Facts of the Case:

In this case, the petitioner was issued a Summary of Show Cause Notice in Form GST DRC-01 for the tax period July 2017 to March 2018 alleging tax liability under Section 73 of the CGST/SGST Act. The summary was accompanied by an attachment described as “determination of tax,” which the department treated as the show cause notice. The petitioner contended that no proper show cause notice (SCN) was ever issued and therefore no reply was submitted. Subsequently, an order was passed in Form GST DRC-07 on the ground that payment was not made within 30 days. The petitioner challenged the proceedings on multiple grounds that the attachment was not a valid SCN, both the attachment and order were unsigned and unauthenticated, and no opportunity of personal hearing was granted. The department admitted that no separate SCN was issued apart from the attachment and that the documents did not bear signatures, though they argued that portal authentication was sufficient.

Issue:

Whether a valid Show Cause Notice under Section 73(1) was issued prior to passing the order? Whether a valid Show Cause Notice under Section 73(1) was issued prior to passing the order? Whether absence of authentication invalidates such documents. 

Held that:

The Court held that a Summary of Show Cause Notice in Form GST DRC-01 is only supplementary and cannot replace the mandatory issuance of a proper SCN under Section 73(1). A tax determination statement attached to the summary does not satisfy statutory requirements, as the law clearly distinguishes between a show cause notice and a statement of determination. Therefore, proceedings initiated without a valid SCN are legally unsustainable and contrary to Section 73 read with Rule 142(1)(a).

On authentication, the Court ruled that statutory notices and orders must be issued and authenticated by the Proper Officer. In the absence of specific authentication rules under the Demand and Recovery chapter, Rule 26(3) applies by default, requiring digital signature/e-signature. Unsigned documents lack legal sanctity and are unenforceable. Portal uploading alone does not cure this defect.

On natural justice, the Court held that personal hearing is mandatory under Section 75(4) whenever an adverse decision is contemplated, irrespective of whether the assessee requests it. Leaving the hearing column blank and proceeding to pass an adverse order renders the statutory safeguard meaningless and violates principles of natural justice.

Accordingly, the impugned order was set aside. 

Case Name: Garg Associates Versus The State of Assam, The Principal Commissioner State Tax Guwahati, The Deputy Commissioner of State Tax Guwahati, The Assistant Commissioner of State Tax Guwahati. dated 13.03.2026

To read the complete judgement 2026 Taxo.online 615