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 INDEX
Whether the penalty order without proper service of personal hearing 1
notice amounts to violation of natural justice and merits interference?
Whether a show cause notice and consequential tax determination 2
under Section 73 of the CGST Act can be issued in the name of a
deceased person?
Whether a writ petition is maintainable to challenge a demand order 3
u/s 74 alleging fraudulent availment of ITC from non-existent firms,
and whether the High Court can waive the mandatory 10% pre-deposit
for filing appeal?
Whether scrutiny notices under Section 61 can be issued on the basis 4
of difference between declared transaction value and market price,
even when no discrepancy exists in the filed returns?
Whether a demand order passed under Section 73 of the CGST Act can 5
exceed the amount proposed in the SCN and still remain valid under
law?
Whether rejection of appeal solely on the ground of non-furnishing of 6
pre-deposit under Section 107(6) is valid when the Appellate Authority
has already proceeded to hear the matter on merits without informing
the defect?
Whether an order passed under Section 73(9) of the CGST Act without 7
setting out relevant facts and reasons is liable to be set aside?
Whether dismissal of an appeal without issuing notice for the 8
rescheduled hearing date violates principles of natural justice and
renders the appellate order unsustainable?
Whether a writ petition is maintainable against a penalty order u/s 74 9
read with section 122(1) of the CGST Act when allegations involve
complex factual disputes and an appellate remedy under Section 107
is available?
Whether a rectification application under Section 161 of the CGST Act 10
can be rejected without recording reasons or affording the assessee
an opportunity of hearing?
Whether parallel proceedings by CGST and SGST departments on the 11
same subject matter are legally sustainable under the GST law?
Whether recovery proceedings can be initiated under Section 75(12) 12
for tax already declared and included in returns filed under Section 39
of the CGST Act?
Whether rejection of appeal due to marginal delay is justified when the 13
Appellate Tribunal is non-functional and the petitioner has already
deposited the required pre-deposit?
Whether denial of opportunity to reply due to non-service of SCN 14
uploaded only under 'Additional Notices and Orders' tab can vitiate the
assessment proceedings u/s 74?
Whether the taxpayer can be granted relief to pay tax dues in forty- 15
eight monthly instalments under Section 80 of the CGST Act?
Can an assessment order under Section 62 of the CGST Act be 16
sustained in the absence of prior notice under Section 46 and without
recording any reasons?
Whether the department can raise a demand u/s 129 after physical 17
verification of goods (MOV-04) found no discrepancies, by
subsequently taking a contrary stand without new evidence?
Whether cancellation of GST registration without disclosing the name 18
of the proper officer in the SCN and without affording personal hearing
violates is liable to be quashed despite the appeal being dismissed as
time-barred?
Whether a service provider can be treated as an “intermediary” under 19
Section 2(13) read with Section 13(8) of the IGST Act when support
services are provided on a principal-to-principal basis to a foreign
parent company for facilitating student placements abroad?
Whether a writ petition is maintainable against an adjudication order 20
under Section 74 of the CGST Act when the reply to the SCN was not
considered?
Whether a writ petition challenging a SCN can be entertained despite 21
the availability of an alternative statutory remedy under Section 107 of
the CGST Act?
Whether GST is leviable on assignment of leasehold rights in an 22
industrial plot allotted by GIDC to a third party?
Whether penalty under Section 129 of the GST Act can be imposed 23
solely for non-filling of Part-B of the e-way bill in the absence of any
finding regarding intent to evade tax?
Whether the demand raised u/s 73 can exceed the amount quantified in 24
DRC-01 when the SCN merely seeks documents for clarification, but
no response is furnished?
Whether the denial of opportunity to respond to a Show Cause Notice 25
merely because it was uploaded under the ‘Additional Notices and
Orders’ tab on the GST portal, resulting in dismissal of appeal as time-
barred, is legally sustainable?
About the Author 26
 Whether the penalty order without proper service of personal
hearing notice amounts to violation of natural justice and merits
interference?
No, The Hon’ble Delhi High Court in the case of SS Enterprises v. Office of the Commissioner Central Tax Delhi West
& Another, [W.P.(C) 5684/2025, decided on 01.05.2025 | Citation: 2025 (5) TMI 557 - DELHI HIGH COURT] declined to
interfere with the penalty order and instead granted liberty to the petitioner to approach the appellate authority. The
petitioner had challenged the penalty order dated 31.01.2025 imposing a liability of ₹36.05 lakhs under the CGST Act,
contending that the personal hearing notice was not properly served and the Relied Upon Documents (RUDs) were not
provided. It was alleged that the petitioner had availed fraudulent Input Tax Credit based on fake invoices issued by entities
linked to one Ms. Aaarti Kapoor, in a broader case involving ₹172 crores. The hearing notice dated 09.01.2025 was
received only on 18.01.2025, by which time two out of three hearing dates—13.01.2025 and 16.01.2025—had already
passed. The petitioner claimed that this left it with only one effective opportunity on 21.01.2025. The Hon’ble Court held that
since the petitioner did in fact receive the notice before the last scheduled hearing and chose not to appear, it could not
later allege denial of opportunity. It also clarified that Section 75(5) of the CGST Act does not mandate three separate
hearings, but only limits adjournments to three. However, acknowledging the petitioner’s claim that RUDs were not

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provided, the Court directed the department to furnish the same within two weeks and allowed the petitioner to file an
appeal within 30 days thereafter. The appellate authority was directed not to dismiss the appeal on limitation grounds and

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to decide the matter on merits.

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Author’s Comments:

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In the author’s considered view, the judgment highlights a prudent judicial reluctance to intervene under Article 226 where

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statutory appellate remedies remain unexhausted and the alleged procedural lapses do not meet the threshold of grave
injustice. The plea of denial of natural justice loses force when the taxpayer fails to avail even the final hearing opportunity
despite prior notice. Section 75(5) does not guarantee three hearings—it only restricts adjournments to a maximum of

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three. Therefore, when a notice is served before the final hearing and the assessee still abstains from appearance, it

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becomes difficult to plead procedural prejudice.
The real missed opportunity for the petitioner lies in not taking recourse under Section 67(10) of the CGST Act. This

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provision empowers the taxpayer to request the Commissioner for disclosure of all the investigative material—particularly

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those that form the basis of allegations. Filing such an application would have created a procedural record of demand for
the Relied Upon Documents (RUDs), strengthening the taxpayer’s case. Strategic invocation of Section 67(10) not only

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compels the department to disclose foundational evidence, but also fortifies the taxpayer’s claim of procedural unfairness, if
the disclosure is denied or delayed.

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Importantly, taxpayers must build their defense proactively—not just in court pleadings but in the administrative process
itself—by asserting their statutory rights and maintaining a documented trail of procedural objections. Judicial relief is often

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contingent not just on the existence of a right, but on the demonstration of timely and diligent effort to protect that right.

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Whether a show cause notice and consequential tax determination
under Section 73 of the CGST Act can be issued in the name of a
deceased person?
No, The Hon’ble Allahabad High Court in the case of Devendra Kumar Singh (Deceased) v. State of U.P. and Another,
[Writ Tax No. 2109 of 2025, decided on 08.05.2025 | Citation: 2025 (5) TMI 562 - ALLAHABAD HIGH COURT] quashed
the demand order dated 31.07.2024 issued in the name of a deceased person under Section 73 of the CGST Act, holding
that proceedings conducted against a dead person are void ab initio. In this case, Devendra Kumar Singh, a sole proprietor,
had passed away on 01.05.2021, and his GST registration had been cancelled effective from 01.04.2021. Despite being
aware of his death, the department issued a show cause notice dated 08.05.2024 and passed a tax determination order
under Section 73 without issuing any notice to the legal heir. The petitioner, being the son of the deceased, argued that the
entire proceedings were invalid as they were initiated and concluded against a non-existent person. The department sought
to justify the recovery relying on Section 93 of the CGST Act, which provides for recovery from legal representatives. The
Hon’ble Court held that while Section 93 authorizes recovery from legal representatives, it does not permit determination of
liability against a deceased person without involving such legal heirs. The Hon’ble Court emphasized that once the taxpayer
has died, the legal representative must be issued a fresh show cause notice and the determination must take place only

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after affording them due opportunity. Accordingly, the Hon’ble Court allowed the writ petition, set aside the demand order,
and granted liberty to the department to initiate proceedings afresh in accordance with law by issuing notice to the legal

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heir.

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Author’s Comments

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In the author’s considered view, all proceedings initiated against a deceased person are legally void and non-est. This

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principle flows not only from natural justice but is reinforced by a combined reading of Section 93 and Section 169 of the
CGST Act, 2017, as well as well-established jurisprudence under the Code of Civil Procedure and allied tax statutes.
Section 93 deals only with recovery of a determined tax liability from the estate of the deceased—it does not permit fresh

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determination against a person who no longer exists in law.

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The Hon’ble Kerala High Court in Benoy Abraham v. State Tax Officer [165 taxmann.com 533 (Kerala)[09-07-2024]
held that issuance of a show cause notice or adjudication order in the name of a deceased person renders the proceedings

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void abinitio, and such orders cannot be sustained even if recovery is sought under Section 93.

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Furthermore, unlike the Income-tax Act, which contains specific enabling provisions under Section 159 to initiate or
continue proceedings against legal heirs, the CGST Act is silent on this aspect. This legislative gap means that no

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proceedings can be carried against a legal representative and no lawful determination or recovery action can be taken post
the taxpayer's death.

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Also, under Section 169 of the CGST Act, any notice or order must be “served” to be enforceable. Service on a deceased
person is a legal impossibility, and such service cannot be presumed valid merely because the portal was used or notices

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were uploaded electronically.
This legal position is further grounded in constitutional principles. Proceedings against a non-existent person violate Articles
14 and 21 by denying procedural fairness and by creating fictitious liability. Such actions are arbitrary and legally
unsustainable.

