Gauhati High Court: DRC-01 Summary Alone Is Not a Valid SCN
This landmark decision reinforces taxpayers’ right to fair hearing and procedural compliance under the GST Act.
Let’s break down this ruling and what it means for taxpayers, consultants, and GST officers.
What is Form GST DRC-01?
- DRC-01 is a summary issued under Rule 142(1)(a) of the CGST Rules.
- It contains a summary of tax liability, interest, and penalty proposed to be levied.
Key Legal Issue: Can Summary Replace SCN?
No. As per the Gauhati HC in Kalpana Store v. Union of India, a DRC-01 summary cannot substitute the actual show cause notice.
Court’s Observations
- Natural justice violated: No opportunity to reply or contest the demand.
- DRC-01 is only a summary, not the main notice.
- Failure to serve SCN under Section 74(1) makes the order illegal.
- Department’s claim that the taxpayer “had knowledge” of proceedings is irrelevant without proper service of SCN.
Why This Ruling Matters
- Taxpayers must receive full-text SCNs, not just summaries.
- GST demands raised only through DRC-01 are invalid in law.
- Sets precedent for quashing orders passed without due process.
Legal References
| Provision | Description |
|---|---|
| Section 74(1) | Mandates SCN for tax evasion involving fraud/wilful misstatement |
| Rule 142(1)(a) | Requires summary in DRC-01 after SCN is issued |
| Kalpana Store v. UOI [2024] | Gauhati HC: DRC-01 summary without SCN is illegal |
Expert Insight
“Too many taxpayers blindly accept DRC-01 as a final demand.
— GST Consultant, Efiletax Panel
How to Respond to a DRC-01 Summary
- Check for SCN: Confirm if you received a proper SCN with full reasoning.
- Raise objection: If SCN not received, file a reply and seek personal hearing.
Frequently Asked Questions (FAQs)
Q1: Can I ignore DRC-01 if no SCN is received?
Ans: You must file an objection stating no SCN was served. Ignoring may lead to ex parte order.
Q2: Is DRC-01 mandatory after SCN?
Ans: Yes. DRC-01 is a summary of the demand — it must follow the SCN, not replace it.
Q3: Can I file appeal if order passed only on DRC-01?
Ans: Yes. High Courts have consistently held such orders violate natural justice.
Conclusion
This ruling strengthens the rights of taxpayers against arbitrary demands under GST.
If you’ve received a DRC-01 summary without a proper SCN, don’t stay silent. Let Efiletax review your case and help you challenge invalid demands.
👉 Contact Efiletax GST Experts Today
Summary
DRC-01 summary alone isn’t a valid GST notice. Gauhati HC quashes such orders, saying no SCN means no case. Learn your legal rights under Section 74.