2024 (11) TMI 108 - HC - GST

Issuance of SCN prior to passing the Impugned Order under Section 73 9 of the State Act or not -Compliance with the provisions of Section 73 for issuance of Show Cause Notice or not - impugned orders under Section 73 9 of the State Act is in conformity with Section 75 4 of the State Act or not - violation of princiles of natural justice - HELD THAT - Non-issuance of a proper and prior Show Cause Notice, as contemplated under sub-section 1 of Section 73 of AGST Act, 2017 and issuance of only Summary of Show Cause Notice and Attachment to Determination of Tax cannot be said to be in compliance with sub-section 1 of Section 73 and sub-rule 1 and Rule 142 of the AGST Rules, 2017, a Summary of Show Cause Notice is held to be not a substitute of a Show Cause Notice, contemplated by the provisions of sub-section 1 of Section 73 to set the proceeding in motion. From the provisions of Section 73, it emerges 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 issued by the proper officer. Compliance of the provisions contained in sub-section 1 to sub-section 8 and sub-section 10 to sub-section 11 of Section 73 and sub-rule 1 of Rule 142 are conditions precedent to term an Order passed under sub-section 9 of Section 73 as a valid one. Having regard to the fact that a proper and prior Show Cause Notice under sub-section 1 of Section 73 of the AGST Act, 2017 was not issued along with the Summary of Show Cause Notice in Form GST DRC-01 Annexure-I to the writ petition and the Attachment to Determination of Tax Annexure-II to the writ petition , and in terms of the observations made in the common Judgment and Order dated 26.09.2024 supra , the impugned Order dated 30.12.2023 Annexure-IV to the writ petition is found not sustainable in law and the same deserves to be set aside and quashed. It is accordingly ordered. The petition is disposed off.

Summary

Issues:
1. Validity of the Order dated 30.12.2023 passed under Section 73 of the Assam Goods and Services Tax Act, 2017.
2. Compliance with the provisions of Section 73 for issuance of Show Cause Notice.
3. Conformity of the impugned orders with Section 75 [4] and principles of natural justice.

Analysis:

Issue 1: Validity of the Order dated 30.12.2023
The petitioner challenged the Order dated 30.12.2023 passed under Section 73 of the Assam Goods and Services Tax Act, 2017, on the grounds of improper Show Cause Notice. The petitioner contended that the Summary of Show Cause Notice in Form GST DRC-01 was not in conformity with Section 73 read with Rule 142 [1] [a] of the Act. The Court found that the Summary of Show Cause Notice cannot substitute the actual Show Cause Notice required under Section 73 [1] to initiate proceedings. The Court set aside and quashed the impugned orders due to non-compliance with the legal requirements.

Issue 2: Compliance with the provisions of Section 73 for issuance of Show Cause Notice
The Court emphasized that a proper Show Cause Notice under Section 73 [1] is a prerequisite for initiating proceedings. The Court highlighted that the Statement of determination of tax attached to the Summary of Show Cause Notice cannot replace the Show Cause Notice as mandated by the law. It was ruled that compliance with the provisions of Section 73, including issuance of proper notices by the Proper Officer, is essential for a valid order under Section 73 [9].

Issue 3: Conformity with Section 75 [4] and principles of natural justice
The Court found that the impugned orders were in violation of Section 75 [4] as no opportunity of hearing was granted. It was concluded that the impugned orders lacked compliance with the principles of natural justice. Consequently, the Court set aside and quashed the impugned orders and granted liberty to the respondent authorities to initiate fresh proceedings under Section 73, ensuring adherence to legal requirements and principles of natural justice.

In conclusion, the Court held that the impugned Order dated 30.12.2023 was not sustainable due to the absence of a proper Show Cause Notice. The judgment emphasized the importance of procedural compliance and adherence to legal provisions for the validity of orders under the Assam Goods and Services Tax Act, 2017.