The Supreme Court: Relaxes 10% GST Pre-Deposit Norm in Rs.159 Crore Ex Parte Assessment Case; Orders Rs.3.50 Crore Deposit, Grants Interim Protection Over Denial of Hearing, 20-03-2026

ISSUE: Whether the petitioner, against whom ex parte assessment orders creating a liability of about Rs.159 crore were passed without effective opportunity of hearing due to non-access to relied-upon documents, should be granted relief from the statutory pre-deposit requirement of 10% (Rs.6.70 crore) u/s 107 of the U.P. GST Act for pursuing an appeal.

FACTS: The department issued two show cause notices demanding approximately Rs.119.98 crore and Rs.17.25 crore respectively, with total principal liability around Rs.67 crore. The petitioner sought relied-upon documents to respond, which the department claimed were uploaded; however, they were placed on an inaccessible portal, preventing filing of replies. Consequently, ex parte assessment orders were passed, raising total liability to about Rs.159 crore including interest and penalty. The High Court of Allahabad declined writ jurisdiction citing alternative remedy, and the Appellate Authority rejected the appeal due to non-payment of 10% pre-deposit (approx. Rs.6.70 crore). The petitioner pleaded lack of opportunity and financial hardship.

HELD: The Court granted conditional relief by directing the petitioner to deposit Rs.3.50 crore within two weeks, in lieu of the statutory pre-deposit. Upon such deposit, notice shall be issued, and no coercive steps shall be taken pursuant to the impugned assessment orders, thereby protecting the petitioner while allowing the challenge to proceed.

GST Anti-Profiteering: No Penalty on Refund of ITC Benefit, 18% Interest Payable; Tribunal Orders Rs.6.53 Lakh Refund to Homebuyers

ISSUE: Whether the Respondent violated Section 171 of the CGST Act, 2017 by failing to pass on the benefit of additional input tax credit (ITC) to homebuyers in the project “Raunak Heights,” and whether liability for refund, interest, and penalty arises.

FACTS: Proceedings arose from a DGAP report dated 07.01.2025, based on a complaint alleging profiteering by the Respondent in construction services. The investigation showed that ITC increased from 7.67% (pre-GST) to 12.08% (post-GST), yielding an additional benefit of 4.41%. The DGAP computed total profiteering at Rs. 42,02,357, out of which Rs. 35,48,496 had already been passed on, leaving Rs. 6,53,861 (inclusive of GST) unpaid. The Respondent accepted the findings and submitted evidence of refunds to buyers, while contesting penalty and interest liability.

HELD: The Tribunal held that the Respondent contravened Section 171(1) by not passing on ITC benefits but had subsequently refunded the amount; hence, no penalty was imposable due to statutory conditions and timing of Section 171(3A). However, interest at 18% per annum was held payable under Rule 133(3)(b) from the date of excess collection till refund. The Respondent was directed to refund Rs. 6,53,861 along with applicable interest to eligible homebuyers within one month.

Ex-Parte GST Order Set Aside for Violation of Natural Justice Due to Improper Service of Notice

ISSUE: Whether an ex-parte order passed under Section 73 of the Meghalaya Gst Act, 2022 without proper service of show cause notice and without affording an opportunity of hearing violates principles of natural justice and is liable to be set aside.

FACTS: The petitioner, a former proprietor of “Hanumanbux Umadutt”, had sold the business in September 2021 and her GST registration was subsequently cancelled w.e.f. 09.11.2022. A show cause notice dated 30.09.2023 and an ex-parte order dated 22.12.2023 were issued demanding reversal of Input Tax Credit with interest and penalty. The petitioner contended that she never received the notice physically or otherwise and became aware of the proceedings only in April 2025 through a recovery officer. The department argued that cancellation of registration does not extinguish prior tax liabilities.

HELD: The Court held that since no proper service of notice was effected and no opportunity of hearing was provided, the ex-parte order violated principles of natural justice and could not be sustained. The impugned order dated 22.12.2023 was set aside, and the petitioner was granted 3 weeks to file a reply, with a direction to the authority to pass a fresh order after due hearing in accordance with law.

Section 54 Limitation Mandatory; Delay in GST Refund Claims Condonable Only via Article 226 Jurisdiction

ISSUE: Whether the time limit of two years prescribed under Section 54 of the CGST Act, 2017 for filing a refund application is mandatory, and if so, whether a belated refund claim can still be entertained through writ jurisdiction under Article 226 of the Constitution.

