Radiant Cash Management Services Ltd Vs Commercial Tax Officer (Madras High Court)
Summary: The Madras High Court considered a writ petition filed by Radiant Cash Management Services Ltd challenging the summary of show cause notice issued in Form GST DRC-01 dated 29.05.2025.
The petitioner submitted that the respondent had first issued a pre-show cause notice in DRC-01A dated 06.05.2025 proposing certain demands. The petitioner had sought time until 20.06.2025 to submit its reply. According to the petitioner, without granting the requested time, the respondent issued the DRC-01 summary on 29.05.2025 without attaching the detailed show cause notice. The petitioner therefore sought setting aside of the DRC-01 and liberty to reply to the DRC-01A.
The learned Government Advocate, after obtaining instructions, fairly submitted that only the summary of the show cause notice had been issued in DRC-01 dated 29.05.2025 and that no detailed show cause notice had been issued. The respondent consequently sought setting aside of the DRC-01 and a direction permitting the petitioner to reply to DRC-01A.
The Court noted that the petitioner had admittedly not filed a reply to DRC-01A dated 06.05.2025. It further observed that the respondent had issued the summary in DRC-01 without attaching the detailed show cause notice. The Court held that this showed complete non-application of mind and, in the interest of justice, set aside DRC-01 dated 29.05.2025.
The Court granted the petitioner three weeks from receipt of a copy of the order to file its reply to DRC-01A. It further directed that, after receipt of the reply or objection, the respondent should consider it, provide an opportunity of personal hearing and thereafter decide the matter on merits and in accordance with law. The writ petition was accordingly disposed of without costs.
Challenge to DRC-01 Summary
The writ petition challenged the summary of show cause notice in DRC-01 dated 29.05.2025. The challenge arose from the sequence in which the pre-show cause notice in DRC-01A dated 06.05.2025 was followed by issuance of the DRC-01 summary without the detailed show cause notice.
Petitioner’s Submissions
Learned counsel for the petitioner submitted that the respondent had issued DRC-01A on 06.05.2025 proposing certain demands. The petitioner sought time until 20.06.2025 to file its reply.
It was further submitted that the respondent did not provide the requested time and instead issued DRC-01 dated 29.05.2025. According to the petitioner, the detailed show cause notice was not attached to the DRC-01 summary. On that basis, the petitioner sought setting aside of DRC-01 and liberty to file a reply to DRC-01A.
Respondent’s Submissions
The learned Government Advocate appearing for the respondent fairly submitted, after obtaining instructions, that only the summary of the show cause notice had been issued in DRC-01 dated 29.05.2025 and that no detailed show cause notice had been issued.
The respondent consequently sought setting aside of the DRC-01 dated 29.05.2025 and a direction permitting the petitioner to file its reply to DRC-01A.
Court’s Observations and Findings
After hearing both sides and perusing the materials on record, the Court noted that the petitioner had admittedly not filed a reply to DRC-01A dated 06.05.2025.
The Court further found that the respondent had issued the summary of show cause notice in DRC-01 without attaching the detailed show cause notice. The Court observed that this showed complete non-application of mind.
Considering these facts and in the interest of justice, the Court was inclined to set aside DRC-01 dated 29.05.2025.
The distinction between the DRC-01A pre-show cause notice and the DRC-01 summary is also addressed in TaxGuru’s discussion of DRC-01A and DRC-01, which explains the respective procedural roles of the forms.
Directions of the Madras High Court
The Court issued the following directions:
1. The summary of show cause notice in DRC-01 dated 29.05.2025 was set aside.
2. The petitioner was granted liberty to file its reply to DRC-01A dated 06.05.2025 within three weeks from the date of receipt of a copy of the order.
3. Upon filing the reply or objection, the respondent was directed to consider the same, provide an opportunity of personal hearing and thereafter decide the matter on merits and in accordance with law.
With these directions, the writ petition was disposed of. There was no order as to costs, and the connected miscellaneous petition was closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed by the petitioner challenging the impugned summary of show cause notice dated 29.05.2025, issued by the respondent.
2.Learned counsel for the petitioner would submit that the respondent had issued pre-show cause notice in DRC-01A dated 06.05.2025, proposing certain demands. In response, the petitioner sought time till 20.06.2025, to file reply to the said pre-show cause notice. However, without providing such time for filing reply to DRC-01A, the respondent had issued summary of show cause notice in DRC-01 dated 29.05.2025, without attaching the detailed show cause notice. Hence, learned counsel for the petitioner prayed to set aside the summary of show cause notice in DRC-01 dated 29.05.2025 and to grant liberty to the petitioner to file reply to the pre-show cause notice in DRC-01A.
3. Learned Government Advocate after getting instructions would fairly submit that only summary of show cause notice has been issued in DRC-01 dated 29.05.2025 and no detailed show cause notice was issued to the petitioner and therefore she prayed to set aside the issuance of DRC-01 dated 29.05.2025 and to direct the petitioner to file reply to DRC-01A.
4.Heard the learned counsel for the petitioner as well as the learned Government Advocate appearing for the respondent and perused the materials available on record.
5.Considering the submissions made by the learned counsel for the petitioner and the learned Government Advocate appearing for the respondent, it is evident that, admittedly no reply was filed by the petitioner for DRC-01A dated 06.05.2025. Further, the respondent has issued the summary of show cause notice in DRC-01 without attaching the detailed show cause notice, which shows the complete non-application of mind. Taking note of the above facts and in the interest of justice, this Court is inclined to set aside DRC-01 dated 29.05.2025. Accordingly, this Court pass the following orders:-
(i) The summary of show cause notice in DRC-01 dated 29.05.2025 is hereby set aside.
(ii) The petitioner is granted liberty to file reply to DRC-01A dated 06.05.2025, within a period of three weeks from the date of receipt of a copy of this order.
(iii) On filing of such reply/objection by the petitioner, the respondent shall consider the same and provide an opportunity of personal hearing and thereafter, decide the matter on merits and in accordance with law.
6.With the above direction, this writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed.
