whether the determination of tax as well as the Order attached to the Summary of the Show Cause Notice in GST DCR-01 and Summary of the Order in GST DCR-07 can be said to be the Show Cause Notice and Order respectively?
(iii) Whether the impugned orders under Section 73 (9) of the State Act is in conformity with Section 75(4) of the State Act and is in consonance with the principles of natural justice?
12. Thereafter, the learned Co-ordinate Bench of this Court, had drawn the following conclusions:
(i) Whether Show Cause Notices were issued prior to passing the Impugned Order under Section 73 (9) of the State Act.
15. From the perusal of the records, it would show that in the Summary of the Show Cause Notices issued in GST DRC-01 to the petitioners in the batch of writ petitions, there is a mention therein that there is a Show Cause Notice attached. It is the case of the respondents that the said attachment wherein determination of tax is mentioned is the Show Cause Notice. The question therefore arises as to whether the said attachment can be said to be a Show Cause Notice as per the mandate of both the Central Act as well as the State Act and the Rules made therein under. It would be apposite to take note of that in all these cases, the Summary of the Show Cause Notices have been issued in terms with Section 73.
16. At this stage, this Court would briefly take note of Section 73. A Page No.# 7/17 perusal of Section 73 would show that the said provision is set into motion when it appears to the Proper Officer that:-
(a) Any tax has not been paid; or
(b) Any tax short paid; or
(c) Any tax erroneously refunded; or
(d) Where input tax credit had been wrongly availed or utilized.
for any reason other than the reason of fraud or any willful misstatement or suppression of facts to evade tax.
Taking into account that it is only in the circumstances referred to above, the Proper Officer is required to issue a Show Cause Notice, therefore, the Show Cause Notice is required to specifically mention the reason(s) and the circumstances why the provision of Section 73 had been set into motion. The person against whom the said Show Cause Notice is issued would only have an adequate opportunity to submit a representation justifying that the prerequisites for issuance of Show Cause Notice is not there if and only if the reason(s) for issuance of the Show Cause is specifically mentioned in the Show Cause Notice.
Section 73 further stipulates that upon consideration of the representations, if any, the Proper Officer shall pass the order under Section 73 (9) determining the amount of tax, interest and penalty.
It is also apposite to mention that Section 73 (2) and Section 73 (10) are interconnected in as much as Section 73 (10) stipulates that within three Page No.# 8/17 years from the due date for furnishing the annual return for the financial year, the order under Section 73 (9) can be passed. In terms with Section 73 (2), the Show Cause Notice is to be issued within three months prior to the time limit prescribed in Section 73 (10).
In addition to the above, it would also show from conjoint reading of Sub- section (1) (2) (3) and (4) of Section 73 that the legislature had categorically distinguished the Show Cause Notice from the Statement which is required to be issued by the Proper Officer or in other words, irrespective of Statement to be issued in terms with Sub-section (3) of Section 73, there is a requirement of issuance of a Show Cause Notice by the Proper Officer.
17. At this stage, it is also pertinent to mention that in Section 73, there is no mention of issuance of a Summary of Show Cause Notice. The requirement of issuance of a Summary of the Show Cause Notice is seen in Rule 142 of the Rules of 2017. Rule 142 (1) (a) and (b) is relevant for which the same is quoted herein below:-
"142. Notice and order for demand of amounts payable under the Act.-(1) The proper officer shall serve, along with the
(a) notice issued under section 52 or section 73 or section 74 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC01,
(b) statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02, Page No.# 9/17 specifying therein the details of the amount payable."
From a perusal of the above quoted Rule, it would show that in addition to the Show Cause Notice to be issued under Section 73 (1) and the Statement of determination of tax under Section 73 (3), there is an additional requirement of issuance of a Summary of the Show Cause Notice in GST DRC-01 and the Summary of the Statement in GST DRC-02. The natural corollary from the above analysis is that the issuance of the Show Cause Notice and the Statement of determination of tax by the Proper Officer are mandatory requirement in addition to the Summary of Show Cause Notice in GST DRC-01 and Summary of the Statement in GST DRC-02.
18. The judgment of the learned Division Bench of the Jharkhand High Court in the case of Nkas Services Private Limited (supra) had also dealt with a similar issue and categorically held that a Summary of a Show Cause Notice issued under GST DRC-01 cannot substitute the requirement of a proper Show Cause Notice. Similarly, in the case of LC Infra Projects Pvt. Limited (supra), the learned Single Judge of the Karnataka High Court had also observed that the issuance of a Show Cause Notice is sine qua non to proceed with the recovery of interest payable thereon under Section 50 of the Act and penalty leviable under the provisions of the Act or the Rules.
19. From the above analysis, this Court is of the view that the Summary of the Show Cause Notice along with the attachment containing the determination of tax cannot be said to be a valid initiation of proceedings under Section 73 without issuance of a proper Show Cause Notice. The Page No.# 10/17 Summary of the Show Cause Notice is in addition to the issuance of a proper Show Cause Notice. Under such circumstances, this Court is of the unhesitant opinion that the impugned orders challenged in the instant batch of writ petitions are contrary to the provisions of Section 73 as well as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed with issuance of a proper Show Cause Notice.