FACTS: The assessee, engaged in intermediary services, initially paid IGST treating services as export (October 2017), but later paid CGST and SGST treating the same as intra-State supply (March 2018). A refund claim for wrongly paid IGST was filed on 30.03.2024 under Section 54, which was rejected as time-barred beyond two years. The Single Judge allowed the refund holding limitation as directory, leading to Revenue’s appeal.

HELD: The Court held that the two-year limitation under Section 54 is mandatory and binding on authorities. However, in absence of any statutory mechanism for condonation, taxpayers may invoke Article 226 for relief in genuine cases. Delay can be condoned by the Court subject to safeguarding Revenue’s rights, and in the present case, delay was condoned with direction to process the refund claim.

Delay in GST Registration Revocation Condoned Subject to Payment of Statutory Dues

ISSUE: Whether cancellation of GST registration due to delay in seeking revocation can be set aside and the delay condoned when the assessee expresses willingness to comply with all statutory dues under the Odisha GST.

FACTS: The petitioner challenged a show cause notice dated 11 April 2019 and consequent cancellation order dated 23 April 2019 under the Odisha Goods and Services Tax Act, 2017. The petitioner submitted readiness to pay all outstanding tax, interest, late fee, penalty, and other dues for acceptance of returns. Reliance was placed on the precedent in M/s. Mohanty Enterprises v. Commissioner, CT & GST, Odisha (2022) 59 TLC (GST) 139, where delay in filing for revocation under Rule 23 of the OGST Rules was condoned subject to payment of dues. The State Revenue opposed through its counsel.

HELD: The Court followed the precedent and condoned the delay in seeking revocation of GST registration. It directed that, upon payment of all dues and compliance with statutory requirements, the petitioner’s application for revocation be considered in accordance with law. Relief was granted in the interest of revenue, and the writ petition was disposed of.

The Supreme Court upheld the High Court’s view that the writ petition was not maintainable due to the availability of an alternative remedy. However, in the interest of justice, it directed that if the appeal is filed before the GST Tribunal by 1st April, 2026, it shall not be rejected on the ground of limitation. Accordingly, the special leave petition was disposed of along with pending applications.

Writ Petition Dismissed Due to Availability of Alternative Remedy under Section 107 of CGST Act

ISSUE: Whether the writ petition challenging the SCN and Order-in-Original confirming GST demand of Rs. 3,00,14,058/- under Section 74 of the Central Goods and Services Tax Act, 2017 is maintainable in light of alleged violation of natural justice, non-supply of relied upon documents, and non-consideration of reply, despite availability of an alternative statutory remedy of appeal.

FACT: The petitioner, a courier service provider, was issued summons seeking documents, which were either received late or allegedly not served properly. Subsequently, an SCN was issued alleging suppression of facts and short payment of GST for the period 2018–24, followed by confirmation of demand through an adjudication order. The petitioner contended that key relied upon documents were not supplied, its detailed reply and supporting documents were ignored, and the valuation adopted by the department was incorrect. Aggrieved, the petitioner filed a writ petition seeking quashing of the SCN and adjudication order and protection from coercive action.

HELD: The Court held that the writ petition was not maintainable as an efficacious alternative remedy of appeal under Section 107 of the CGST Act was available. It observed that the grievances raised, including procedural lapses and non-consideration of submissions, arise from the adjudicatory record and fall within the scope of appellate scrutiny. No exceptional circumstance warranting interference under Article 226 was made out. Accordingly, the petition was dismissed with liberty to the petitioner to avail statutory remedies, without expressing any opinion on merits.

Service Tax Demand Set Aside for Lack of Inquiry and Violation of Natural Justice; Matter Remanded for Fresh Adjudication

ISSUE: Whether the Order-in-Original dated 04.07.2024 and consequential rectification order dated 23.06.2025, passed under Sections 73 and 75 of the Finance Act, 1994, were liable to be quashed on grounds of lack of jurisdiction, violation of principles of natural justice, absence of independent inquiry, and possibility of double taxation for the financial years 2015-16 and 2016-17.