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 Whether a writ petition is maintainable to challenge a demand
order u/s 74 alleging fraudulent availment of ITC from non-
existent firms, and whether the High Court can waive the
mandatory 10% pre-deposit for filing appeal?
No, The Hon’ble Allahabad High Court in case of M/s Reliable Trading Company v. Joint Director, DGGI, Zonal Unit,
Meerut & Ors., [Writ Tax No. 1177 of 2025, decided on 08.05.2025 | Citation: 2025 (5) TMI 561 - ALLAHABAD HIGH
COURT] dismissed the writ petition on the ground of availability of an equally efficacious alternative remedy by way of
appeal under Section 107 of the CGST Act. The petitioner, engaged in the trade of heavy metals, was accused of availing
fraudulent Input Tax Credit on the strength of invoices issued by eight non-existent firms. Despite the petitioner’s claims of
valid documentation and bank transactions, the department relied on investigation reports, physical inspections, and
statements of transporters and other parties to conclude that no actual movement of goods had occurred. The adjudicating
authority passed an order confirming the demand, rejecting the petitioner’s plea for cross-examination and finding
deliberate fraud in the transactions. The petitioner approached the Hon’ble High Court directly under Article 226,
contending that invocation of Section 74 was unjustified and seeking waiver of the mandatory 10% pre-deposit. The
Hon’ble Court, relying on the Supreme Court decisions in Ecom Gill Coffee Trading (2023) 4 Centax 223 (S.C.) and
Jaipur Vidyut Vitran Nigam Ltd (2024) 8 SCC 513., held that cases involving fraud, wilful misstatement, or suppression of

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facts rightly fall under Section 74, and that the burden lies on the taxpayer to prove actual receipt of goods—not merely rely
on invoices or payments. The Court reiterated that writ jurisdiction cannot be invoked to re-appreciate factual findings or

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bypass statutory remedies, particularly when no jurisdictional infirmity or violation of natural justice is evident. The prayer to

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waive pre-deposit was also rejected as contrary to law. Accordingly, the writ petition was dismissed with liberty to pursue
appellate remedy as per law.

Authors Comments

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From a strategic standpoint, taxpayers must internalize the guiding principles for maintainability of writ petitions in tax
matters. A writ is maintainable only when: (a) the impugned order or notice is ex-facie without jurisdiction or violates natural

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justice; and (b) the available statutory remedy is either not efficacious or incapable of addressing the core grievance. If the

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core issue requires appreciation of evidence—such as cross-examination of witnesses, verification of transport records, or
inspection reports—the remedy lies in appeal, not writ. The role of the High Court is not to function as an appellate authority

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and re-evaluate factual matrix, but to intervene only when there is a glaring jurisdictional error or violation of natural justice.

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Furthermore, the attempt to secure a waiver of the mandatory 10% pre-deposit under Section 107(6) was rightly rejected.
Courts have consistently held that such pre-deposit is a condition precedent for invoking the appellate jurisdiction under the

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CGST Act, and no authority, not even the High Court, can override the express legislative mandate unless exceptional
circumstances are shown. In this context, a blanket plea for waiver based merely on financial hardship or allegation of

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excess demand is unsustainable in law.
The Delhi High Court’s ruling in KMG Industrial Traders Pvt. Ltd. & Anr. v. The Additional Commissioner

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Adjudication, CGST, [W.P.(C) 5703/2025, decided on 01.05.2025 | Citation: 2025 (5) TMI 632 - DELHI HIGH COURT]
further supports this principle by holding that challenges to factual adjudication must be routed through the appellate
process, not via writ.

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 Whether scrutiny notices under Section 61 can be issued on the
basis of difference between declared transaction value and
market price, even when no discrepancy exists in the filed
returns?
No. The Hon’ble Jharkhand High Court in the case of M/s Sri Ram Stone Works & Others v. State of Jharkhand &
Others, [2025 (5) TMI 772 - JHARKHAND HIGH COURT, dated 09.05.2025] held that issuance of GST ASMT-10 notices
under Section 61 for questioning sale price below market value—despite no discrepancies in returns—is without jurisdiction
and beyond the scope of scrutiny provisions. The petitioners, comprising various registered dealers and mining lessees
engaged in the sale of stone boulders and chips, challenged the legality of GST ASMT-10 notices issued under Section 61
of the Jharkhand GST Act. These notices sought explanations for the declared value of taxable supplies being lower than
the prevalent market price and threatened initiation of action under Sections 73 or 74. The petitioners contended that the
scrutiny provisions under Section 61 only allow for verification of discrepancies in returns, and not for questioning the
declared transaction value based on market comparisons, unless such transactions are shown to be sham or fraudulent.
They further argued that the valuation of supplies is governed by Section 15 of the Act, which treats the transaction value
(price actually paid) as the basis unless the transactions are not at arm’s length.
The Hon’ble High Court accepted the petitioners’ arguments and quashed all the impugned ASMT-10 notices. The Hon’ble

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Court held that Section 61 enables the scrutiny of returns to identify discrepancies, but cannot be invoked to question the
declared sale price merely because it is lower than the market price. It reiterated that unless there is evidence of a sham

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transaction, or the transaction is not at arm’s length, the price actually received must be accepted. The Court emphasized

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that merely selling at a concessional rate does not warrant action under scrutiny provisions. However, the Court left open
the possibility of issuing fresh notices for discrepancies genuinely arising from returns or related particulars, excluding those

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based merely on price differences.

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Author’s Comments:
This decision is a reaffirmation of the limited jurisdiction conferred under Section 61 of the CGST Act. The provision allows

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scrutiny of returns to identify discrepancies—not to question business pricing decisions or conduct market value

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comparisons. A discrepancy, by definition, must arise within the four corners of the return and the documents annexed
therewith. If the return is internally consistent and in alignment with the GSTR-1, GSTR-3B, and other annexures, then no

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scrutiny notice can be issued simply because the declared transaction value is lower than a so-called "market price."

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The attempt by tax authorities to convert Section 61 scrutiny into a valuation investigation—without any allegation of
collusion, non-arm’s length pricing, or sham transactions—is procedurally and legally unsustainable. As rightly noted by the

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Court, simply because the taxpayer sold goods at a price lower than others in the market cannot, by itself, trigger a
presumption of tax evasion or undervaluation. Any such presumption must arise through evidence, not through comparison.

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In the author’s view, this ruling has significant preventive value. It draws a firm line between “return-based scrutiny” and
“market-based suspicion,” thereby shielding taxpayers from arbitrary fishing inquiries masked as scrutiny. Where authorities

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wish to question valuation, they must invoke the proper statutory machinery—such as audit (Section 65), inspection
(Section 67), or anti-evasion proceedings under Section 74—backed by credible reasons. Scrutiny under Section 61,
however, is a pre-adjudication exercise, where no demand can be fastened.
Additionally, it is important to underscore that responding to ASMT-10 notices under Section 61 does not amount to
admission. Taxpayers should avoid the reflexive instinct to over-disclose or explain normal pricing decisions unless there is
a genuine discrepancy. In this context, a useful but underused tool is Section 160(2) of the CGST Act. It provides that if the
taxpayer has already acted upon a notice without questioning its validity, they are deemed to have waived their objection.
However, if the taxpayer contests the jurisdiction of the notice at the earliest opportunity, especially when no discrepancy
exists, they may be able to bring finality to the matter at the preliminary stage itself.
Alternatively, taxpayers could have used embargo given u/s 160(2) objecting to the jurisdiction of the notice by citing that no
“discrepancy” exists in the return, rather than resorting to Writ court.

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 Whether a demand order passed under Section 73 of the CGST Act
can exceed the amount proposed in the SCN and still remain valid
under law?

No, the Hon’ble Allahabad High Court in the case of M/s Vibhuti Tyres v. State of U.P. and Another [Writ Tax No. 2055
of 2025, decided on 07.05.2025 | Citation: 2025 (5) TMI 767 - ALLAHABAD HIGH COURT] quashed the demand order
passed under Section 73(9) of the CGST Act for violating Section 75(7), which mandates that the amount of tax, interest,
and penalty demanded in the final order must not exceed the amount specified in the notice. In the instant case, a show
cause notice dated 29.09.2023 had proposed recovery of ₹8,81,080/- towards tax, interest, and penalty. However, the final
order dated 18.11.2023 imposed a demand of ₹32,97,336/-, including tax, interest, and penalty—far exceeding the amount
proposed in the notice.
The petitioner challenged the order on the ground that such escalation of liability, without opportunity to respond, was
patently illegal. The department argued that interest and penalty being statutory, could be imposed regardless of their
mention in the show cause notice. However, the Hon’ble Court rejected this argument and held that Section 75(7) clearly
restricts the adjudicating authority from confirming any demand beyond what is stated in the notice. Since the order violated
this provision, it was held to be unsustainable. The Court set aside the impugned order and remanded the matter for fresh

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adjudication after granting opportunity of hearing and permitting the petitioner to file a reply to the original show cause
notice.

Author’s Comments:

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This judgment reinforces the inviolable statutory protection under Section 75(7) of the CGST Act, 2017, which categorically

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bars the tax authorities from confirming any amount of tax, interest, or penalty in excess of what is proposed in the SCN.

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This provision acts as a vital procedural safeguard to ensure that adjudication remains confined to the specific allegations
and quantifications stated in the SCN, thereby upholding the taxpayer’s right to a fair and meaningful response.
In the author’s considered view, the alternate plea available to the petitioner—which could have been decisive—was to

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challenge the very foundation of the proceedings on the ground that no valid SCN under Section 73(1) was ever issued.

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Instead, only a summary in Form GST DRC-01, as required by Rule 142(1)(a), was issued. This is a common procedural
lapse wherein tax authorities rely on DRC-01 as a surrogate for a proper notice, bypassing the mandatory requirement to

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set out the factual allegations, legal basis, and grounds of demand in a detailed notice.

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This legal flaw was categorically exposed in the landmark judgment of the Hon’ble Gauhati High Court in Udit Tibrewal v.
State of Assam [2024 (11) TMI 108 – Gauhati HC / 2025 (92) G.S.T.L. 252 (Gau.)], where the Court held that the

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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 SCN, the

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Proper Officer has to issue a SCN to put the provision of Section 73 into motion.
Moreover, while Section 75(9) allows interest to be recovered even if not specifically quantified in the SCN—since it is

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considered a statutory consequence—the same presumption does not apply to penalty. The legislature has consciously
provided for this differentiation: only the omission of interest is cured by Section 75(12), not penalty. Therefore, if penalty is
not proposed in the SCN, the adjudicating authority cannot introduce it later by treating its omission as a mere procedural
defect.

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Whether rejection of appeal solely on the ground of non-furnishing
of pre-deposit under Section 107(6) is valid when the Appellate
Authority has already proceeded to hear the matter on merits
without informing the defect?
No, the Hon’ble Orissa High Court in the case of M/s Harsheel Auto Planet, Sundergarh v. Commissioner (Appeals),
CGST [W.P.(C) No. 6650 of 2025, decided on 07.05.2025 | Citation: 2025 (5) TMI 765 - ORISSA HIGH COURT] set
aside the appellate order that dismissed the taxpayer’s appeal for non-compliance with Section 107(6) of the CGST Act,
despite having proceeded with the hearing on merits. The petitioner had filed a manual appeal challenging the adjudication
order under Section 73 of the CGST Act and appeared before the Appellate Authority when notice of hearing was issued.
The petitioner submitted written submissions and argued the case on merits. However, the appeal was dismissed solely on
the ground that the mandatory pre-deposit had not been made, without any prior intimation regarding the defect or an
opportunity to cure it.
The Hon’ble High Court observed that once the Appellate Authority had issued notice and proceeded to hear the appeal on
merits, it was incumbent upon the authority to inform the appellant about any defect, particularly the absence of pre-deposit,
before taking an adverse decision. The Court noted that the appeal was otherwise defect-free and the omission was
curable had the defect been pointed out earlier. Since the failure to alert the petitioner about the missing pre-deposit

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amounted to a denial of a reasonable opportunity and violated principles of natural justice, the appellate order was held to
be unsustainable. The Court accordingly quashed the order and granted the petitioner five days to make the requisite pre-

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deposit. The matter was remanded back to the Appellate Authority to be heard afresh on merits.