(ii) Whether the determination of tax as well as the order attached to the Summary to the Show Cause Notice in GST DRC-01 and the Summary of the Order in GST DRC-07 can be said to be the Show Case Notice and Order respectively.
20. While deciding supra, this Court duly dealt with what would constitute a Show Cause Notice, the Statement as per Section 73 (3) as well as the Summary to the Show Cause Notice in GST DRC-01 and Summary of the Statement in GST DRC-02. This Court had also opined above that the statement to be provided by the Proper Officer in terms with Section 73 (3) cannot be said to be a Show Cause Notice which is required to be issued in terms with Section 73 (1). Therefore, the submission of the respondents that the statement attached to the Summary of the Show Cause Notice is the Show Cause Notice is completely misconceived and contrary to Section 73 (1) and 73 (3). Be that as it may, a very pertinent contention had been made by the learned counsel appearing on behalf of the petitioners to the effect that the attachments to both the Summary of the Show Cause Notice and Summary of the Order have no value as the same contains no authentication of the Proper Officer. In that regard, the learned counsels referred to Rule 26 (3) of the Rules and the judgment in Page No.# 11/17 the cases of M/s Silver Oak Villas LLP (supra) and A.V. Bhanoji Row (supra).
21. Rule 26 (3) of the Rules of 2017 categorically stipulates as to how notices, certificates and orders are to be authenticated. The said Sub-Rule is reproduced herein under:-
"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 authorised 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 behalf.]"
A perusal of the above quoted Sub-Rule would show that notices, certificates and orders under the provisions of Chapter III 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 or verified by any other mode of signature or verification as notified by the Board in that behalf. It is relevant to take note of that Chapter III of the Rules of 2017 pertains to Registration whereas in respect to Demand and Recovery, it is Chapter XVIII.
22. Now therefore a question arises as to whether Rule 26 (3) can be applicable to Chapter-XVIII when the said Sub-Rule on refers to Page No.# 12/17 ChapterIII. In the case of M/s Silver Oak Villas LLP (supra), the learned Division Bench of the Telangana High Court had applied Rule 26 (3) of the Rules of 2017 even to Chapter-XVIII of the Rules of 2017. In the case of A.V. Bhanoji Row (supra), the learned Division Bench of the Andhra Pradesh High Court held that the signatures cannot be dispensed with and Sections 160 and 169 cannot save an order, notice, communication which did not contain a signature. In another judgment of the learned Division Bench of Delhi High Court in the case of Railsyls Engineers Private Limited vs. Additional Commissioner of Central goods and Services Tax (Appeals-
11) and Anr., reported in (2023) 112 GSTR 143, the Delhi High Court held that there was a requirement of at least putting the digital signatures on the Show Cause Notice and Order in Original.
23. A perusal of the provisions of Section 73 would show that the Show Cause Notice is required to be issued by the Proper Officer, the Statement under Section 73 (3) is to be issued by the Proper Officer as well as the Order under Section 73 (9) is required to be passed by the Proper Officer. Section 2 (91) of the Act defines who is the Proper Officer meaning thereby either the Commissioner or the Officer who had been specifically entrusted by the Commissioner. As it is the statutory mandate that it is only the Proper Officer who has the authority to issue Show Cause Notice and the Statement and pass the order, the authentication in the Show Cause Notice, Statement as well as the Order by the Proper Officer is a must and failure to do so, makes the Show Cause Notice, Statement and Order ineffective and redundant.
24. It is also important to note that the Act only stipulates that notice Page No.# 13/17 would be issued and order would be passed by the Proper Officer. The manner in which the Proper Officer would authenticate the notice(s) or the order(s) in so far as other Chapters of the Rules of 2017 is silent except Chapter-III. Taking into account the utmost necessity of the authentication by the Proper Officer, this Court is of the opinion unless appropriate insertion are made in the Rules or notification are issued as per the directions of the Board to fill the void in the Rules of 2017, the authentication in the manner stipulated in Rule 26 (3) of the Rules of 2017 has to be applied as and when the Proper Officer is required to issue notice or Statement and pass Order in terms with the Act.
(iii) Whether the impugned orders under Section 73 (9) of the State Act is in conformity with Section 75 (4) of the State Act and is in consonance with the principles of natural justice.
25. This Court has duly perused the Summary of the Show Cause Notices wherein the petitioners were only asked to file their reply on a date specified. There was no mention as to the date of hearing and the Column was kept blank. In two writ petitions, i.e. WP(C) No.3912/2024 and WP(C) No.3933/2024, the petitioners had sought for an opportunity of hearing which was however not given. In this regard, if this Court takes note of Section 75 (4) of both the Central Act as well as State Act, it would be seen that it is the mandate of the said provision that an opportunity of hearing should be granted when a request is received in writing from the person chargeable with tax or penalty or when any adverse decision is contemplated against such person. The mandate of Section 75 (4) of both the Central and State Act are safeguards provided to the assessees so that Page No.# 14/17 they can have a say in the hearing process.