FACTS: The petitioner, a works contractor, claimed exemption under Mega Exemption Notification No. 25/2012-ST for services rendered to Government/local authorities in Bihar and Jharkhand prior to GST. The Department initiated proceedings based on Income Tax data and issued show cause notices, one of which was allegedly not served. Due to non-response, the adjudicating authority confirmed service tax demand without independent verification of whether services were rendered in Odisha. Parallel proceedings by authorities at Ranchi and Patna resulted in either dropping of demand or setting aside on limitation, indicating overlap and potential double taxation. The petitioner contended lack of opportunity to present its case, including exemption and limitation defenses.

HELD: The Court set aside the Order-in-Original dated 04.07.2024 and rectification order dated 23.06.2025, holding that the adjudicating authority failed to conduct independent inquiry and denied adequate opportunity, rendering findings perverse and violative of natural justice. The matter was remanded for fresh adjudication with direction to allow the petitioner to produce evidence, raise exemption, limitation, and double taxation pleas. The authority was directed to complete proceedings within six weeks, ensuring proper hearing.

Petitioner’s Delay in Challenging GST Adjudication Order Held Inexcusable; Writ Petition Dismissed for Non-Compliance with Statutory Limitation and Availability of Alternate Remedy

Issue: Whether the petitioner can invoke the writ jurisdiction under Article 226 to challenge the adjudication order dated 07.04.2022 despite delay in filing the petition and availability of an alternate statutory remedy.

Facts: The petitioner’s GST registration was cancelled on 29.05.2022 and restored on 04.07.2023. The adjudication order for the period April 2020 to March 2021 was passed on 07.04.2022. The petitioner claimed that due to the cancellation of registration and lack of notice, there was sufficient cause for delay in filing an appeal. The petition was instituted only on 26.07.2023. The respondents contended that show cause notices had been served, the petitioner did not respond, and the claim of violation of natural justice was without merit.

Held: The Court held that the petitioner failed to demonstrate sufficient cause for not availing the statutory remedy within the prescribed limitation period. The delay was unjustified, and the petition was instituted without urgency. Reliance was placed on Supreme Court precedents, including GLAXO SMITH KLINE and Rikhab Chand Jain, emphasizing that writ jurisdiction under Article 226 cannot be used to bypass statutory remedies or limitation periods. The petition was dismissed.

Writ Petition Dismissed for Suppression of Alternative Remedy; Liberty Granted to File Statutory Appeal under GST Law

Issue: The issue is whether a writ petition challenging an ex parte adjudication order under Section 73(9) of the Jharkhand GST Act is maintainable when a statutory appeal remedy under Section 107 is available, and whether alleged non-service of notices and violation of natural justice justify bypassing such alternative remedy.

Fact: The petitioner challenged the adjudication order dated 30.12.2023 claiming it was passed ex parte without service of show cause notice or opportunity of hearing under Section 75(4), and asserted no alternative remedy was available. The respondents, through counter-affidavit, stated that notices in Form ASMT-10 and DRC-01 were duly served via registered email and GST portal, but the petitioner failed to respond. The petitioner denied receipt of notices and claimed knowledge of the order only in July 2025, though the writ petition was filed later with delay and vague pleadings. The respondents also relied on judicial precedent emphasizing exhaustion of statutory remedies.

Held: The Court held that the petition was not maintainable as the petitioner had an effective alternative remedy of appeal under Section 107 and had made a misleading statement regarding its absence. The dispute regarding service of notices involved contested questions of fact unsuitable for adjudication under writ jurisdiction. The Court refused to bypass the statutory mechanism, dismissed the petition, and granted liberty to the petitioner to file an appeal in accordance with law, leaving all issues open for determination by the appellate authority.

Writ Petition Dismissed; Consolidation of GST Demands Across Multiple Financial Years Upheld

Issue: Whether the impugned Order-in-Original dated 31.01.2025, confirming GST demands and penalties across multiple financial years, can be quashed and pre-deposit dispensed with, given that part of the liability was already paid during audit and the dispute involves classification and rate of tax rather than fraudulent availment of Input Tax Credit.

