Gauhati High Court
Page No.# 1/17 vs The State Of Assam And Ors on 27 March, 2026
Page No.# 1/17
GAHC010054222026
2026:GAU-AS:4451
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/1541/2026
SRI AMZAD ALI
S/O- SAKMAN MUNSHI.
R/O- SREEGRAM PT-VI, DHUBRI, P.O.- HATIPOTA. P.S.- CHAPAR, DIST.-
DHUBRI, ASSAM - 783348
VERSUS
THE STATE OF ASSAM AND ORS
REPRESENTED BY THE COMMISSIONER AND SECRETARY TO
GOVERNMENT OF ASSAM, DEPARTMENT OF FINANCE AND TAXATION,
DISPUR, ASSAM.
2:THE PRINCIPAL COMMISSIONER
STATE TAX
KAR BHAWAN
G.S. ROAD
DISPUR
GUWAHATI-781006.
3:THE ASSISTANT COMMISSIONER OF STATE TAX
DHUBRI ZONE
ASSAM
Advocate for the Petitioner : MR. R S MISHRA, MS. M DEY,MS B SARMA
Advocate for the Respondent : SC, FINANCE AND TAXATION,
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BEFORE
HON'BLE MR. JUSTICE N. UNNI KRISHNAN NAIR
ORDER
27/03/2026
Heard Mr. R.S. Mishra, learned counsel for the petitioner. Also heard Mr. B.
Gogoi, learned standing counsel, Finance & Taxation, Govt. of Assam.
2. The petitioner in the present proceeding, hence, presented a challenge to
the form GST DRC-01 dated 14.07.2025 as well as the order dated 21.08.2025
issued by the respondent No. 3, i.e. the Asstt. Commissioner of State Taxes,
Dhubri Zone, Dhubri.
3. The brief facts, requisite for adjudication of the issue arising in the
present proceeding, is noticed as under.
4. The petitioner, who is engaged in the business of manufacturing and sale
of bricks, is a registered assesee under the provisions of Central Goods &
Service Tax Act, 2017 and the Assam Goods and Services Tax Act, 2017. The
petitioner has a GST registration, bearing No. 18AQTPA0284H1ZQ. The
respondent No. 3, herein, i.e. the Asstt. Commissioner of State Taxes, had
issued a summary of show-cause notice in Form DRC-01 dated 14.07.2025
under Rule 142 of the CGST Rules which was uploaded in the GST portal. It is
the contention of the petitioner that no show-cause notice was uploaded along
with the summary of the said show-cause notice. The summary is in respect of
the financial years, 2019-2020 to 2024-2025. Along with the Form DRC-01, an
attachment to determination of tax was also uploaded. The petitioner was to
submit his reply. The petitioner further contented that without affording an
opportunity of hearing, the respondent No. 3, pursuant to issuance of Form
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DRC-01 dated 14.07.2025, passed the impugned order dated 21.08.2025,
demanding GST under Section 74 of CGST/AGST Act to the tune of Rs.
53,27,226/- (Rupees Fifty Three Lakhs Twenty Seven Thousand and Two
Hundred Twenty Six) along with interest and penalty. Along with the said order
dated 21.08.2025, a summary of the orders for each of the Financial years
applicable, was also uploaded in Form DRC-07.
5. The petitioner states that under Section 74 of the CGST/AGST Act, 2017, a
notice is mandated to be issued to the person chargeable with tax who had not
paid or which had been so short paid or the refund has been erroneously made
or who has wrongly been availed or unutilized input tax credit requiring him to
show-cause as to why he should not pay the amount specified in the notice
along with interest payable under Section 50 and a penalty levyable under the
Act of rules made there-under. It is contended by the petitioner that Sub-Section
(9) of Section 74 provides that the proper officer shall, after considering the
representation, if any, made by the person chargeable with tax, determine the
amount of tax, interest and a penalty due from such person and issue an order.
