Page No.# 1/13 vs The Union Of India And Ors on 5 September, 2025

Outcome
The High Court allowed the writ petition, setting aside the impugned order dated 16.04.2024. The Court granted liberty to the respondent authorities to initiate de novo proceedings under Section 73 of the Act, if deemed appropriate, and directed that the period between the issuance of the Summary of the Show Cause Notice and the date of service of the judgment be excluded from the computation of the limitation period under Section 73(10) of the Act.

2. Core Issue
The core issues for determination were:
* Whether proper Show Cause Notices (SCN) were issued prior to passing the impugned order under Section 73(9) of the State Act.
* Whether the determination of tax and the order attached to the Summary of the Show Cause Notice (GST DRC-01) and Summary of the Order (GST DRC-07) could be considered valid Show Cause Notices and Orders, respectively.
* Whether the impugned orders under Section 73(9) of the State Act conformed to Section 75(4) of the State Act and the principles of natural justice.

3. Key Facts
* The petitioner received a Summary of Show Cause Notice dated 16.12.2023 in GST DRC-01 for the tax period April 2018 - March 2019, along with an attachment regarding tax determination.
* The petitioner contended that no proper Show Cause Notice was attached to the summary on the portal, leading them not to submit a reply.
* Subsequently, an order dated 16.04.2024 was passed in GST DRC-07, stating the assessee failed to make payment within 30 days of the notice.
* The petitioner alleged that the attachments to both GST DRC-01 and GST DRC-07 were not authenticated by any signature of the Proper Officer.
* The Court had previously enquired if proper SCNs were issued, to which the respondents provided no positive response.

4. Arguments
Taxpayer (Suhel Ahmed and Anr.):
* A proper Show Cause Notice (SCN) under Section 73 was not issued; the attachment to the DRC-01 summary merely detailed tax determination and did not constitute a proper SCN requiring the petitioner to "show cause."
* The attachments to GST DRC-01 and GST DRC-07 lacked the signature of the Proper Officer, violating the mandatory authentication requirement under Rule 26 of the CGST Rules, 2017 (digital or e-signature).
* The impugned order was passed without granting a mandatory opportunity of hearing, violating Section 75(4) of the Central/State GST Acts. The DRC-01 summary explicitly left the column for the hearing date blank.
* Section 75(4) mandates a hearing when an adverse decision is contemplated, irrespective of whether the taxpayer specifically requests it.

Revenue (The Union of India and Ors.):
* The Summary of the Show Cause Notice in Form DRC-01, along with the attached tax determination, provided all necessary details for the petitioner to submit a reply, implicitly serving as the SCN.
* Conceded that there was no separate physical SCN apart from the tax determination enclosed with the summary.
* Conceded that the attachments to GST DRC-01 and GST DRC-07 did not bear physical signatures, though they contained the text "Sd- Proper Officer."
* Argued that when the Summaries in GST DRC-01 and GST DRC-07 are uploaded on the portal, they are duly authenticated with digital signatures, as the portal cannot be operated otherwise.

5. Court’s Reasoning
* On SCN Validity (Issues i & ii): The Court held that Section 73 mandates the issuance of a proper SCN clearly stating reasons for non-payment, short-payment, etc. Rule 142 of the CGST Rules, 2017, explicitly states that a summary (DRC-01/02) is to be served along with the actual SCN under Section 73(1) or statement under Section 73(3). This implies that the SCN and statement are primary documents, and the summaries are merely supplementary. Therefore, merely attaching a tax determination order to a summary in DRC-01 does not amount to a valid SCN.
* On Authentication (Issue ii): The Court found that the attachments to both DRC-01 and DRC-07 lacked proper authentication by the Proper Officer, violating Rule 26(3) of the CGST Rules, 2017. While Rule 26 falls under Chapter III (Registration), the Court, relying on precedents, extended its applicability to Chapter XVIII (Demand and Recovery) due to a regulatory gap and the critical importance of authentication for legal validity. It emphasized that an unsigned document lacks legal efficacy and cannot be cured by procedural lapse provisions (Sections 160, 169). The SCN, statement, and final order must be issued by the "Proper Officer" (as per Section 2(91)) and duly authenticated by digital or e-signature.
* On Opportunity of Hearing (Issue iii): The Court observed that the DRC-01 summary did not mention a hearing date, only a reply submission date. Section 75(4) of the Act mandates an opportunity of hearing in two scenarios: (i) a written request from the assessee, or (ii) when an adverse decision is contemplated. The use of "or" makes the hearing mandatory even if no request is made, provided an adverse decision is envisioned. Relying on precedents, the Court held that failure to provide such a hearing, especially when an adverse order is contemplated, violates both the statutory mandate of Section 75(4) and the principles of natural justice.

6. Statutory References
* Central Goods and Services Tax Act, 2017 (CGST Act):
* Section 2(91) (Definition of Proper Officer)
* Section 73 (Sub-sections 1, 2, 3, 4, 9, 10 - relating to determination of tax not paid, short paid, etc.)
* Section 75(4) (General provisions relating to determination of tax and personal hearing)
* Section 160 (Rectification of mistakes apparent from record)
* Section 169 (Service of Notice)
* Central Goods and Services Tax Rules, 2017 (CGST Rules):
* Rule 26(3) (Authentication of notices, certificates, and orders)
* Rule 142(1)(a), 142(1)(b) (Notice and order for demand of amounts payable under the Act)
* Form GST DRC-01 (Summary of Show Cause Notice)
* Form GST DRC-02 (Summary of Statement)
* Form GST DRC-07 (Summary of Order)
* Information Technology Act, 2000
* Telangana Goods and Services Tax Act, 2017 (TGST Act)
* Assam Goods and Services Tax Act, 2017 (Assam SGST Act)

7. Precedents Cited
* M/s Silver Oak Villas LLP vs. the Assistant Commissioner ST {WP(C) No.6671/2024} (Telangana High Court)
* A.V. Bhanoji Row vs. Assistant Commissioner (ST) & Others, reported in (2024) 123 GSTR 432 (Andhra Pradesh High Court)
* Nkas Services Private Limited vs. State of Jharkhand & Others, reported in (2022) 99 GSTR 145 (Jharkhand High Court)
* LC Infra Projects Pvt. Limited vs. Union of India and Others, reported in (2020) 73 GSTR 248 (Karnataka High Court)
* Mahindra & Mahindra Limited vs. Union of India and Others, (WA No.172/2024) (Chhattisgarh High Court)
* Railsys Engineers Pvt. Ltd. V. Additional Commissioner of Central Goods and Services Tax (Appeals-II), reported in (2023) 112 GSTR 143