Facts: The petitioner, M/s Technosys Integrated Solutions Pvt. Ltd., engaged in supply and installation of CCTV systems, underwent GST audit for FY 2017-18 to FY 2021-22. An Observation Memo dated 06.11.2023 indicated a liability of Rs. 49,52,923/-, which was paid by the petitioner. Subsequently, SCN No. 09/2024-25 proposed further GST demands of Rs. 18,67,69,338/- and Rs. 1,30,00,000/-, along with penalties under Sections 74 and 122(1)(xvii) of the CGST Act, alleging incorrect availing of concessional 12% rate under Notification No. 11/2017-CT (Rate). The petitioner contended that supplies qualified as works contract services and the issue was purely interpretational regarding tax rate. The adjudicating authority confirmed the entire demand in OIO dated 31.01.2025. The petitioner challenged the order, arguing impermissible consolidation of multiple years and reliance on judgments related to ITC fraud.

Held: The Court dismissed the writ petition, holding that consolidation of SCNs across multiple years is permissible under Sections 73 and 74 of the CGST Act, including for non-fraud cases. Reliance on Ambika Traders was affirmed, and pendency of similar petitions before the Supreme Court did not warrant deferral. The Court did not examine merits of the tax liability, leaving remedies to the statutory appellate process.

GST Registration Cancellation Can Be Revoked on Compliance with Pending Returns and Dues under Rule 22(4) CGST Rules

Issue: Whether cancellation of GST registration for non-filing of returns for six months, without the petitioner replying to the show cause notice within time, can still be reconsidered and restored when the petitioner is willing to comply with statutory requirements under Rule 22(4) of the CGST Rules, 2017.

Facts: The petitioners, registered under the CGST/AGST Act, failed to file GST returns for a continuous period of six months, leading to issuance of a show cause notice and subsequent cancellation of registration by the Assistant Commissioner. The petitioners did not respond in time due to lack of familiarity with online procedures and health issues. Their appeal for revocation was rejected as time-barred. Aggrieved, they filed a writ petition, expressing willingness to file pending returns and pay all dues with interest and late fees.

Held: The Court held that cancellation of GST registration has serious civil consequences, and under the proviso to Rule 22(4), if the petitioner furnishes all pending returns and pays dues with interest and late fees, the authority has the power to drop cancellation proceedings. The Court allowed the petitioners to approach the competent authority within two months for restoration, directing the authority to consider the application and pass orders in accordance with law within a stipulated time, while clarifying that the order shall not be treated as a precedent.

GST DRC-01 Summary Not a Valid SCN; Unsigned Order and No Hearing Violates Natural Justice, Order Set Aside

ISSUE: Whether a valid Show Cause Notice (SCN) was issued before passing the order under Section 74A; whether GST DRC-01 and DRC-07 summaries can substitute a proper SCN and order; and whether the impugned order violated Section 75(4) and principles of natural justice due to lack of hearing and proper authentication.

FACT: The petitioner received a summary of show cause notice in Form GST DRC-01 dated 18.07.2025 for April 2024–March 2025, with an attachment containing tax determination but no proper SCN. Subsequently, an order dated 19.08.2025 in Form GST DRC-07 was passed without any visible signature or authentication of the Proper Officer. The summary did not mention any date of personal hearing, and only a reply date was provided. The respondents admitted that no separate SCN was issued and the attachment was treated as the SCN, while also conceding absence of signatures on record.

HELD: The Court held that a summary in GST DRC-01 cannot substitute a proper SCN, and issuance of a valid SCN under Section 74A is mandatory as per Rule 142. The impugned order was invalid due to absence of a proper SCN, lack of authentication as required under Rule 26(3), and failure to provide an opportunity of hearing under Section 75(4), violating natural justice. Accordingly, the order dated 19.08.2025 was set aside, with liberty granted to the authorities to initiate fresh proceedings in accordance with law, excluding the intervening period for limitation purposes.

GST Registration Cancellation Can Be Reconsidered on Compliance with Rule 22(4); Court Allows Opportunity for Restoration

Issue: Whether cancellation of GST registration for non-filing of returns for six months without reply to show cause notice can be reconsidered, and whether the petitioner should be allowed restoration by complying with requirements under Rule 22(4) of the CGST Rules, 2017.

Fact: The petitioners, running “M/S NIT Traders,” were registered under the CGST Act, 2017 but failed to file GST returns for over six months. A show cause notice was issued, but due to lack of familiarity with online procedures and financial loss, they did not respond in time, leading to cancellation of registration by order dated 08.11.2024. Aggrieved, they filed a writ petition stating willingness to file pending returns and pay dues with interest and late fees as per Rule 22.

