> **Legal basis:** CGST Act, 2017 — Section 73(1), read with Rule 142(1)(a) of the CGST Rules, 2017 — Effective: ongoing. Source: https://www.taxscan.in/top-stories/drc-01-only-summary-of-show-cause-notice-cannot-replace-scn-gstat-sets-aside-entire-gst-demand-proceedings-1451514. Last updated: September 2026. If you received a Form DRC-01 for a FY 2022-23 GST demand but never received a separate, properly served Show Cause Notice, a September 2026 GST Appellate Tribunal ruling may affect your legal position — and the statutory window for the department to issue a valid notice for that year closes on September 30, 2026. ## What the GSTAT Ruled In *Sakhsham Knowledge Services Private Limited v. Nitin Bansal* (APL/54/LCK/2026, 2026 TAXSCAN (GSTAT) 170, dated 14 September 2026), the GST Appellate Tribunal, Lucknow Bench, set aside the entire demand proceedings on a procedural ground. The Tribunal held that Form DRC-01 issued under Rule 142(1)(a) is in the nature of a summary and cannot stand on its own, independent footing in place of the statutory notice mandated under Section 73(1). In plain terms: DRC-01 is a summary. It is not the notice itself. The facts were stark. The show cause notice attached to the DRC-01 in that matter was addressed to a different taxpayer, not the appellant, which meant the appellant never had a genuine opportunity to respond to the specific allegations raised against it. The Tribunal found this fatal to the entire proceedings. This ruling is reported by TaxScan as a secondary source. The official GSTAT order should be independently verified before it is cited or relied upon in any live proceeding. ## Section 73(1) vs Rule 142(1)(a): Why the Distinction Matters Section 73(1) of the CGST Act mandates that where a tax officer proposes to recover tax that is unpaid, short-paid, or wrongly refunded in non-fraud cases, the officer must issue a Show Cause Notice specifying the tax period, the amount alleged to be short-paid, the reasons for the proposed recovery, and the taxpayer's opportunity to be heard. Rule 142(1)(a) of the CGST Rules provides for Form DRC-01, described as a summary of that show cause notice, generated electronically on the GSTN portal when adjudication begins. > **Key point:** GSTAT has held that Form DRC-01 is only a summary under Rule 142(1)(a) and cannot substitute the statutory Show Cause Notice required under Section 73(1) of the CGST Act. | Document | Legal basis | What it must contain | Can it stand alone? | | --- | --- | --- | --- | | Show Cause Notice (SCN) | Section 73(1), CGST Act | Tax period, alleged short-payment amount, reasons, opportunity to be heard | Yes — this is the statutory requirement | | Form DRC-01 | Rule 142(1)(a), CGST Rules | Electronic summary generated on the GSTN portal | No — GSTAT held it cannot replace the SCN | ## Why September 30, 2026 Matters for FY 2022-23 Under Section 73(2) read with Section 73(10) of the CGST Act, the adjudicating authority must issue an order within three years from the due date of the annual return for the relevant financial year. For FY 2022-23, the GSTR-9 due date was 31 December 2023, so the three-year period ends 31 December 2026. Section 73(2) separately requires that the Show Cause Notice precede the order by at least three months, which pushes the last date to issue a valid SCN for FY 2022-23 to September 30, 2026. This has three practical consequences. If no valid SCN has been issued by that date, the department loses jurisdiction to raise a Section 73 demand for FY 2022-23. If what was issued was only a DRC-01 without a properly served, correctly addressed SCN, that notice may be open to challenge as invalid. And a demand order passed on the basis of a defective SCN would be vulnerable to the same challenge that succeeded in APL/54/LCK/2026. ## How to Check Whether Your FY 2022-23 Demand Is at Risk Go through every FY 2022-23 GST demand notice you have received and check the following: - Was a separate document titled "Show Cause Notice" issued, or did you only ever receive a DRC-01? - Was the SCN addressed to your correct GSTIN and legal name, or to a different entity? - Was the SCN served on you as required under Section 169 of the CGST Act — proper issuance is a distinct requirement from proper service. - Does the SCN independently articulate the allegations, or does it merely refer back to the DRC-01 without setting out the alleged shortfall on its own? ## What to Do Before September 30, 2026 If you have a pending FY 2022-23 demand proceeding, obtain copies of every notice on record — the DRC-01, any SCN, DRC-02, and any order — from the GSTN portal. Verify that the SCN is a standalone document bearing its own SCN number, correctly addressed to your entity, and served under Section 169. If you find a defect, consider filing a representation before an order is passed, citing the specific defect involved. If an order has already been passed, assess with your advisor whether an appeal under Section 107 of the CGST Act is appropriate on the ground of procedural invalidity. Where proceedings are still open on the department's side, the corresponding requirement is that a valid Section 73(1) SCN — not merely a DRC-01 summary — be issued before September 30, 2026, failing which the demand window for FY 2022-23 closes. ## The Broader Judicial Trend The APL/54/LCK/2026 ruling is consistent with a wider trend reported through 2025-26, in which courts and GSTAT benches have repeatedly held that a DRC-01 summary cannot substitute the statutory Section 73 notice, and that demand orders passed on defective notices are liable to be set aside. The consistent thread across these rulings is that the procedural framework of Section 73 protects the taxpayer's right to be heard, and that right is not treated as a mere formality. I'm CA Harun Raaj, Visakhapatnam. If you have a pending FY 2022-23 GST demand notice and want it reviewed against this ruling before the September 30, 2026 deadline, reach out to Harun Raaj & Associates. --- ## See Also - [Section 73 GST Demand Notice FY 2022-23: Deadline 30 Sep 2026](https://www.harunraaj.com/blog/section-73-gst-demand-notice-fy-2022-23-deadline-30-september-2026) - [ITC Claim Deadline for FY 2025-26: November 30, 2026, Not September GSTR-3B](https://www.harunraaj.com/blog/itc-claim-deadline-fy-2025-26-november-30-2026) - [Supreme Court GST Ruling: No ITC If Supplier Doesn't Pay Tax](https://www.harunraaj.com/blog/supreme-court-itc-denial-unpaid-supplier-tax) Canonical: https://www.harunraaj.com/blog/drc-01-not-show-cause-notice-gstat-2026-ruling-fy-2022-23