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Author’s Comments:

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This case presents an interesting conflict between statutory rigidity and procedural fairness. Section 107(6) of the CGST

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Act imposes a mandatory condition for admission of an appeal—a minimum 10% pre-deposit of the disputed tax amount.
The language of the provision is couched in negative terms, reflecting a legislative bar on the admissibility of appeals that
do not comply with the pre-deposit requirement. As a result, no discretion vests in the appellate authority to waive or dilute

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this statutory prerequisite, even where the omission is inadvertent or technical.

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However, in the author’s view, this judgment does not dilute the mandatory nature of Section 107(6). Instead, it rests on the
procedural failure of the authority in not bringing the defect to the notice of the appellant, despite engaging with the matter

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on merits. In the author’s considered opinion, statutory bars must be harmoniously read with procedural fairness. While the

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law prohibits acceptance of an appeal sans pre-deposit, it does not justify dismissal without affording a fair opportunity to
cure the defect, especially when the authority has already assumed jurisdiction and proceeded on merits.

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In conclusion, while this case offers relief in a fact-specific scenario, it should not be read as a precedent for waiving pre-
deposit.

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 Whether an order passed under Section 73(9) of the CGST Act
without setting out relevant facts and reasons is liable to be set
aside?
Yes, the Hon’ble Allahabad High Court in case of M/s Hari Shanker Transport v. Commissioner of Commercial Tax
U.P. & Another, [Writ Tax No. 606 of 2025, decided on 11.03.2025, Citation: 2025 (4) TMI 619 - ALLAHABAD HIGH
COURT] quashed the impugned order and remanded the matter back for reasoned adjudication in accordance with law.
The Hon’ble Court noted that the petitioner challenged the order dated 27.04.2024 passed under Section 73(9) of the
CGST Act, raising a demand of ₹85.84 lakhs on the ground that the order lacked any reasoning and failed to meet the
statutory requirements under Section 75(6) of the Act. The proceedings had originated from a notice under Section 61,
followed by a SCN under Section 73 on 27.01.2024. The petitioner contended that it had not responded to either notice due
to unawareness, as the notices were uploaded on the department’s portal without personal communication. The final order,
however, merely referred to the issuance of notices and the absence of a reply and proceeded to raise demand without
recording any findings on facts or addressing the merits of the case. A rectification application filed under Section 161 was
also rejected. The Hon’ble Allahabad High Court, upon examining the order, held that it fell afoul of Section 75(6) of the Act
which mandates that the adjudicating authority must set out relevant facts and the basis of the decision in the order. The

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Hon’ble Court emphasized that even in cases where the taxpayer fails to reply, the authority is duty-bound to pass a
reasoned and self-contained order. The practice of merely referring to prior notices without discussing their content or

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independently recording a reasoned finding violates the principles of natural justice and statutory mandate. Accordingly, the

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Court quashed the impugned order and remanded the matter to the Deputy Commissioner, State Tax, Sector-3,
Sonbhadra, directing that an opportunity be granted to the petitioner to file a response to the SCN within four weeks,

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followed by a reasoned adjudication order in accordance with law.

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Authors comments
This judgment underscores a critical procedural safeguard embedded in Section 75(6) of the CGST Act—the requirement

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for every adjudication order to be self-contained, reasoned, and factually supported. In the author’s view, the order passed

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by the department in this case reflects a growing trend of mechanical adjudications based merely on non-response to
SCNs, without discharging the legal obligation of evaluating facts and independently applying judicial mind. Such orders do

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not meet the threshold of natural justice and are vulnerable to challenge. This case reiterates that “silence of the taxpayer”

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does not permit “silence in the order.” Every adjudication must speak for itself—through facts, reasons, and lawful
application of mind.

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Additionally, an important aspect that the taxpayer must have urged—but which the Court has not ruled upon—is the
limitation under Section 73(10) of the CGST Act. The SCN, although dated 27.01.2024, was admittedly not served or

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received by the taxpayer until after 31.01.2024. Since the period of limitation under Section 73(10) for issuance of SCN
expired on 31.01.2024 for FY 2018–19, any service of SCN after this date is legally untenable. Thus, even assuming the

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adjudicating authority had passed a reasoned order, the entire demand would still be barred by limitation and liable to be
quashed on this ground alone. This reinforces that timely and effective service of notice is not a mere formality—it is a
jurisdictional precondition.
It is also important to emphasize that taxpayers should approach writ remedies under Article 226 (or Article 32, where
applicable) only strategically and judiciously. If a court merely remands the matter for fresh adjudication without quashing
the underlying SCN, the relief obtained may be incomplete or illusory. Lastly, taxpayers must not overreact to ex-parte
orders. In most cases, where such orders are passed without considering the taxpayer’s reply or without granting a hearing,
they suffer from procedural illegality, as they often lack a factual and legal foundation. Therefore, rather than perceiving
every ex-parte order as disastrous, taxpayers should evaluate the best available legal remedy to challenge such orders
effectively.

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 Whether dismissal of an appeal without issuing notice for the
rescheduled hearing date violates principles of natural justice
and renders the appellate order unsustainable?

Yes, the Hon’ble Allahabad High Court in the case of Dilip Kumar Gupta v. Additional Commissioner Grade-2 (Appeal)
and Another [Writ Tax No. 1093 of 2023, decided on 05.05.2025 | Citation: 2025 (5) TMI 762 - ALLAHABAD HIGH
COURT] held that the dismissal of the appeal on a date other than the one communicated to the appellant, without any
prior intimation or notice, constitutes a violation of principles of natural justice and cannot be sustained. The petitioner,
engaged in jewellery and money lending business under the name M/s Jai Mata Di Jewellers, was subjected to GST
proceedings based on an Income Tax survey which found excess stock. An adjudication order was passed under Section
73 of the UPGST Act, which the petitioner challenged in appeal. The Appellate Authority had fixed 18.01.2022 for hearing,
but instead of passing the order on that day, it dismissed the appeal on 20.01.2022 without notifying the petitioner of the
new date.
The Court noted that even if the petitioner had remained absent on earlier dates, the authority was obliged to either decide
the matter on the scheduled date or issue notice of the new hearing date. Failure to do so amounted to an ex parte decision
without due process. Furthermore, the impugned appellate order lacked any proper reasoning or application of mind, in

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violation of Section 107(12) of the CGST Act which mandates a reasoned and speaking order. Relying on M/s Videocon
D2H Ltd. v. State of U.P (2016 U.P.T.C.- 237). and Assistant Commissioner, Commercial Tax Dept. v. Shukla &

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Brothers (2010 0 AIR(SCW) 3277), the Court quashed the impugned order and remanded the matter for fresh adjudication

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after providing due hearing to the petitioner within three months.

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Author’s Comments:

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This case is a textbook example of how procedural irregularities—even at the appellate stage—can vitiate the entire
adjudicatory process. The fundamental principles of natural justice, especially the right to be heard, cannot be reduced to a
formality. When an appellate authority fixes a specific date for hearing (18.01.2022 in this case), it must either pass the

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order on that date or issue a fresh notice if the matter is adjourned or decided on another day. The dismissal of the appeal

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on 20.01.2022 without notifying the petitioner of the revised date amounts to a serious procedural impropriety, justifying
interference by the High Court.

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However, in the author’s view, the issue goes beyond mere procedural lapse. The underlying jurisdictional flaw lies in the

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very issuance of a show cause notice under Section 73 of the UPGST Act despite the allegation involving fraudulent
suppression of excess stock. This inconsistency reveals a deeper legal infirmity—the doctrine of approbation and

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reprobation prohibits the State from taking contradictory stands. If fraud is indeed alleged, the only proper recourse is to
issue a notice under Section 74, not Section 73. Issuance of a SCN under Section 73 in cases of alleged fraud is inherently

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defective and undermines the legitimacy of the entire proceedings.
Strategically, the petitioner ought to have mounted a jurisdictional challenge by invoking writ jurisdiction—specifically

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questioning how an allegation involving fraud or suppression could be pursued under the non-fraud route of Section 73.
Raising this foundational objection could have secured substantive relief by vitiating the entire proceedings, rather than
merely securing a remand back to the same adjudicating authority for fresh consideration.

8
 Whether a writ petition is maintainable against a penalty order u/s
74 read with section 122(1) of the CGST Act when allegations involve
complex factual disputes and an appellate remedy under Section 107
is available?
No, the Hon’ble Delhi High Court in the case of Mukesh Kumar Garg v. Union of India & Ors. [W.P.(C) 5737/2025,
decided on 09.05.2025 | Citation: 2025 (5) TMI 922 - DELHI HIGH COURT] dismissed the writ petition holding that the
challenge to a penalty order under Section 74 of the CGST Act, involving complex allegations of fraudulent Input Tax Credit
(ITC), is not maintainable under Article 226 of the Constitution in view of the availability of an alternative appellate remedy.
The petitioner, Mr.Mukesh Kumar Garg, had challenged the penalty imposed under Section 122 on the ground that he was
not a taxable person and that his role was limited, if any, to a proprietary concern—M/s Bhagwati Trading Company—
distinct from the primary entities involved. The Department contended that Mr. Gargand his son, Mr. Anuj Garg,
orchestrated the creation of 28 firms to fraudulently avail ITC worth over ₹115 crores. The High Court noted that a detailed
order had been passed post-investigation and after affording the petitioner personal hearing. The Court further observed
that the challenge raised factual disputes, including questions about the petitioner’s involvement, which could only be
adjudicated in appeal and not in writ jurisdiction. Since the petitioner’s son had already filed an appeal under Section 107
against the same order, the Court held that entertaining the writ would encourage multiplicity and inconsistent findings.

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Emphasizing that writ jurisdiction is discretionary and reserved for exceptional cases involving jurisdictional errors or denial
of natural justice—which were absent here—the Court dismissed the petition with ₹50,000 costs, directing the petitioner to

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pursue the appellate route.