The petitioner further contends that Rule 142 of the CGST Rules, 2017, deals
with issuance of notice and order for demand of amounts payable under the
Act. It mandates that proper officer shall serve, along with the notice issued
under Section 52 or Section 73 or Section 74 or Section 76 or Section 122 or
Section 123 or Section 124 or Section 125 or Section 127 or Section 129 or
Section 130, a summary, thereof, electronically in Form GST DRC-01 and
therein, specify the amount of tax, interest and penalty payable by the person
chargeable with tax. The petitioner contends that a perusal of the relevant
provisions of the CGST Act, makes it clear that the proper officer shall issue
show-cause notice first and thereafter the summary, thereof, would be uploaded
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in Form DRC-01. It is the categorical contention of the petitioner, herein, that no
show-cause notice had preceded uploading of the Form DRC-01.
6. It is further contended by the petitioner that the provision of Rule 26(3) of
CGST Rules, 2017, provides that all notices, certificates and orders shall be
issued electronically by the proper officer or any other officer, who is authorized
to issue such notices or certificates or orders, through digital signature
certificate or through e-signature (as prescribed under the provisions of
Information and Technology Act, 2000). It is highlighted by the petitioner that
the summary of the order as uploaded in Form GST DRC-07, all dated
28.08.2025, did not contain the signature as required under Rule 26(3) of the
CGST Rules.
7. In the above premises, the petitioner has instituted the present
proceeding assailing the Form GST DRC-01 dated 14.07.2025, as well as the
order dated 21.08.2025 issued by the respondent No. 3.
8. Mr. R.S. Mishra, learned counsel for the petitioner, by reiterating the
contentions, hereinabove, has submitted that the Form GST DRC-01 dated
14.07.2025, having been so issued in clear violation of the provision of Section
74 of the CGST Act, 2017, the same would mandate interference by this Court.
He has submitted that the summary of the show-cause notice, as uploaded in
the portal, not being preceded by issuance of a show cause notice, the
respondent authorities could not have taken action in the matter and proceed to
issue the order dated 21.08.2025, basing on a summary of the show-cause
notice as uploaded vide the Form GST DRC-01 dated 14.07.2025. In support of
his submission Mr. Mishra, has relied upon a decision of a Coordinate Bench of
this Court, rendered in the case of Const ruction Catalysers Pvt. Ltd. Vs.
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State of Assam & Ors. judgment and order dated 26-09-2024 in W.P.(C) No.
3912/2024.
9. Per contra, Mr. B. Gogoi, learned Standing Counsel, Finance & Taxation
Department, Assam submitted that the respondent authority had issued the
summary of the show-cause notice in Form DRC-01, which was also
accompanied by the determination of the tax, which as per the respondents
would have provided all the details so requisite for the petitioner to submit his
reply in the matter. The learned counsel has, however, fairly submitted that
there is no separate show-cause notice, apart from the determination of the tax
as attached to the summary of the show-cause notice uploaded in the portal.
Mr. Gogoi, has submitted that no digital signature of the proper officer is found
to have been appended in the orders dated 21.08.2025. However, he has
submitted that when the summary of show-cause notice as well as summary of
the order uploaded in the GST DRC-01 and GST DRC-07, the same are duly
authenticated in the portal with digital signatures and without such
authentication the portal cannot be operated.
10. I have heard the learned counsel for the parties and perused the
materials available on record.
11. The issues arising in the present proceeding were also the issues arising
for consideration, in the proceeding of W.P.(C) No. 3912/2024, Construction
Catalysers Pvt. Ltd. (Supra). The Co-ordinate Bench of this Court, basing on
the submission of the parties, had for the purpose of analyzing the issues so
arising framed the following questions;
(i) Whether Show Cause Notices were issued prior to passing the
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Impugned Order under Section 73 (9) of the State Act?
(ii) Whether the determination of tax as well as the Order attached to the
Summary of the Show Cause Notice in GST DCR-01 and Summary of the
Order in GST DCR-07 can be said to be the Show Cause Notice and Order
respectively?
(iii) Whether the impugned orders under Section 73 (9) of the State Act is
in conformity with Section 75(4) of the State Act and is in consonance
with the principles of natural justice?