Held: The Court held that since cancellation has serious civil consequences and Rule 22(4) permits dropping of proceedings upon compliance, the petitioners should be given an opportunity. It directed them to approach the authority within two months, and upon fulfilling requirements of filing returns and paying dues, the authority shall consider restoration of GST registration in accordance with law within a stipulated time. The order was clarified not to be treated as a precedent.

Assignment of Leasehold Rights Treated as Transfer of Immovable Property; GST Not Applicable and Demand Set Aside

Issue: Whether assignment of leasehold rights in a GIDC industrial plot by the petitioner to a third party constitutes “supply of service” under Section 7(1)(a) of the GST Act, thereby attracting GST, and whether the impugned show cause notice and Order-in-Original levying GST are valid.

Fact: The petitioner was allotted a GIDC industrial plot and subsequently transferred its leasehold rights to M/s. Jal Aqua International through an assignment deed. The GST authorities initiated proceedings, issued summons, and later a show cause notice demanding Rs.1,45,80,000 as GST liability, treating the transaction as supply of service. Despite the petitioner’s objections and reliance on pending litigation, the authority passed an Order-in-Original confirming the demand, which was challenged in the present writ petition.

Held: The Court held that assignment of leasehold rights amounts to transfer of immovable property and not supply of service under the GST Act, as already settled in Gujarat Chamber of Commerce case. Such transactions fall outside the scope of Section 7 and are not liable to GST. Accordingly, the impugned show cause notice and Order-in-Original were quashed and set aside, and the petition was allowed.

Ex-Parte GST Demand Quashed for Violation of Natural Justice; Matter Remanded for Fresh Adjudication

Issue: Whether the ex-parte demand order and show cause notice issued under the Central/Bihar Goods and Services Tax Act, 2017 for the tax period April 2018–March 2019 are liable to be quashed on the ground of violation of principles of natural justice, particularly due to lack of proper communication of notices and denial of opportunity of personal hearing.

Fact: The petitioner challenged the demand order dated 29.04.2024 creating a tax liability of Rs 26,66,667.40 and the show cause notice dated 13.12.2023 determining liability of Rs 25,86,667.96. It was contended that notices were not properly communicated as they were uploaded in an incorrect tab on the GST portal and no personal hearing was granted as required under law. The petitioner relied on a prior judgment where similar deficiencies led to setting aside of the demand. The State did not object to remanding the matter for fresh adjudication.

Held: The Court quashed the impugned ex-parte demand order and directed the authorities to initiate fresh proceedings in accordance with law, ensuring proper opportunity of hearing to the petitioner. The adjudication is to be completed within six months, with liberty to proceed ex parte if the petitioner fails to cooperate. The writ petition was accordingly allowed.

Consolidated SCN under Section 74 covering multiple financial years impermissible; notice quashed with liberty to issue year-wise notices.

ISSUE: Whether a show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017 covering multiple financial years (2017–18 to 2021–22) in a single consolidated notice is legally permissible, and whether such clubbing of tax periods violates the statutory scheme of assessment and limitation under the CGST Act.

FACTS: A show cause notice dated 26/7/2024 was issued by the Senior Intelligence Officer, DGGI, Nagpur alleging suppression of taxable value and short payment of CGST for the period 2017–18 to 2021–22. The petitioner challenged the notice contending that consolidation of multiple financial years in one notice under Section 74 is impermissible. Reliance was placed on Bombay High Court decisions in Milroc Good Earth Developers v. Union of India (2025) and Rite Water Solutions (India) Ltd. v. Joint Commissioner (2025), which held that the CGST scheme requires assessment and recovery proceedings to be conducted year-wise based on the tax period linked to the relevant financial year. The respondents relied on the Delhi High Court judgment in Mathur Polymers v. Union of India (2025), which permitted consolidated notices in cases involving fraudulent ITC across several years, and argued that the Supreme Court had declined interference with that judgment. The Court noted that dismissal of the SLP in limine did not attract the doctrine of merger and that Bombay High Court precedents continued to bind authorities within the State.

HELD: The Court held that under the statutory framework of the CGST Act, tax liability, assessment, and limitation operate separately for each financial year, and therefore issuance of a consolidated show cause notice covering multiple tax periods under Section 74 is not permissible. Following the earlier Bombay High Court rulings in Milroc Good Earth Developers and Rite Water Solutions, the impugned show cause notice dated 26/7/2024 was quashed and set aside. However, the respondents were granted liberty to issue fresh notices separately for the relevant financial years in accordance with Section 74 of the CGST Act, subject to compliance with limitation and other statutory provisions including Section 6(2)(b). No order as to costs.