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Author’s Comments:

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In the author’s considered view, this judgment correctly reinforces the principle that writ jurisdiction under Article 226 is not

A
meant to be invoked in matters involving adjudication of disputed facts—particularly when a detailed adjudication order has
already been passed and a statutory appellate remedy under Section 107 of the CGST Act is available.
That said, from a strategic standpoint, an important jurisdictional flaw appears in this case. Section 122(1) applies only to

H
taxable persons, whereas Section 122(1A), inserted via the Finance Act, 2020, is specifically designed to cover non-taxable

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persons who are masterminds or beneficiaries of fraudulent transactions, even if they are not registered or liable to be
registered under GST.

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In the present case, if the petitioner was not a registered person or not shown to have directly availed or passed on ITC,

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then invoking Section 74 read with Section 122(1) to impose penalty lacks legal tenability. The correct charge, if at all
sustainable, ought to have been under Section 122(1A), which would require a separate process and evidentiary threshold.

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Further, the CBIC Circular No. 171/03/2022-GST dated 06.07.2022 makes it clear that penalty under Section 122(1) can
only be imposed upon taxable persons—that is, persons registered or liable to be registered under GST. If the department

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proceeded against a non-taxable person (as alleged by the petitioner) under Section 74 read with Section 122(1), the entire
proceedings may suffer from a jurisdictional error.

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Moreover, the imposition of costs in a case involving a challenge to jurisdiction appears excessive and unwarranted,
especially when the legal foundation of the proceedings itself is open to question.

9
 Whether a rectification application under Section 161 of the CGST
Act can be rejected without recording reasons or affording the
assessee an opportunity of hearing?

No, the Hon’ble Madras High Court in the case of Tvl. Kajah Enterprises (P) Ltd. v. The Assistant Commissioner
(Inspection) (ST-IU) [W.P. (MD) No. 11831 of 2025, decided on 08.05.2025 | Citation: 2025 (5) TMI 920 - MADRAS
HIGH COURT] held that such rejection is contrary to the provisions of Section 161 and violates principles of natural justice.
In this case, the petitioner filed a rectification application under Section 161 of the CGST Act in respect of an assessment
order dated 06.01.2025 for FY 2017–18. The application was dismissed by the proper officer without assigning any reasons
as to why the rectification was not maintainable or how there was no apparent error on the face of the record. The petitioner
contended that rejection without consideration of grounds or affording any personal hearing was arbitrary and contrary to
law. The department defended the action by stating that personal hearing was not mandatory where the rectification was
initiated by the assessee and that no reasons were required if the authority did not find any error apparent.
The Hon’ble Madras High Court disagreed with the department’s contention and observed that the 3rd Proviso to Section
161 mandates an opportunity of hearing where a rectification order adversely affects the assessee. The Court held that
even when the rectification is sought by the assessee and is being rejected, the rejection must be reasoned and cannot be

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mechanical. Failure to indicate why no apparent error exists renders the order unsustainable. Accordingly, the impugned
rectification order dated 28.03.2025 was quashed, and the respondent was directed to reconsider the rectification

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application afresh after affording the petitioner a personal hearing and pass a reasoned order in accordance with law.

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Author’s Comment:

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It is a well-settled principle that once a rectification application is filed by the assessee pointing out an “error apparent on

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record,” the adjudicating authority is obligated to examine the same in a reasoned manner. The rejection of such an
application without assigning reasons or affording an opportunity of hearing amounts to an arbitrary exercise of power and
is contrary to the letter and spirit of Section 161, particularly the third proviso which mandates that no rectification “shall be

H
made unless the authority concerned has given notice to the affected person.”

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In the author’s view, the rejection of a rectification application is not merely an administrative act—it is a quasi-judicial
decision that affects the rights of the taxpayer. Therefore, it must meet the twin tests of (a) speaking order and (b)

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opportunity of hearing. A mechanical or summary dismissal deprives the taxpayer not only of a fair process but may also

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compromise the remedy of appeal due to the overlap of timelines. Since the rectified order substitutes the original order, all
downstream legal remedies—including appeal—would relate to the rectified version, and delays caused due to non-

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speaking rejections could lead to unintended hardship.
Moreover, as rightly noted by the Hon’ble Delhi High Court in HVR Solar Pvt. Ltd. v. STO, 2025 (4) TMI 730 - DELHI HIGH

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COURT 08/04/2025, rejection of a rectification application cannot be sustained unless the assessee has been given a fair
chance to be heard. The tax administration must recognize that rectification proceedings are not adversarial but curative in

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nature, intended to correct obvious errors. Denial of hearing in such matters reflects a mind-set of expediency over equity.

10
 Whether parallel proceedings by CGST and SGST departments on
the same subject matter are legally sustainable under the GST
law?

No, the Hon’ble Delhi High Court in the case of M/s Sun Automation Limited v. Sales Tax Officer Class II/AVATO &
Ors. [W.P.(C) 5734/2025, decided on 01.05.2025 | Citation: 2025 (5) TMI 915 - DELHI HIGH COURT] held that once
proceedings have been initiated by one authority—either CGST or SGST—on a particular subject matter, another authority
cannot initiate fresh proceedings on the same issue, in light of Section 6(2)(b) of the CGST Act. In the present case, the
petitioner challenged the SCN dated 27.11.2024 and the resultant order dated 27.02.2025 issued by the Delhi SGST
authorities raising a tax and penalty demand of ₹157.66 crores, arguing that the CGST Department had already adjudicated
the matter involving the same transactions and issued a final order dated 30.08.2024. The petitioner had also filed an
appeal before the CGST Appellate Authority, which resulted in a reasoned appellate order on 03.04.2025. The Court
examined the overlapping demands raised by both authorities against the petitioner based on the same set of transactions
involving alleged bogus suppliers and incorrect ITC claims. Referring to its earlier decision in Amit Gupta v. Union of India
[2023 (10) TMI 143 - DELHI HIGH COURT], the Court reiterated that Section 6(2)(b) of the CGST Act aims to avoid parallel
proceedings by central and state tax officers on the same subject matter. The object of the provision is to prevent multiple

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layers of adjudication and harassment to taxpayers. Consequently, the Hon’ble Court set aside the impugned SGST order
dated 27.02.2025 and directed the SGST authorities to reconsider the matter afresh after taking into account the CGST

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Appellate Order dated 03.04.2025 and granting a personal hearing to the petitioner.

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Author’s Comments:

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Section 6(2)(b) is intended to eliminate duplicative adjudication and avoid placing undue procedural and financial burden on

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the taxpayer. However, in the author’s considered view, the applicability of Section 6(2)(b) must be assessed with precision.
The provision bars initiation of fresh proceedings by one authority only when proceedings on the “same subject matter”
have already been initiated by the other authority. Therefore:

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1. "Same Subject Matter" Test:

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The restriction under Section 6(2)(b) applies only where the facts, cause of action, and period under dispute are identical,
and the nature of contravention or violation remains common. It is not a blanket bar on separate proceedings by CGST and

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SGST authorities in general. For instance, while ITC may be disallowed by both wings, if the grounds, suppliers, or

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transactional timelines differ, Section 6(2)(b) may not apply.
2. Cross-Empowerment Limitations:

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Cross-empowerment under Section 6 is specific and limited, primarily envisioned for certain enforcement actions like
inspection, search, and seizure under Section 67.

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This ruling reaffirms the principle that parallel proceedings by both CGST and SGST authorities on the same subject matter

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are impermissible, as per Section 6(2)(b) of the CGST Act.

11
 Whether recovery proceedings can be initiated under Section
75(12) for tax already declared and included in returns filed under
Section 39 of the CGST Act?
No, the Hon’ble Calcutta High Court in the case of Kuddus Ali Proprietor of M/s Kuddus Ali Construction vs. Assistant
Commissioner of Central Tax, Malda CGST & CX Division & Ors. [WPA 6004 of 2025, decided on 28.04.2025
|Citation: 2025 (5) TMI 914 - CALCUTTA HIGH COURT] held that invoking Section 75(12) of the CGST Act for initiating
recovery where the tax has already been included in the returns under Section 39 is impermissible. In this case, the
petitioner had filed returns for FY 2020–21, which were later scrutinized through ASMT-10 dated 20.09.2024, identifying
discrepancies and alleged short payment of ₹8,09,248. The petitioner admitted delay in return filing and sought to pay
interest in instalments. However, without issuing any proper show cause notice under Sections 73/74, the department
passed an order dated 20.12.2024, followed by a recovery notice in DRC-07 dated 06.01.2025. The petitioner challenged
this, arguing that recovery under Section 75(12) was invalid since the tax in question was already declared under Section
39. The department argued that since the liability was admitted and delayed, the recovery could be made without
adjudication under Section 75(12). The Court rejected this view, relying on the explanation to Section 75(12), which clarifies
that only those self-assessed taxes not included in returns filed under Section 39 fall under its purview. Since the tax was

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already declared under Section 39, the Court held that proper proceedings under Section 73 or 74 were mandatory.
Consequently, the impugned order and DRC-07 notice were quashed, treating the order dated 20.12.2024 as a show cause

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notice to which the petitioner may reply within three weeks. The department was directed to adjudicate afresh in

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accordance with law.

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Author’s Comments:

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Section 75(12) of the CGST Act is not a carte blanche for recovery. The provision is explicitly applicable only in cases
where tax liability is self-assessed but not discharged, and such tax is reflected in the return filed under Section 39 (i.e.,
GSTR-3B). The Explanation to Section 75(12), introduced via the Finance Act, 2021, further narrows this ambit by clarifying

H
that only tax that has not been paid but is declared in GSTR-1 (but not in GSTR-3B) can be recovered without issuing an

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SCN. Where tax is already included in GSTR-3B, adjudication under Sections 73 or 74 becomes mandatory.
This decision not only exposes the jurisdictional overreach by the tax authorities but also opens up a deeper question: Can

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a demand under Section 73 or 74 be raised solely for interest or late fees in the absence of a tax demand? The plain

I T
reading of Section 73(1) suggests otherwise—it specifically provides for recovery of: (a) Tax not paid or short paid, (b)
Erroneously refunded tax, (c) ITC wrongly availed or utilized. Thus, interest or penalty is consequential and not an

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independent cause of action under Section 73. A standalone SCN demanding only interest, without an underlying tax
liability being disputed or assessed, is not tenable in law.

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Moreover, recovery of late fees under Section 47 without express proceedings or quasi-judicial determination is equally
misplaced. Section 47 levies late fee, but does not provide a recovery mechanism or trigger adjudication under Section

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73/74. Invoking these sections to recover late fee or interest amounts to a gross misapplication of law and conflates
recovery with adjudication.

12
 Whether rejection of appeal due to marginal delay is justified
when the Appellate Tribunal is non-functional and the petitioner
has already deposited the required pre-deposit?

