Issuance of Summaries alone without proper SCN, Statement of Determination of Tax, and Detailed Order is not sufficient: Gauhati HC
The Gauhati High Court has ruled that the issuance of summary show cause notices (SCN) and summary assessment orders, without accompanying detailed documents, is insufficient for tax determination under Section 73 of the Central Goods and Services Act, 2017 (“the CGST Act”). In the case of Ranjit Dutta v. The State of Assam and Ors. [W.P.(C) No. 1953 of 2025 dated April 08, 2025], the court set aside a summary SCN and a summary assessment order, emphasizing that a proper SCN under Section 73(1) and a detailed assessment order under Section 73(9) are mandatory. The Petitioner had received only summaries and was not afforded an opportunity to be heard. The High Court referenced a previous ruling, Construction Catalysers Pvt. Ltd. vs. the State of Assam and Ors., which established that a Summary SCN (FORM GST DRC-01) does not substitute the requirement for a full SCN. The court clarified that the statement of determination of tax under Section 73(3) also cannot replace the SCN. It highlighted that the initiation of proceedings and the passing of orders under Section 73 have legal consequences, necessitating proper, authenticated documents as per Rule 26(3) of the CGST Rules. This decision underscores the importance of procedural compliance in GST enforcement, reinforcing that summary forms are not standalone substitutes for detailed statutory notices and orders.
Facts:
Ranjit Dutta (“the Petitioner”) was served with a Summary of the Show Cause Notice (“Summary SCN”) without a proper Show Cause Notice (“SCN”) under Section 73(1) of the CGST Act and the Summary of the Assessment Order (“Summary Order”) without any detailed Assessment Order (“Order”) under Section 73(9) of the CGST Act by the Assistant Commissioner of State Tax (“the Respondent”). The Petitioner also contended that they sought an opportunity of being heard, however the Summary Order was passed without giving such an opportunity.
Hence, aggrieved by the Summary SCN and Summary Order issued by the Respondents without an opportunity of being heard, the present Writ Petition was filed by the Petitioner.
Issue:
Whether issuance of Summaries alone without proper SCN, Statement of Determination of Tax and Detailed Order is sufficient?
Held:
The Hon’ble Gauhati High Court in the W.P.(C) No. 1953 of 2025 held as under:
- Relied that, in the case of Construction Catalysers Pvt. Ltd. vs. the State of Assam and Ors. [W.P.(C) No. 3912 & ors. of 2024 dated September 26, 2024] wherein it was held that Summary SCN in FORM GST DRC-01 is not a substitute to the SCN to be issued in terms with Section 73(1) of the CGST Act/ State Goods and Services Act, 2017 (“the SGST Act”). It was held that irrespective of the issuance of the Summary SCN, the Assessing Officer has to issue an SCN to put the provision of Section 73 of the CGST/ SGST Act into motion.
- Noted that, the SCN to be issued in terms with Section 73(1) of the CGST/ SGST Act cannot be confused with the Statement of the determination of tax (“the Statement”) to be issued in terms with Section 73(3) of the CGST/ SGST Act. The Statement of determination of tax cannot substitute the requirement for issuance of the SCN in terms with Section 73(1) of the CGST/ SGST Act. Hence, initiation of the proceedings under Section 73 of the CGST/ SGST Act without the SCN is bad in law.
- Emphasized that, the SCN issued under Section 73(1) of the CGST/ SGST Act and Statement of the determination of tax issued under Section 73(3) of the CGST/ SGST Act are required to be issued as defined in Section 2(91) of the CGST/ SGST Act only. Additionally, the Order under Section 73 (9) of the CGST/ SGST Act is also required to be passed by the Assessing Officer.
- Held that, the Summary SCN, the Summary of Statement of the determination of tax (“the Summary Statement”) under Section 73(3) of the CGST/ SGST Act and Summary Order under Section 73(9) of the CGST/ SGST Act are to be issued in FORMS GST DRC-01, GST DCR-02 and GST DRC-07 respectively and that the Summary SCN, the Summary Statement and Summary Order do not dispense with the requirement of issuance of a proper SCN and Statement as well as Page passing of the Order as per the mandate of Section 73 of the CGST/ SGST Act as initiation of a proceedings and passing of an Order under Section 73 of the CGST/ SGST Act have consequences. The SCN, the Statement, and the Order are all required to be authenticated in the manner stipulated in Rule 26 (3) of the Central Goods and Services Rules, 2017 (“the CGST Rules”).
Our Comments:
Section 73 of the CGST/ SGST Act governs “Determination of tax, pertaining to the period up to Financial Year 2023-24, not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful-misstatement or suppression of facts”. Sub-section (1) of Section 73 of the CGST/ SGST Act provides for issuance of notice to show cause to the Assessee as to why the tax amount specified along with interest payable and penalty leviable is not payable. Further, Section 73(3) of the CGST/ SGST Act provides that a statement containing the details of tax amount demanded may be served on the Assessee for such periods other than those covered under Section 73(1) of the CGST/ SGST Act. Lastly, Section 73 (9) of the CGST/ SGST Act provides for issuance of an order determining the amount of tax, interest, and a penalty based on the representations made by the Assessee.
In the pari materia case of M/s. NKAS Services Private Limited vs. The State of Jharkhand and Ors. 2022 (58) G.S.T.L. 257 (Jhar.), the Hon’ble Jharkhand High Court noted that a summary of Show Cause Notice issued in the FORM GST DRC-01 could not substitute the requirement of a proper Show Cause Notice under Section 73 of the Jharkhand Goods and Services Act, 2017.
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