GST DRC-01 cannot be Substitute to Show Cause Notice Issued u/s 73 (1) of CGST Act: Gauhati HC

The Gauhati High Court recently ruled that a GST DRC-01 (intimation of tax ascertained as payable) cannot substitute a proper show cause notice (SCN) issued under Section 73(1) of the CGST Act. The court emphasized that a valid SCN is a fundamental requirement for initiating recovery proceedings and must provide clear details of the alleged tax liability and the grounds for demand. A DRC-01 merely intimates a proposed demand, lacking the detailed explanation and opportunity for response inherent in a formal SCN. This judgment reinforces the principles of natural justice and due process in GST administration, ensuring taxpayers receive proper notice before any adverse action is taken.