No. The Hon’ble Calcutta High Court in the case of Rohit Kedia v. Assistant Commissioner of State Tax, Lalbazar &
Others [WPA 1461 of 2025, decided on 07.04.2025 | Citation: 2025 (5) TMI 904 - CALCUTTA HIGH COURT] set aside
the appellate rejection order and remanded the matter for adjudication on merits. The petitioner challenged the order
passed under Section 107 of the CGST/WBGST Act, whereby the appellate authority had dismissed the appeal solely on
the ground of limitation, noting a delay of 47 days. The original adjudication order under Section 73 dated 28.03.2024 had
gone unchallenged at first instance due to the petitioner’s limited technological access and personal exigencies. The Court
noted that although the petitioner had an appellate remedy, the GST Appellate Tribunal was not constituted, leaving the
petitioner with no efficacious remedy. Taking note of the marginal nature of the delay and the fact that the pre-deposit of
₹58,903/- had already been paid, the Court observed that technical dismissal of the appeal without merit-based
adjudication would be unjust. It accordingly quashed the order dated 03.01.2025 and remitted the matter back to the
appellate authority for disposal on merits within six weeks. Further, the Court directed that if the petitioner filed an
application seeking release of the attached bank account, the appellate authority must decide the same on priority within

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one week.

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Author’s Comments:

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If an appeal is filed beyond the statutory time frame permitted under Section
107(4) of the CGST Act, 2017 — which allows for a three-month period with an additional one-month condonable delay —

R
the Appellate Authority is legally bound to reject it as time-barred. The statute clearly restricts the authority’s

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power to condone delays beyond this prescribed period, leaving no scope for discretionary extensions, regardless of how
justifiable or compelling the reasons may be. This strict limitation reflects the legislative intent to ensure procedural
certainty and finality in tax matters.

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The Hon'ble Supreme Court, in Singh Enterprises v CCE (2008, 221 ELT 163), underscored that when a law explicitly

S
defines a limitation period, allowing appeals beyond this timeframe — no matter how valid the reason — would override the
legislative mandate. Thus, once the statutory period expires, the Appellate Authority is barred from exercising any

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discretion to condone further delays.

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Furthermore, the Hon'ble Allahabad High Court, in Yadav Steels v Additional Commissioner & Anr. (Writ Tax No. 975
of 2023, dated February 15, 2024, (2) TMI 1069 - ALLAHABAD HIGH COURT) and Abhishek Trading Corporation v

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Commissioner (Appeals) & Anr. (Writ Tax No. 1394 of 2023, dated January 19, 2024, (2024:AHC:9563)), reaffirmed
that the CGST Act, 2017 is a self-contained code, which does not permit the application of Section 5 of the Limitation Act,

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1963 for extending appeal deadlines. As a result, once the outer limit of four months’ lapses, the appellate mechanism
ceases to be available, reinforcing the principle that tax litigation must adhere to strict procedural timelines for efficiency

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and certainty in tax administration.

13
 Whether denial of opportunity to reply due to non-service of
SCN uploaded only under 'Additional Notices and Orders' tab
can vitiate the assessment proceedings u/s 74?
Yes. The Hon’ble Allahabad High Court in the case of M/s Saini Zarda Store v. State of U.P. and Others [Writ Tax No.
1828 of 2025 | Date of Decision: 01.05.2025 | Citation: 2025 (5) TMI 991 - ALLAHABAD HIGH COURT] set aside the ex
parte assessment order and permitted the petitioner to file objections afresh. The Court observed that the order passed
under Section 74 of the CGST Act, fastening liability for tax, interest, and penalty, was rendered ex parte due to non-service
of the Show Cause Notice. The SCN was uploaded only under the 'Additional Notices and Orders' tab of the GST portal
and was not served by any other means. The petitioner came to know of the adverse order only in March 2024, well after its
issuance in October 2021, and upon realizing this, filed an appeal which was dismissed as time-barred. The Court held that
merely uploading the SCN in a lesser-known section of the portal does not fulfil the mandatory requirement of service of
notice. Relying on decisions in Ola Fleet Technologies Pvt. Ltd.(2024 (7) TMI 1543 - ALLAHABAD HIGH COURT),
Shyam Roshan Transport (2024 (10) TMI 1388 - ALLAHABAD HIGH COURT), Atul Agrawal (2024 (10) TMI 1622 -
ALLAHABAD HIGH COURT), and Sai Dham Residency (2024 (8) TMI 1574 - ALLAHABAD HIGH COURT), the Court
reiterated that assessment orders passed without effective service of notice and without granting personal hearing violate

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the principles of natural justice. Accordingly, the impugned assessment order was directed to be treated as a notice under
Section 74, allowing the petitioner to file a detailed reply and documents within eight weeks. The Assessing Officer was

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further directed to decide the matter afresh after granting a personal hearing.

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Author’s Comments:

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Although Section 169 of the CGST Act, 2017 specifies 14 different ways/modes of serving any decision, order, summons,

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notice, or other communication under the Act, care must be taken by the authorities not to simply pick and choose any
option, rather the best possible option must be chosen by which it is mostly likely to reach the intended noticee. The notice
or any other communication cannot be termed to be served until it has reached the intended noticee.

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In the Author’s considered opinion, it is immaterial whether the notice was uploaded on the "View Notices and Orders" tab

S
or the "View Additional Notices and Orders" tab. The only aspect to consider is whether or not the intended notice was
served to the intended noticee. If not, then the service of SCN must have been disputed and must have allowed the

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revenue to discharge their burden regarding the service of SCN. Without discharging this elementary burden, ‘due process’

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under the law is abused and SCN deserves quietus in judicial review.
A Similar decision has been rendered in case of National Gas Services v State of U.P. [2025] 170 taxmann.com 392

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(Allahabad) [20-12-2024] wherein it was held that Show Cause Notice uploaded under the category of “View Additional
Notices and Order” instead of “View Notices and Orders” is not sufficient communication of SCN to the petitioner.

CA

14
Whether the taxpayer can be granted relief to pay tax dues in forty-
eight monthly instalments under Section 80 of the CGST Act?

No, the Hon’ble Gauhati High Court in the case of M/s Jitu Enterprises and Sounds Service v. Union of India & Ors.
[W.P.(C) No. 1258 of 2025, decided on 06.05.2025, Citation: 2025 (5) TMI 1262 - GAUHATI HIGH COURT] held that a
taxpayer cannot seek direction from the court or the department to permit payment in forty-eight monthly instalments when
the statute itself restricts such relief to a maximum of twenty-four monthly instalments under Section 80 of the CGST Act.
The petitioner, a registered partnership firm engaged in housekeeping services, had been served notices seeking recovery
of late fees, interest, and ineligible ITC for delayed filing of returns from FY 2018–19 to FY 2021–22. Upon issuance of
DRC-01A intimating liability of ₹1.05 crore (majorly towards interest under Section 50), the petitioner sought permission to
pay the same in 48 equal monthly instalments, citing financial hardship. However, the department rejected the request
citing that the amount demanded pertained to self-assessed liability declared in returns and therefore did not qualify for
instalments under Section 80. The High Court upheld the department’s view, emphasizing that Section 80 permits a
maximum of twenty-four instalments, and does not apply to self-assessed tax liabilities as reflected in returns. The Court
clarified that no writ of mandamus can compel authorities to act in violation of a statutory prescription. However, it granted

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liberty to the petitioner to file a fresh application seeking payment in twenty-four monthly instalments, which the
Commissioner shall decide expeditiously after granting a hearing.

Author’s Comments:

O R
This decision correctly affirms the limited statutory discretion available to tax authorities under Section 80 of the CGST Act.

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The section categorically permits grant of instalments only up to 24 monthly tranches, and that too, not for self-assessed

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tax liabilities disclosed in GSTR-3B. Once a taxpayer declares tax or interest liability in their return, it becomes an
undisputed, self-admitted liability—leaving no scope for instalment benefit under Section 80.
Further, Rule 158 read with FORM GST DRC-20 supports this view, emphasizing that instalment relief is a discretionary

H
remedy meant for amounts determined through adjudication, not self-imposed liabilities.

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From a strategic standpoint, the petitioner perhaps missed a more effective route—challenging the very basis of recovery
proceedings. The liability in this case was primarily towards interest, and the demand was initiated via DRC-01A. However,

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a standalone recovery of interest without underlying tax shortfall is legally untenable under Section 73(1)/74(1), which only

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covers tax, refund, or credit. Interest and penalty are consequential and cannot be demanded in isolation unless linked to
such tax liability. Section 50 interest, although automatic in theory, still needs an adjudicatory basis if not voluntarily paid.

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15
 Can an assessment order under Section 62 of the CGST Act be
sustained in the absence of prior notice under Section 46 and
without recording any reasons?
No, In the case of M/s Tewari Construction and Gen Suppliers Lko (Pramod Tiwari Sole Proprietor) v. State of U.P. &
Others [2025 (5) TMI 1214 – ALLAHABAD HIGH COURT], the petitioner challenged the assessment order passed under
Section 62 of the CGST Act and the appellate order that dismissed the appeal on limitation grounds. The petitioner
contended that the assessment order was passed without issuance or service of any notice under Section 46 and was also
devoid of any reasoning or reference to the material relied upon. The Hon’ble Allahabad High Court held that issuance of
notice under Section 46 is a mandatory precondition for invoking Section 62, and since the department failed to show that
such a notice was served, the foundational requirement of jurisdiction was missing. Further, the assessment order was
found to be unreasoned and cryptic, lacking discussion of any data or material, thus violating principles of natural justice.
Consequently, both the assessment and appellate orders were quashed, and the matter was remanded for fresh
consideration after complying with Section 46 and granting the petitioner a proper hearing.

Author’s Comments:

A
The judgment rightly underscores that issuance of notice under Section 46 is the jurisdictional foundation for invoking
Section 62 of the CGST Act. Section 62 permits the department to conduct a best judgment assessment only when the

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registered person fails to file returns even after being served a notice under Section 46. Therefore, non-issuance or non-

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service of such notice is a fatal procedural lapse that vitiates the assessment ab initio.
Further, even when the best judgment assessment under Section 62 is permitted to be done without a hearing, it is not a

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license to issue mechanical or unreasoned orders. The requirement of recording reasons—albeit briefly—and referring to

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material available on record is implicit under Rule 100. A cryptic order without any discussion of facts, data, or estimation
basis fails the test of natural justice, especially when it leads to coercive consequences such as demand or recovery.
In the author’s view, Section 62 is a time-sensitive tool, and the legislature has provided a natural check on its misuse by

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inserting the deemed withdrawal clause—if a valid return is furnished within 60 days of the assessment order, the order

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stands automatically withdrawn. This balances revenue interests with the taxpayer’s right to compliance.