26. It is also seen that in the reply to be submitted in Form GST DRC06, there is an option given for personal hearing at Sl. No.7. As stated above, the petitioners in WP(C) No.3912/2024 and WP(C) No.3933/2024 have specifically filled up the Column as "Yes" wherein the option for personal hearing was mentioned. Inspite of that, there was no opportunity of hearing afforded to those petitioners.
27. The learned Division Bench of the Chhattisgarh High Court in the case of Mahindra & Mahindra Limited (supra) had categorically observed that when the statute contains a mandate of hearing, the same has to be granted, else it would render the provision porous.
28. This Court is of the opinion that when the statute is clear to provide an opportunity of hearing, there is a requirement of providing such opportunity. In fact a perusal of the Form GST DRC-01 enclosed to the writ petitions shows details have been given as regards the date by which the reply has to be submitted; date of personal hearing; time of personal hearing and venue of personal hearing. It is seen that in the Summary of the Show Cause Notice only the date for submission of reply has been mentioned. In respect to other details as stated above have been mentioned to as 'NA'. It may be that the Proper Officer assumed that based on the reply he/she may proceed with the adjudication depending as to whether the person to whom the notice is issued had opted for personal hearing or not. But in a case where no reply is filed, a question arises whether the Proper Officer can pass an adverse order without providing an opportunity for hearing. The answer has to be in the Page No.# 15/17 negative else it would render the second part of Section 75 (4) redundant.
13. Basing on the said reasoning arrived at on analysis of the issues in the said proceeding, the Co-ordinate Bench of this Court, had drawn the following conclusions:
29. On the basis of the above analysis and determination, this Court disposes of the instant batch of writ petitions with the following observations and directions:-
(A) The Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act as well as the State Act. Irrespective of issuance of the Summary of the Show Cause Notice, the Proper Officer has to issue a Show Cause Notice to put the provision of Section 73 into motion.
(B) The Show Cause Notice to be issued in terms with Section 73 (1) of the Central Act or State Act cannot be confused with the Statement of the determination of tax to be issued in terms with Section 73 (3) of the Central Act or the State Act. In the instant writ petitions, the attachment to the Summary of Show Cause Notice in GST DRC-01 is only the Statement of the determination of tax in terms with Section 73 (3). The said Statement of determination of tax cannot substitute the requirement for issuance of the Show Cause Notice by the Proper Officer in terms with Section 73 (1) of the Central or the State Act. Under such circumstances, initiation of the proceedings under Section 73 against the petitioners in the instant batch of writ petitions without the Show Cause Notice is bad in law and interfered with.
Page No.# 16/17 (C) It is also noticed that the Show Cause Notice and the Statement in terms with Section 73 (1) and 73 (3) of both the Central Act or the State Act respectively are required to be issued only by the Proper Officer as defined in Section 2 (91). Additionally, the order under Section 73 (9) is also required to be passed by the Proper officer. The Summary of the Show Cause Notice, the Summary of the Statement under Section 73 (3) and the Summary of the Order passed in terms with Section 73 (9) are to be issued in GST DRC-01, GST DCR-02 and GST DRC-07 respectively. The issuance of the Summary of the Show Cause Notice, Summary of the Statement and Summary of the Order do not dispense with the requirement of issuance of a proper Show Cause Notice and Statement as well as passing of the Order as per the mandate of Section 73 by the Proper Officer. As initiation of a proceedings under Section 73 and passing of an order under the same provision have consequences. The Show Cause Notice, Statement as well as the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Rules of 2017.
(D) The Impugned Orders challenged in the writ petitions are in violation of Section 75 (4) as no opportunity of hearing was given as already discussed herein above.
14. On perusal of the conclusions drawn by the coordinate Bench of this Court in the case of Construction Catalysers Pvt. Ltd. (Supra), this Court is in respectful agreement with the same and also holds that the reasonings so advanced, therein, would also apply to the issues arising in the present proceeding. Accordingly, the summary of the show-cause notice in From GST Page No.# 17/17 DRC-01 and the orders dated 21.08.2025 (Annexure-D Colly) stand set aside and quashed.
15. In view of the above position, this Court holds that it cannot be unmindful of the fact that it is only on account of certain technicalities and the manner in which the impugned orders were passed, that this Court has interfered with the impugned orders. It is also relevant to take note of that the respondent authorities were under the impression that the determination of tax, which was attached to the summary of the show cause notice, would constitute a valid show cause notice. Under such circumstances, in the interest of justice, this Court while setting aside the impugned orders, grants liberty to the respondent authorities to initiate de novo proceedings under Section 74, if deemed fit, for the relevant financial year in question. This Court further observes and directs that the period from the date of issuance the summary of the show cause notices, under challenge in the present proceedings, upon the petitioners, till the date a certified copy of the instant order is served upon the proper officer, be excluded while computing the period prescribed for passing of the order under Section 74 (10) of the Central Act as well as the State Act as the case may be.
16. With the above observations and directions, the writ petition stands disposed of.
JUDGE Comparing Assistant