GST demand quashed as only summary notices were issued without proper show cause notice and hearing under Section 73

Case Details

• Case Title: Bitupon Doley v. State of Assam & Ors.

• Court: Gauhati High Court

• Petition No.: WP(C)/1565/2025

• Date of Judgment: 24.06.2025

• Category of Dispute: Validity of GST Demand – Natural Justice & Procedural Violation

• Relevant Sections: Section 73(1), 73(3), 73(9), 73(10), 75(4), 2(91) of CGST Act, 2017; Rule 26(3) of CGST Rules, 2017

Facts (Paras 2–3)

The petitioner, Bitupon Doley, challenged the action of the Assistant Commissioner of State Tax, Jorhat, who had issued only a summary of show cause notice (DRC-01) dated 12.12.2023 and a summary of order (DRC-07) dated 22.04.2024. No proper show cause notice under Section 73(1) or order under Section 73(9) was issued. The petitioner also contended that no opportunity of hearing was granted in violation of Section 75(4).

The State, in its affidavit, admitted that only a summary notice was issued and not the mandatory show cause notice under Section 73(1).

Questions before the Court

• Whether a summary of show cause notice under GST DRC-01 can be treated as a valid substitute for the mandatory show cause notice under Section 73(1).

• Whether passing an order without affording an opportunity of hearing violates Section 75(4).

Observations (Paras 4–5, citing Para 29 of Construction Catalysers Pvt. Ltd.)

The Court observed that the issue was identical to that decided in Construction Catalysers Pvt. Ltd. v. State of Assam (WP(C)/3912/2024, decided on 26.09.2024). In that case, the Court had held:

1. Summary notices (DRC-01) are not substitutes for proper SCNs under Section 73(1).

2. A statement of tax determination under Section 73(3) also cannot replace the statutory SCN.

3. The proper officer must issue SCN, determination statement, and order duly authenticated as per Rule 26(3).

4. Orders passed without granting hearing are in violation of Section 75(4).

5. Such defective orders are liable to be quashed, but revenue is given liberty to initiate de novo proceedings under Section 73, excluding the intervening time period for limitation purposes under Section 73(10).

Judgment (Para 6)

The Gauhati High Court set aside the summary of show cause notice dated 12.12.2023 and the summary of order dated 22.04.2024, holding them invalid. The Court disposed of the writ petition by applying the ratio of Construction Catalysers Pvt. Ltd., allowing the department liberty to initiate fresh proceedings under Section 73 in compliance with law.

Table of Cases Referred

Between Fine Lines

This judgment is a strong reminder that summary formats (DRC-01, DRC-07) are merely system-generated documents and cannot replace properly issued SCNs or orders under Section 73. For taxpayers, it reinforces the right to a fair hearing, and for the department, it clarifies that procedural compliance is not optional. Revenue authorities may issue fresh proceedings, but they must strictly adhere to statutory requirements.

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