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16
 Whether the department can raise a demand u/s 129 after
physical verification of goods (MOV-04) found no discrepancies,
by subsequently taking a contrary stand without new evidence?
No, the Hon'ble Allahabad High Court in case of M/s Maa Kamakhya Trader v. Additional Commissioner Grade 2 &
Another, (Writ Tax No. 1386 of 2023, decided on 28.04.2025 | Citation: 2025 (5) TMI 145 - ALLAHABAD HIGH
COURT) quashed the impugned detention and penalty order and directed refund of the amount recovered during the
proceedings within three weeks. The Hon'ble Court noted that the petitioner challenged the detention and penalty order
issued under Section 129 of the CGST/UPGST Act in respect of a consignment being transported from Guwahati to Delhi.
The goods were intercepted in Amroha, U.P., and despite being accompanied by valid tax invoices, e-invoices, e-way bills,
and a bilty (goods receipt), a demand was raised alleging that the goods were different from what was declared in the
documents. However, the physical verification report in Form MOV-04, prepared at the time of inspection, clearly recorded
that there was no discrepancy in the description, quantity, or classification of the goods. The department subsequently took
a contrary stand and initiated proceedings based on alleged mismatches attributed to HSN code entries, claiming the error
was system-generated. The Hon’ble Allahabad High Court categorically held that once the MOV-04 report had confirmed
that there was no discrepancy, the department could not later reverse its stand without bringing on record any fresh or

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cogent evidence. The Court rejected the state's justification that the error was due to auto-population, noting that the fields
in MOV-04 are manually filled, and such data entries carry legal significance. Relying on its earlier ruling in Jitendra

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Kumar Versus State of U.P. and Another - 2024 (1) TMI 73 - ALLAHABAD HIGH COURT, the Hon’ble Court reiterated

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that departmental authorities cannot shift their position arbitrarily or introduce new grounds post facto. Such action was held
to be in violation of the principles of fairness, transparency, and natural justice. Accordingly, the Hon’ble Court quashed the

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impugned detention and penalty order and directed refund of the amount recovered during the proceedings within three

A
weeks.

Author’s Comments:

H
This judgment strikes at the heart of a systemic issue in GST enforcement—the tendency of intercepting officers to expand

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the scope of their limited powers under the garb of roadside verification. In the author’s considered view, the power granted
under Section 68 read with Rule 138A of the CGST Rules is narrowly circumscribed: it allows interception and verification

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of documents during transit, and nothing more. When Form MOV-04, the statutory format for physical verification, records

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“no discrepancy,” and all required documents such as e-invoice, e-way bill, tax invoice, and bilty are found to be in order,
any further penal action under Section 129 amounts to an ultra vires exercise of power.

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This case reveals how intercepting officers—perhaps carrying forward habits from the pre-GST tax regime—sometimes
take it upon themselves to reinterpret classification, quantity, or intent behind transportation, despite the MOV-04 findings

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being clear. Such conduct transforms a compliance verification exercise into a quasi-adjudication proceeding, which the law
never authorizes at the stage of roadside interception. The law is clear: if Rule 138A is complied with, and MOV-04 records

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no discrepancies, the jurisdiction under Section 129 ends there.

17
 Whether cancellation of GST registration without disclosing the
name of the proper officer in the SCN and without affording
personal hearing violates is liable to be quashed despite the
appeal being dismissed as time-barred?
Yes, The Hon’ble Allahabad High Court in the case of M/s One Place Infrastructure v. State of U.P. and Others, [Writ
Tax No. 1865 of 2024, decided on 02.05.2025 | Citation: 2025 (5) TMI 386 - ALLAHABAD HIGH COURT] quashed the
cancellation and appellate orders and remanded the matter to the proper officer to issue a fresh SCN with reasons and
pass a reasoned order after granting an opportunity of reply and personal hearing. The petitioner, a private limited company
engaged in government contractual work, had challenged the cancellation of its GST registration issued on the ground of
non-filing of returns. The SCN in Form GST REG-17 dated 06.09.2023 did not mention the name or designation of the
proper officer and failed to disclose before whom the petitioner was to appear, resulting in an ex parte cancellation order on
02.10.2023. The petitioner came to know of the cancellation only in January 2024 and filed an appeal, which was dismissed
as time-barred. The Hon’ble Court held that the original SCN was defective and the cancellation order was passed without
application of mind and in violation of the principles of natural justice. Relying on its earlier rulings in M/s Surya Associates
Versus Union of India and 2 Others - 2024 (10) TMI 1317 -ALLAHABAD HIGH COURT and the Supreme Court’s
decision in Whirlpool Corporation Versus Registrar of Trade Marks, Mumbai & Ors. - 1998 (10) TMI510 - Supreme

A
Court, the Court held that even where the appeal is time-barred, a patently illegal quasi-judicial order can still be
challenged under writ jurisdiction, particularly where it affects fundamental rights under Article 19(1)(g) and lacks

R
compliance with Article 14. The Hon’ble Court held in view of the aforesaid facts and circumstances of the case, the

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impugned orders cannot be sustained in the eyes of law and same are hereby quashed and petition allowed. The matter is
remanded to the adjudicating authority, who shall issue fresh notice to the petitioner mentioning the reason of the proposed

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cancellation of registration within a period of one week from the date of production of certified copy of this order. The

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petitioner is directed to submit its reply within 21 days after receipt of the notice and after submitting the reply within time,
the adjudicating authority shall pass reasoned and speaking order, within a period of two weeks thereafter, after affording
due opportunity of hearing to the petitioner.

Author’s Comments:

S H
Section 29(2)(c) of the CGST Act, read with Rule 21(h) and 21(i) of the CGST Rules, empowers the proper officer to cancel

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GST registration where the registered person has failed to furnish returns for a continuous period of six months or more.

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This statutory power has been judicially upheld by the Hon’ble Kerala High Court in Sanscorp India Pvt.Ltd. v. The
Assistant Commissioner & Ors. [WP(C) No. 24904 of 2023, decided on 14.09.2023, 2023 (9) TMI 1002 - KERALA

R
HIGH COURT], wherein the Court recognized that retrospective cancellation of registration is permissible in cases of
prolonged non-compliance with return filing requirements.

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However, while the statutory ground for cancellation may be valid, the manner in which such cancellation is effected must
strictly adhere to procedural and legal standards. In the present case, the issue does not pertain to the merits of non-filing,

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but rather to the procedural defect of an unsigned and vague Show Cause Notice. When the SCN fails to mention the name
or designation of the proper officer and does not indicate before whom the taxpayer must appear, it cannot be treated as a
valid notice in the eyes of law. The purpose of a SCN is not just to inform the taxpayer of the proposed action, but to enable
them to effectively respond and be heard by a legally authorized officer.
This position finds strong support in the decision of the Hon’ble Division Bench in SRK Enterprises v. Assistant
Commissioner [[2024] 102 GST 450], which held that an unsigned order is a nullity and cannot be saved by Section 160
of the CGST Act. The Court unequivocally ruled that the absence of a signature is not a mere technical defect—it is a
jurisdictional flaw that goes to the root of the matter, rendering the order unenforceable.
Further, the Hon’ble High Court has rightly rejected the notion that dismissal of an appeal on the ground of limitation
forecloses the writ remedy where the foundational order is legally defective. It also underscores a significant legal principle
—the doctrine of merger does not apply when the appellate authority refuses to entertain the matter on limitation grounds
without addressing the merits.

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Whether a service provider can be treated as an “intermediary” under
Section 2(13) read with Section 13(8) of the IGST Act when support
services are provided on a principal-to-principal basis to a foreign
parent company for facilitating student placements abroad?
No, The Hon’ble Bombay High Court in the case of IDP Education India Pvt. Ltd. v. Union of India & Ors., [Writ Petition
No. 5144 of 2022 with Writ Petition No. 2774 of 2024, decided on 05.05.2025 | Citation: 2025 (5) TMI 729 - BOMBAY
HIGH COURT] held that the petitioner is not an “intermediary” within the meaning of Section 2(13) of the IGST Act and is
entitled to refund of IGST paid on services rendered to its parent company, IDP Australia. The petitioner, a subsidiary of
IDP Education Ltd. Australia, provided support services for facilitating placement of Indian students in foreign universities,
pursuant to a bipartite Support Services Agreement with its parent company. It received a share of revenue from IDP
Australia but had no contractual nexus with the foreign universities or students. The department denied refund of IGST on
the ground that the petitioner acted as an “intermediary” and thus did not qualify for export of services. The Hon’ble Court,
however, noted that the issue had already been decided in favour of the petitioner by the CESTAT in its final order dated
28.10.2021 covering the service tax period, which had attained finality. Rejecting the department’s attempt to distinguish
the earlier order on the basis of a renewed agreement, the Court held that the nature and scope of services remained the
same. It further relied on CBIC Circular No. 159/15/2021-GST dated 20.09.2021 which clarified that the definition of

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“intermediary” under GST is materially the same as under the service tax regime. The Hon’ble Court held that there was no
reason for the department to deviate from the settled position and directed that the petitioner’s refund claims for the

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relevant periods be processed with applicable interest within four weeks. The matter was thus remanded to the adjudicating

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authority for compliance.

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Author’s Comments:

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The classification of “intermediary services” under GST continues to be one of the most litigated and conceptually
misunderstood aspects of India’s indirect tax regime—particularly in cross-border service scenarios. In the author’s
considered opinion, the definition under Section 2(13) of the IGST Act is clear but narrowly tailored: it applies only to those

H
who arrange or facilitate a supply between two or more parties, without supplying such goods or services on their own

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account. This exclusionary clause is fundamental—it marks the boundary between a facilitator (intermediary) and a
principal service provider.

E
Judgments such as M/s Ernst and Young Limited v. Additional Commissioner ( 2023 (5) TMI 73 - DELHI HIGH

I T
COURT) and IDP Education India Pvt. Ltd. v. Union of India (2025 (5) TMI 729 - BOMBAY HIGH COURT) reaffirm this
distinction. Both cases recognized that where services are supplied directly to a foreign recipient under a principal-to-

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principal agreement, the supplier cannot be labelled an intermediary—even if their services ultimately enable or support a
third-party outcome. These rulings have provided much-needed clarity and exposed repeated departmental misapplications

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of the law, often resulting in the wrongful denial of export status and refund claims.
The situation, however, is further complicated by the constitutional debate surrounding Section 13(8)(b) of the IGST Act,

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which deems the place of supply for intermediary services to be the location of the supplier—thus domesticating a
transaction that would otherwise qualify as an export. While the Bombay High Court’s decision in Dharmendra M. Jani
upheld the provision’s validity through the Chief Justice’s tie-breaking opinion, concerns persist regarding the impact of this
deeming fiction on India's global competitiveness, especially for Indian service providers acting as facilitators for
international clients. The Gujarat High Court’s ruling in Material Recycling Association of India, 2020 (8) TMI 11 -
GUJARAT HIGH COURT further supports this constitutional validity, emphasizing legislative competence under Articles
246A and 269A.
Where the Indian service provider has no privity with the end recipient of the main service or goods and is remunerated
independently by the foreign client, the transaction must be assessed under Section 13(2)—not 13(8)(b)—if the service is
rendered on own account. In this context, Circular No. 159/15/2021-GST and Circular No. 232/26/2024-GST are significant.
The latter correctly recognizes that data hosting services provided to overseas cloud providers are not intermediary
services and should be treated as exports. This clarification strengthens the jurisprudence favouring direct service
providers, even where the end beneficiary lies beyond the immediate contractual framework.