12. Thereafter, the learned Co-ordinate Bench of this Court, had drawn the
following conclusions:
(i) Whether Show Cause Notices were issued prior to passing the
Impugned Order under Section 73 (9) of the State Act.
15. From the perusal of the records, it would show that in the Summary of
the Show Cause Notices issued in GST DRC-01 to the petitioners in the
batch of writ petitions, there is a mention therein that there is a Show
Cause Notice attached. It is the case of the respondents that the said
attachment wherein determination of tax is mentioned is the Show Cause
Notice. The question therefore arises as to whether the said attachment
can be said to be a Show Cause Notice as per the mandate of both the
Central Act as well as the State Act and the Rules made therein under. It
would be apposite to take note of that in all these cases, the Summary of
the Show Cause Notices have been issued in terms with Section 73.
16. At this stage, this Court would briefly take note of Section 73. A
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perusal of Section 73 would show that the said provision is set into motion
when it appears to the Proper Officer that:-
(a) Any tax has not been paid; or
(b) Any tax short paid; or
(c) Any tax erroneously refunded; or
(d) Where input tax credit had been wrongly availed or utilized.
for any reason other than the reason of fraud or any willful misstatement
or suppression of facts to evade tax.
Taking into account that it is only in the circumstances referred to above,
the Proper Officer is required to issue a Show Cause Notice, therefore, the
Show Cause Notice is required to specifically mention the reason(s) and
the circumstances why the provision of Section 73 had been set into
motion. The person against whom the said Show Cause Notice is issued
would only have an adequate opportunity to submit a representation
justifying that the prerequisites for issuance of Show Cause Notice is not
there if and only if the reason(s) for issuance of the Show Cause is
specifically mentioned in the Show Cause Notice.
Section 73 further stipulates that upon consideration of the
representations, if any, the Proper Officer shall pass the order under
Section 73 (9) determining the amount of tax, interest and penalty.
It is also apposite to mention that Section 73 (2) and Section 73 (10) are
interconnected in as much as Section 73 (10) stipulates that within three
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years from the due date for furnishing the annual return for the financial
year, the order under Section 73 (9) can be passed. In terms with Section
73 (2), the Show Cause Notice is to be issued within three months prior to
the time limit prescribed in Section 73 (10).
In addition to the above, it would also show from conjoint reading of Sub-
section (1) (2) (3) and (4) of Section 73 that the legislature had
categorically distinguished the Show Cause Notice from the Statement
which is required to be issued by the Proper Officer or in other words,
irrespective of Statement to be issued in terms with Sub-section (3) of
Section 73, there is a requirement of issuance of a Show Cause Notice by
the Proper Officer.
17. At this stage, it is also pertinent to mention that in Section 73, there is
no mention of issuance of a Summary of Show Cause Notice. The
requirement of issuance of a Summary of the Show Cause Notice is seen
in Rule 142 of the Rules of 2017. Rule 142 (1) (a) and (b) is relevant for
which the same is quoted herein below:-
“142. Notice and order for demand of amounts payable under the
Act.-(1) The proper officer shall serve, along with the
(a) notice issued under section 52 or section 73 or section 74 or
section 76 or section 122 or section 123 or section 124 or section 125 or
section 127 or section 129 or section 130, a summary thereof
electronically in FORM GST DRC01,
(b) statement under sub-section (3) of section 73 or sub-section
(3) of section 74, a summary thereof electronically in FORM GST DRC-02,
Page No.# 9/17specifying therein the details of the amount payable.”
From a perusal of the above quoted Rule, it would show that in addition
to the Show Cause Notice to be issued under Section 73 (1) and the
Statement of determination of tax under Section 73 (3), there is an
additional requirement of issuance of a Summary of the Show Cause
Notice in GST DRC-01 and the Summary of the Statement in GST DRC-02.
The natural corollary from the above analysis is that the issuance of the
Show Cause Notice and the Statement of determination of tax by the
Proper Officer are mandatory requirement in addition to the Summary of
Show Cause Notice in GST DRC-01 and Summary of the Statement in GST
DRC-02.