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 Whether a writ petition is maintainable against an adjudication
order under Section 74 of the CGST Act when the reply to the SCN
was not considered?

No, The Hon’ble Delhi High Court in the case of KMG Industrial Traders Pvt. Ltd. & Anr. v. The Additional
Commissioner Adjudication, CGST, [W.P.(C) 5703/2025, decided on 01.05.2025 | Citation: 2025 (5) TMI 632 - DELHI
HIGH COURT] disposed of the writ petition with liberty to the petitioner to file a statutory appeal under Section 107 of the
CGST Act, 2017. The petitioner had challenged the adjudication order dated 27.01.2025, whereby a demand of ₹27.15
crores was raised on allegations of fake Input Tax Credit availed through five identified supplier entities. The petitioner
argued that its detailed reply dated 15.04.2024 to the show cause notice under Section 74 was not considered, and that
personal hearing notices were not duly served. The Department contended that the personal hearing was in fact availed on
one occasion and the adjudication was proper. The Hon’ble Court observed that since the petitioner had already deposited
₹2.5 crores with the Department—forming a substantial portion of the mandatory 10% pre-deposit for filing an appeal—it
would be appropriate for the petitioner to pursue the appellate remedy. The Hon’ble Court directed that if the balance pre-
deposit is made and the appeal filed within 30 days, the appellate authority shall consider the reply dated 15.04.2024 and
all supporting documents, and adjudicate the appeal on merits without dismissing it on limitation grounds. Accordingly, the

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petition was disposed of, keeping all rights and remedies open.

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Authors Comments

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In the author’s considered view, a writ petition before the High Court is not a substitute for adjudication or appeal, and its
maintainability hinges on clearly demonstrable circumstances where the injustice is self-evident and the statutory remedies

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are either unavailable or wholly ineffective to prevent such injustice.

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A taxpayer seeking writ relief must demonstrate two essential conditions:
1. That the notice or order causes an immediate and manifest injustice which, if allowed to proceed, would irreparably

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prejudice the taxpayer; and

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2. That such injustice cannot be adequately addressed through the statutory process of adjudication or appeal.

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Merely disagreeing with the findings of the Proper Officer or facing a high tax demand is not sufficient. A writ petition must

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be grounded in procedural illegality, jurisdictional error, or misuse of legal authority that is apparent on the face of the
record.

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The High Court is a Court of Equity—it steps in to prevent miscarriage of justice where procedural safeguards under the
statute have failed. However, it does not engage in fact-based adjudication, nor does it serve as a parallel appellate forum.

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The relief sought must flow from a demonstrated abuse or misapplication of legal process, not from dissatisfaction with the
merits of the order. Writ jurisdiction must be reserved for rare and compelling cases—not as a default recourse against

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every adverse notice or order.

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 Whether a writ petition challenging a SCN can be entertained
despite the availability of an alternative statutory remedy under
Section 107 of the CGST Act?
No, the Hon’ble Himachal Pradesh High Court in the case of M/s Himalaya Wellness Company v. Union of India & Ors.,
[CWP No. 9239 of 2024, decided on 08.05.2025 | Citation: 2025 (5) TMI 795 - HIMACHAL PRADESH HIGH COURT],
dismissed the writ petition holding that mere issuance of a SCN under Section 74 of the CGST Act—without breach of
natural justice or jurisdictional error—cannot be challenged under Article 226 of the Constitution. The petitioner, a
registered supplier under GST, received a detailed SCN alleging inadmissible input tax credit (ITC) of ₹4.36 crores and
minor discrepancies in tax payment. Aggrieved by the notice, the petitioner invoked writ jurisdiction seeking quashing of the
SCN and declaration of its eligibility to claim ITC for the period 2017–2022. The department raised preliminary objections
regarding maintainability of the writ on grounds of an effective alternative remedy being available. The Hon’ble Court, after
examining the facts and referring to decisions in Radha Krishan Industries, Assistant Commissioner v. Commercial
Steel Ltd (2021 (6) SCC 771), and State of Punjab v. Shiv Enterprises( 2023 (1) TMI 842 - SUPREME COURT),
reiterated that a writ petition is not maintainable against a show cause notice unless exceptional circumstances—such as
violation of fundamental rights, natural justice, or lack of jurisdiction—are established. Since the petitioner failed to

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demonstrate any such exceptions, the High Court refused to intervene at the SCN stage and dismissed the petition as
premature, leaving the petitioner free to respond to the notice and pursue the statutory appeal process if required.

Author’s Comments:
To approach the High Court, it must be demonstrated that the notice:

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(a) warrants the court's intervention to prevent the progression of injustice, and

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(b) involves a remedy that cannot be effectively pursued through adjudication or appeal.
Taxpayers should recognize that High Courts, as Courts of Equity, have the discretion to entertain petitions seeking relief
from injustice caused by the notice or order, provided that the statutory remedies of adjudication and appeal are not

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sufficiently ‘efficacious’ to prevent such injustice. The core issue in the petition must be self-evident and not require

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extensive investigation. The injustice must be apparent on the face of the record to establish the petition’s ‘maintainability,’
demonstrating that no other forum has the authority to grant the relief necessary to rectify the injustice highlighted. A

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petition before the High Court cannot call for adjudication. Instead, it must seek the Court’s intervention on the ‘grounds

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urged’ to issue appropriate orders preventing a miscarriage of justice resulting from the misapplication, misinterpretation, or
misuse of legal processes.

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Similar stance by taken by the Hon’ble Madras High Court in case of P. Murugan S/o Pazhani Proprietor of Aarupadai
and Co. vs. The Commercial Tax Officer & Ors. (W.P. Nos. 10525 & 10531 of 2025 | Decision Date: 09 April

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2025|
Citation- 2025 (4) TMI 1013 - MADRAS HIGH COURT) where it was held that the writ petition challenging the show cause
notice itself was premature.

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 Whether GST is leviable on assignment of leasehold rights in an
industrial plot allotted by GIDC to a third party?
No, the Hon’ble Gujarat High Court in the case of M/s Shreeji Enterprise (Previously Known As M/s J.G. Pharma
Chem) v. Union of India & Ors., [R/Special Civil Application No. 3198 of 2025, decided on 27.03.2025 | Citation: 2025
(5) TMI 723 - GUJARAT HIGH COURT] quashed the Show Cause Notice issued for demanding GST on assignment of
leasehold rights in an industrial plot. The petitioner had transferred the leasehold rights in 2008 to M/s Karunasagar
Chemical Industries for ₹3.75 lakhs, and although the agreement was executed in 2008, the transfer was formally
registered in GIDC records only in October 2017. Based on the GIDC's records, the department issued a SCN dated
18.07.2024 demanding GST of ₹2,78,928/- on the purported transfer fee. The petitioner argued that the transaction
amounted to transfer of immovable property and was not exigibleto GST. The Court accepted the petitioner’s contention
and relied upon its earlier ruling in Gujarat Chamber of Commerce and Industry v. Union of India, [2025] 170
taxmann.com 251 (Gujarat), wherein it was held that the assignment of leasehold rights in land is a transaction involving
immovable property and does not constitute ‘supply’ under Section 7(1)(a) of the CGST Act read with Schedule II and
Schedule III. The Court held that such transactions fall outside the scope of GST and that input tax credit cannot be utilized

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to discharge any such GST liability. The Show Cause Notice was thus quashed and the petition was allowed.

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Author’s Comments:

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In essence, this judgment deepens the jurisprudential divide between 'rights in immovable property' and 'supply of services',
reinforcing that not all rights created by contract are taxable under GST. The key takeaway is the judicial affirmation that

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leasehold rights in land, once assigned, are akin to interest in immovable property—and such transfer, despite involving

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monetary consideration, does not attract GST.
However, as rightly observed, this judgment is not a blanket shield against GST on all property-related rights. A nuanced
assessment must be undertaken in each case to determine:

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• Whether possession or control is transferred,

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• Whether the right arises out of land or is merely a contractual right to use,
• Whether such rights are alienable and heritable, or are personal and time-bound.

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For instance, grant of development rights (TDR/FAR), mining rights, spectrum usage rights, and forest leases, despite

I T
being linked to land, have been consistently held as taxable services due to the limited, revocable, and non-transferable
nature of the rights involved.

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In the author’s considered view, this decision is a strong precedent for defending leasehold assignments of industrial land,
however, it must be cautiously and selectively invoked—only in cases where the transfer clearly evidences de facto control,

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possessory rights, and irrevocable benefits arising from the land. Transactions involving periodic licensing, overlapping
control, or regulatory permissions may not benefit from this immunity and would still warrant GST applicability.

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 Whether penalty under Section 129 of the GST Act can be imposed
solely for non-filling of Part-B of the e-way bill in the absence of
any finding regarding intent to evade tax?
No. The Hon’ble Allahabad High Court in the case of M/s Tata Hitachi Construction Machinery Company Private
Limited v. State of Uttar Pradesh & Others [Writ Tax No. 2148 of 2025, decided on 09.05.2025 | Citation: 2025 (5) TMI
770 - ALLAHABAD HIGH COURT] held that the mere non-filling of Part-B of the e-way bill, without any finding of intent to
evade tax, does not justify imposition of penalty under Section 129 of the U.P. GST Act. In this case, the petitioner’s goods
were intercepted during transit and detained due to an incomplete e-way bill, where Part-B was left unfilled. The Assistant
Commissioner imposed a penalty under Section 129(3), relying solely on the procedural lapse. The petitioner contended
that there was no intention to evade tax, and in absence of any allegation or finding to that effect, the penalty was
unsustainable. The Hon’ble High Court found that the impugned order only referred to violation of Rule 138 regarding non-
filling of Part-B, and there was no mention or assessment of any intent to evade tax. Referring to its earlier ruling in M/s
Precision Tools India v. State of U.P[2024] 160 taxmann.com 80 (Allahabad) [29-01-2024], the Court reiterated that
penalty under Section 129 requires a clear finding of tax evasion intent. The Court set aside the penalty order and directed
the return of the bank guarantee furnished by the petitioner.