18. The judgment of the learned Division Bench of the Jharkhand High
Court in the case of Nkas Services Private Limited (supra) had also dealt
with a similar issue and categorically held that a Summary of a Show
Cause Notice issued under GST DRC-01 cannot substitute the requirement
of a proper Show Cause Notice. Similarly, in the case of LC Infra Projects
Pvt. Limited (supra), the learned Single Judge of the Karnataka High Court
had also observed that the issuance of a Show Cause Notice is sine qua
non to proceed with the recovery of interest payable thereon under
Section 50 of the Act and penalty leviable under the provisions of the Act
or the Rules.
19. From the above analysis, this Court is of the view that the Summary of
the Show Cause Notice along with the attachment containing the
determination of tax cannot be said to be a valid initiation of proceedings
under Section 73 without issuance of a proper Show Cause Notice. The
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Summary of the Show Cause Notice is in addition to the issuance of a
proper Show Cause Notice. Under such circumstances, this Court is of the
unhesitant opinion that the impugned orders challenged in the instant
batch of writ petitions are contrary to the provisions of Section 73 as well
as Rule 142 (1) (a) of the Rules as the said impugned Orders were passed
with issuance of a proper Show Cause Notice.
(ii) Whether the determination of tax as well as the order attached to the
Summary to the Show Cause Notice in GST DRC-01 and the Summary of
the Order in GST DRC-07 can be said to be the Show Case Notice and
Order respectively.
20. While deciding supra, this Court duly dealt with what would constitute
a Show Cause Notice, the Statement as per Section 73 (3) as well as the
Summary to the Show Cause Notice in GST DRC-01 and Summary of the
Statement in GST DRC-02. This Court had also opined above that the
statement to be provided by the Proper Officer in terms with Section 73
(3) cannot be said to be a Show Cause Notice which is required to be
issued in terms with Section 73 (1). Therefore, the submission of the
respondents that the statement attached to the Summary of the Show
Cause Notice is the Show Cause Notice is completely misconceived and
contrary to Section 73 (1) and 73 (3). Be that as it may, a very pertinent
contention had been made by the learned counsel appearing on behalf of
the petitioners to the effect that the attachments to both the Summary of
the Show Cause Notice and Summary of the Order have no value as the
same contains no authentication of the Proper Officer. In that regard, the
learned counsels referred to Rule 26 (3) of the Rules and the judgment in
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the cases of M/s Silver Oak Villas LLP (supra) and A.V. Bhanoji Row
(supra).
21. Rule 26 (3) of the Rules of 2017 categorically stipulates as to how
notices, certificates and orders are to be authenticated. The said Sub-Rule
is reproduced herein under:-
“26.(3) All notices, certificates and orders under the provisions of
this Chapter shall be issued electronically by the proper officer or any
other officer authorised to issue such notices or certificates or orders,
through digital signature certificate [or through E-signature as specified
under the provisions of the Information Technology Act, 2000 (21 of
2000) or verified by any other mode of signature or verification as notified
by the Board in this behalf.]”
A perusal of the above quoted Sub-Rule would show that notices,
certificates and orders under the provisions of Chapter III shall be issued
electronically by the Proper Officer or any other officer authorized to issue
such notices or certificates or orders through digital signature certificate
or through e-signature as specified under the provisions of the
Information Technology Act, 2000 or verified by any other mode of
signature or verification as notified by the Board in that behalf. It is
relevant to take note of that Chapter III of the Rules of 2017 pertains to
Registration whereas in respect to Demand and Recovery, it is Chapter
XVIII.
22. Now therefore a question arises as to whether Rule 26 (3) can be
applicable to Chapter-XVIII when the said Sub-Rule on refers to
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ChapterIII. In the case of M/s Silver Oak Villas LLP (supra), the learned
Division Bench of the Telangana High Court had applied Rule 26 (3) of the
Rules of 2017 even to Chapter-XVIII of the Rules of 2017. In the case of
A.V. Bhanoji Row (supra), the learned Division Bench of the Andhra
Pradesh High Court held that the signatures cannot be dispensed with and
Sections 160 and 169 cannot save an order, notice, communication which
did not contain a signature. In another judgment of the learned Division
Bench of Delhi High Court in the case of Railsyls Engineers Private Limited
vs. Additional Commissioner of Central goods and Services Tax (Appeals-
11) and Anr., reported in (2023) 112 GSTR 143, the Delhi High Court held
that there was a requirement of at least putting the digital signatures on
the Show Cause Notice and Order in Original.