Author’s Comments:

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It is important to recognize that the statutory language of Section 129 does not expressly require the authorities to establish

O
mens rea as a precondition in every case. In this regard, the Hon’ble Calcutta High Court in Asian Switchgear Pvt. Ltd. v.
State of West Bengal [M.A.T. No. 32 of 2023, (12) TMI 236 - CALCUTTA HIGH COURT]drew from the Supreme

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Court's rulings in Union of India v. Dharmendra Textile Processors (2008)(2008 AIR SCW 8038) , Union of India v.

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Rajasthan Spinning & Weaving Mills (2009)(AIRONLINE 2009 SC 20), and most notably, Shri Ram Mutual Fund v.
SEBI (2006) and ONGC v. Saw Pipes Ltd (2003), (AIR 2003 SUPREME COURT 2629), to observe that the absence of a
mens rea requirement does not automatically justify the imposition of penalty either. A balanced approach is essential,

H
where penalties must be based on a deliberate violation or at least gross negligence—not routine or inadvertent procedural

S
errors.
This decision fortifies the jurisprudential clarity that penalty under Section 129 of the GST Act cannot be imposed in the

E
absence of a clear finding of intent to evade tax. Mere procedural lapses such as non-filling of Part-B of the e-way bill,

I T
particularly when the consignment is otherwise accompanied by valid invoice and Part-A details, cannot be equated with
evasion, unless there are circumstances indicating concealment or suppression.

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 Whether the demand raised u/s 73 can exceed the amount
quantified in DRC-01 when the SCN merely seeks documents for
clarification, but no response is furnished?
Yes, the Hon’ble Allahabad High Court in the case of M/s Mayank Mineral v. State of U.P. and Another [Writ Tax No.
1559 of 2025, decided on 07.05.2025 | Citation: 2025 (5) TMI 917 - ALLAHABAD HIGH COURT] upheld the demand
raised in excess of the amount specified in the SCN (DRC-01) on the ground that specific discrepancies were identified in
the detailed notice and the assessee failed to respond with supporting documents. The petitioner challenged the demand of
₹52,48,621/- raised in the adjudication order under Section 73 of the UPGST Act, on the ground that the SCN had
quantified the proposed demand only as ₹12,10,940.82 and any enhancement beyond this violates Section 75(7) of the
Act. It was further contended that the demand was impermissibly raised in respect of two items (Points 4 and 10) where the
SCN merely called for submission of documents, which the petitioner chose not to furnish. The Hon’ble Court, however,
noted that the discrepancies had been clearly pointed out in the SCN—such as unmatched sundry creditors and suspicious
bill-to-ship-to transactions—and the taxpayer had been explicitly called upon to clarify them with documents. The failure of
the petitioner to comply with the request amounted to tacit admission. The Court held that in such cases, even if the
DRC-01 summary does not quantify the higher amount, the specific issues raised in the notice form the legal basis for

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determining additional demand. Thus, the demand was held to be valid. The Court dismissed the writ petition, stating that
the proper remedy lies before the appellate authority under Section 107 of the Act, and no ground had been made out to

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invoke extraordinary jurisdiction under Article 226.

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Author’s Comments:

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In the author’s considered opinion, the impugned demand order fails the test of legal sustainability on multiple counts:

A
1. Violation of Section 75(7): This provision serves as a statutory limitation on the adjudicating authority’s powers. It
protects the taxpayer from surprises and ensures that the grounds and quantum of demand remain within the contours of
the SCN. The Hon’ble Supreme Court in Toyo Engineering India Ltd. [Writ No. 2532 of 2001, dated August 31, 2006

H
(2006 AIR SCW 5167)] has categorically held that the department cannot travel beyond the scope of the SCN.

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2. Misapplication of Section 73: The impugned order appears to rely on the petitioner’s non-response to a request for
documents. However, Section 73 does not contemplate ex-parte demand merely due to failure to furnish documents. Such

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action resembles best judgment assessment, which is permissible only under Section 62, and not under Section 73. The

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lack of response, cannot by itself give rise to a quantifiable tax liability in absence of cogent evidence.
3. Suspicion ≠ Evidence: For issues like "suspicious e-way bill transactions" or "unmatched sundry creditors," the

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department must substantiate its claims through investigation or cross-verification. Suspicion, however well-intentioned,
cannot replace the burden of proof. If the department had credible intelligence indicating fraudulent conduct or fictitious

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transactions, it ought to have invoked Section 67 (inspection, search, seizure) and proceeded under Section 74—not 73—
given the alleged presence of fraud or wilful suppression.

24
 Whether the denial of opportunity to respond to a Show Cause
Notice merely because it was uploaded under the ‘Additional
Notices and Orders’ tab on the GST portal, resulting in dismissal of
appeal as time-barred, is legally sustainable?
No the Hon’ble Delhi High Court in case of M/s GMT Garments v. Union of India & Ors., [W.P.(C) 5304/2025, decided
on 25.04.2025, citation -2025 (4) TMI 1640 - DELHI HIGH COURT] held that such procedural failure cannot defeat the
taxpayer’s right to be heard. The Hon’ble Court noted that the petitioner challenged the dismissal of its appeal by the
Appellate Authority on the ground that it was barred by limitation. The original Show Cause Notice was issued on
23.12.2023 and uploaded under the ‘Additional Notices and Orders’ tab of the GST portal. The petitioner contended that it
remained unaware of the SCN due to its placement on a lesser-known tab, resulting in non-submission of reply and passing
of the ex parte adjudication order dated 03.04.2024. Subsequently, the petitioner filed an appeal under Section 107 of the
CGST Act, but the same was dismissed on 11.11.2024 as being beyond the prescribed limitation period. The Hon’ble Delhi
High Court took note of its previous rulings in Satish Chand Mittal v. STO, Anant Wire Industries v. STO (2024 (9) TMI
757 - DELHI HIGH COURT), and Neelgiri Machinery v. Commissioner DGST(2025 (3) TMI 1308 - DELHI HIGH
COURT), where it had categorically held that uploading notices solely under the ‘Additional Notices and Orders’ tab is
insufficient communication and violates the principles of natural justice. The Court observed that the petitioner was deprived

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of an opportunity to respond to the SCN and consequently penalized by an ex parte order and a dismissed appeal. It held
that such procedural failure cannot defeat the taxpayer’s right to be heard. Accordingly, the High Court condoned the delay

R
in filing the appeal, restored the appeal to its original number, and directed the Appellate Authority to decide the matter on

O
merits, after considering relevant precedents and affording an opportunity of hearing to the petitioner.

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Author’s Comments:

A
In the author’s considered opinion, the core issue is not whether the Show Cause Notice was uploaded under the
“Additional Notices & Orders” tab or any other tab on the GST portal. What truly matters is whether the notice was actually
served upon the taxpayer and whether it reached the intended recipient in a manner that afforded them a real opportunity to

H
respond. Section 169 of the CGST Act, 2017 provides multiple permissible modes of service, but this does not grant

S
unqualified discretion to the department. Rather, the proper officer must choose the most appropriate and effective mode of
service depending on the facts and circumstances of each case.

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The use of a method that is least likely to reach the taxpayer—merely because it is legally permissible—defeats the very

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object of service, which is to “set the law in motion” by informing the noticee of the proceedings. The burden squarely lies
on the revenue to demonstrate that service was actually effected. If that burden is not discharged, then the validity of the

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entire proceeding stands vitiated.
Furthermore, in the context of appeal filing under Section 107, the crucial date is not the date of order uploaded on portal,

A
but the date of actual communication to the taxpayer. The date of knowledge, whether through coercive action like recovery
from bank account or manual communication, should be taken as the "date of communication" under Section 107(1). Had

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the taxpayer strategically mentioned this date in Column 7 of Form GST APL-01 and stated “No” in Column 16 (regarding
delay), the appeal would have been within limitation and not subject to rejection under Section 107(4). This lapse in
strategy proved fatal.
This case also exposes a procedural rigidity often encountered in the appellate framework under GST, where First
Appellate Authorities lack jurisdiction to condone delay beyond the prescribed limit. Taxpayers must be mindful of this
limitation and carefully draft their appeals with specific emphasis on when the order was actually received—not just when it
was digitally uploaded. If this procedural nuance is overlooked, then even meritorious cases can fall through the cracks due
to a technical bar of limitation.

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 ABOUT THE AUTHOR

CA Ritesh Arora
Senior Partner, Ritesh Arora & Associates
CA Ritesh Arora is a distinguished Chartered Accountant with over 12
years of focused expertise in Indirect Taxation, with a special emphasis

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O
on GST litigation, advisory, and appellate matters. A Fellow Member of
the Institute of Chartered Accountants of India (ICAI), he qualified in

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2013 and has since emerged as a trusted name in the field of GST,

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known for his deep legal insight and strategic approach to complex tax
disputes.
His core areas of practice include appellate proceedings, departmental audits, inspection and search cases, and legal

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strategy formulation under the GST regime. His strong command over GST jurisprudence and nuanced understanding

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of procedural intricacies make him a sought-after consultant for challenging matters.
CA Ritesh Arora is the author of the widely acclaimed publication "GST Gavel – A Litigation Guide", which

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meticulously analyses over 500 landmark case laws with curated author’s commentary, serving as a practical

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handbook for professionals navigating GST litigation. He is also the co-author of “Reference Manual on Exports and

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Imports – Provisions under Distinct Laws”, a comprehensive guide covering FTP 2023, the Customs Act, FEMA,

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and the IGST Act.
His expert articles and insights regularly feature across leading professional platforms and are published in monthly

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newsletters of over 30 ICAI branches across India, further amplifying his contribution to the profession.
In recognition of his leadership and commitment to professional development, he served as Vice Chairman and

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NICASA Chairman of the ICAI Amritsar Branchfor the term 2024–25, and earlier as Treasurer during 2022–2024.
During his tenure, he played a pivotal role in mentoring young professionals and driving capacity-building initiatives
across the region.
Academic & Professional Credentials:
• DISA (Diploma in Information Systems Audit) – ICAI
• B.Com (Professional) – Guru Nanak Dev University
• Certified in Concurrent Audit of Banks – ICAI
• Empanelled Peer Reviewer – Peer Review Board, ICAI
Beyond his professional accomplishments, CA RiteshArora is also a former National Silver Medalist and Punjab Gold
Medalist in Judo at CBSE National Tournaments—an early testament to his discipline and competitive spirit.
With a unique blend of subject-matter expertise, courtroom experience, and a passion for simplifying complex tax
laws, CA Ritesh Arora continues to make a meaningful impact as a practitioner, author, speaker, and mentor in India’s
evolving GST landscape.

[email protected]
+91 6239 955 119

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