23. A perusal of the provisions of Section 73 would show that the Show
Cause Notice is required to be issued by the Proper Officer, the Statement
under Section 73 (3) is to be issued by the Proper Officer as well as the
Order under Section 73 (9) is required to be passed by the Proper Officer.
Section 2 (91) of the Act defines who is the Proper Officer meaning
thereby either the Commissioner or the Officer who had been specifically
entrusted by the Commissioner. As it is the statutory mandate that it is
only the Proper Officer who has the authority to issue Show Cause Notice
and the Statement and pass the order, the authentication in the Show
Cause Notice, Statement as well as the Order by the Proper Officer is a
must and failure to do so, makes the Show Cause Notice, Statement and
Order ineffective and redundant.
24. It is also important to note that the Act only stipulates that notice
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would be issued and order would be passed by the Proper Officer. The
manner in which the Proper Officer would authenticate the notice(s) or
the order(s) in so far as other Chapters of the Rules of 2017 is silent
except Chapter-III. Taking into account the utmost necessity of the
authentication by the Proper Officer, this Court is of the opinion unless
appropriate insertion are made in the Rules or notification are issued as
per the directions of the Board to fill the void in the Rules of 2017, the
authentication in the manner stipulated in Rule 26 (3) of the Rules of
2017 has to be applied as and when the Proper Officer is required to issue
notice or Statement and pass Order in terms with the Act.
(iii) Whether the impugned orders under Section 73 (9) of the State Act is
in conformity with Section 75 (4) of the State Act and is in consonance
with the principles of natural justice.
25. This Court has duly perused the Summary of the Show Cause Notices
wherein the petitioners were only asked to file their reply on a date
specified. There was no mention as to the date of hearing and the Column
was kept blank. In two writ petitions, i.e. WP(C) No.3912/2024 and WP(C)
No.3933/2024, the petitioners had sought for an opportunity of hearing
which was however not given. In this regard, if this Court takes note of
Section 75 (4) of both the Central Act as well as State Act, it would be
seen that it is the mandate of the said provision that an opportunity of
hearing should be granted when a request is received in writing from the
person chargeable with tax or penalty or when any adverse decision is
contemplated against such person. The mandate of Section 75 (4) of both
the Central and State Act are safeguards provided to the assessees so that
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they can have a say in the hearing process.
26. It is also seen that in the reply to be submitted in Form GST DRC06,
there is an option given for personal hearing at Sl. No.7. As stated above,
the petitioners in WP(C) No.3912/2024 and WP(C) No.3933/2024 have
specifically filled up the Column as “Yes” wherein the option for personal
hearing was mentioned. Inspite of that, there was no opportunity of
hearing afforded to those petitioners.
27. The learned Division Bench of the Chhattisgarh High Court in the case
of Mahindra & Mahindra Limited (supra) had categorically observed that
when the statute contains a mandate of hearing, the same has to be
granted, else it would render the provision porous.
28. This Court is of the opinion that when the statute is clear to provide
an opportunity of hearing, there is a requirement of providing such
opportunity. In fact a perusal of the Form GST DRC-01 enclosed to the
writ petitions shows details have been given as regards the date by which
the reply has to be submitted; date of personal hearing; time of personal
hearing and venue of personal hearing. It is seen that in the Summary of
the Show Cause Notice only the date for submission of reply has been
mentioned. In respect to other details as stated above have been
mentioned to as ‘NA’. It may be that the Proper Officer assumed that
based on the reply he/she may proceed with the adjudication depending
as to whether the person to whom the notice is issued had opted for
personal hearing or not. But in a case where no reply is filed, a question
arises whether the Proper Officer can pass an adverse order without
providing an opportunity for hearing. The answer has to be in the
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negative else it would render the second part of Section 75 (4) redundant.
13. Basing on the said reasoning arrived at on analysis of the issues in the
said proceeding, the Co-ordinate Bench of this Court, had drawn the following
conclusions:
29. On the basis of the above analysis and determination, this
Court disposes of the instant batch of writ petitions with the following
observations and directions:-
(A) The Summary of the Show Cause Notice in GST DRC-01 is not
a substitute to the Show Cause Notice to be issued in terms with Section
73 (1) of the Central Act as well as the State Act. Irrespective of issuance
of the Summary of the Show Cause Notice, the Proper Officer has to issue
a Show Cause Notice to put the provision of Section 73 into motion.
(B) The Show Cause Notice to be issued in terms with Section 73
(1) of the Central Act or State Act cannot be confused with the Statement
of the determination of tax to be issued in terms with Section 73 (3) of
the Central Act or the State Act. In the instant writ petitions, the
attachment to the Summary of Show Cause Notice in GST DRC-01 is only
the Statement of the determination of tax in terms with Section 73 (3).
The said Statement of determination of tax cannot substitute the
requirement for issuance of the Show Cause Notice by the Proper Officer
in terms with Section 73 (1) of the Central or the State Act. Under such
circumstances, initiation of the proceedings under Section 73 against the
petitioners in the instant batch of writ petitions without the Show Cause
Notice is bad in law and interfered with.
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(C) It is also noticed that the Show Cause Notice and the
Statement in terms with Section 73 (1) and 73 (3) of both the Central Act
or the State Act respectively are required to be issued only by the Proper
Officer as defined in Section 2 (91). Additionally, the order under Section
73 (9) is also required to be passed by the Proper officer. The Summary of
the Show Cause Notice, the Summary of the Statement under Section 73
(3) and the Summary of the Order passed in terms with Section 73 (9) are
to be issued in GST DRC-01, GST DCR-02 and GST DRC-07 respectively.
The issuance of the Summary of the Show Cause Notice, Summary of the
Statement and Summary of the Order do not dispense with the
requirement of issuance of a proper Show Cause Notice and Statement as
well as passing of the Order as per the mandate of Section 73 by the
Proper Officer. As initiation of a proceedings under Section 73 and passing
of an order under the same provision have consequences. The Show
Cause Notice, Statement as well as the Order are all required to be
authenticated in the manner stipulated in Rule 26 (3) of the Rules of
2017.
(D) The Impugned Orders challenged in the writ petitions are in
violation of Section 75 (4) as no opportunity of hearing was given as
already discussed herein above.
14. On perusal of the conclusions drawn by the coordinate Bench of this
Court in the case of Construction Catalysers Pvt. Ltd. (Supra), this Court is
in respectful agreement with the same and also holds that the reasonings so
advanced, therein, would also apply to the issues arising in the present
proceeding. Accordingly, the summary of the show-cause notice in From GST
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DRC-01 and the orders dated 21.08.2025 (Annexure-D Colly) stand set aside
and quashed.
15. In view of the above position, this Court holds that it cannot be unmindful
of the fact that it is only on account of certain technicalities and the manner in
which the impugned orders were passed, that this Court has interfered with the
impugned orders. It is also relevant to take note of that the respondent
authorities were under the impression that the determination of tax, which was
attached to the summary of the show cause notice, would constitute a valid
show cause notice. Under such circumstances, in the interest of justice, this
Court while setting aside the impugned orders, grants liberty to the respondent
authorities to initiate de novo proceedings under Section 74, if deemed fit, for
the relevant financial year in question. This Court further observes and directs
that the period from the date of issuance the summary of the show cause
notices, under challenge in the present proceedings, upon the petitioners, till
the date a certified copy of the instant order is served upon the proper officer,
be excluded while computing the period prescribed for passing of the order
under Section 74 (10) of the Central Act as well as the State Act as the case
may be.
16. With the above observations and directions, the writ petition stands
disposed of.
JUDGE
Comparing Assistant