GST DRC-01 Summary Not a Valid SCN; Order Set Aside for Violation of Natural Justice

Issue: Whether a summary of show cause notice in Form GST DRC-01 along with an attachment of tax determination can be treated as a valid Show Cause Notice under Section 74, and whether passing an order without granting a personal hearing violates Section 75(4) and principles of natural justice.

Fact: The petitioner was issued a summary of show cause notice in GST DRC-01 dated 24.09.2025 for April 2021 to March 2022 along with a tax determination attachment, but no proper show cause notice was served. The petitioner did not file any reply due to absence of a valid SCN, and subsequently an order was passed on 26.11.2025 in GST DRC-07. The summary did not mention any date of personal hearing and the column was left blank, while the department contended that the attachment itself constituted sufficient notice.

Held: The Court held that a summary in GST DRC-01 cannot substitute a proper Show Cause Notice under Section 74 and that a separate, duly issued SCN is mandatory. The attachment of tax determination cannot be treated as a valid SCN, and failure to provide an opportunity of hearing violates Section 75(4) and principles of natural justice. Accordingly, the impugned order was set aside with liberty to initiate fresh proceedings in accordance with law.

Summary in GST DRC-01 cannot substitute proper Show Cause Notice; unsigned orders and denial of hearing violate Section 73, Rule 26(3) and principles of natural justice.

Issue: The issue was whether the summary of show cause notice issued in Form GST DRC-01 along with an attachment containing tax determination could be treated as a valid Show Cause Notice under Section 73 of the Central and State GST Acts, whether unsigned attachments to DRC-01 and DRC-07 satisfied the requirement of authentication under Rule 26(3) of the CGST Rules, 2017, and whether passing an adverse order without granting personal hearing violated Section 75(4) and principles of natural justice.

Fact: The petitioner received a Summary of Show Cause Notice dated 29.09.2023 in Form GST DRC-01 for the tax period July 2017 to March 2018 with an attachment containing determination of tax but no separate formal Show Cause Notice. As the attachment did not require the petitioner to show cause and lacked authentication by the Proper Officer, the petitioner did not file a reply. Subsequently, an order in Form GST DRC-07 was passed on the ground that payment was not made within 30 days. The petitioner challenged the order contending that no proper SCN was issued, the attachments were unsigned, and no opportunity of personal hearing was provided though an adverse order was passed.

Held: The Court held that a summary in Form GST DRC-01 cannot substitute a proper Show Cause Notice under Section 73(1) and attaching a tax determination statement to the summary does not constitute a valid SCN. It further held that notices and orders must be authenticated by the Proper Officer through digital or e-signature as required under Rule 26(3), and unsigned documents lack legal validity. The Court also held that Section 75(4) mandates an opportunity of hearing whenever an adverse decision is contemplated and failure to provide such hearing violates principles of natural justice. Accordingly, the impugned order was set aside and the authorities were granted liberty to initiate fresh proceedings in accordance with law.

The Court Directs Refund Compliance Within Three Weeks and Disposes Petition

Issue: Whether there has been wilful disobedience of the order dated 28.03.2025 in W.P.(C) 14121/2024 and whether the petitioner is entitled to the refund as directed.

Facts: The petitioner filed a petition alleging non-compliance of the order dated 28.03.2025. An application under Section 151 CPC was filed, resulting in the order dated 13.02.2026, which clarified that the earlier order required no further clarification and that the petitioner could take necessary steps for compliance. Despite these directions, the refund has not been granted. The respondent contended that the matter was under active consideration and steps would be taken in accordance with law.

Held: The court directed that necessary compliance, including furnishing the refund, be completed within three weeks and disposed of the petition accordingly.

Consolidated SCN under Section 74 CGST for multiple financial years not permissible; notice quashed.

ISSUE: Whether a consolidated show cause notice issued under Section 74 of the CGST Act, 2017 covering multiple financial years (2018–19 to 2022–23) alleging suppression of taxable value and short payment of tax is legally permissible, particularly in cases involving alleged fraudulent availment of input tax credit.

FACTS: A show cause notice dated 28/09/2025 was issued to the petitioner under Section 74 of the CGST Act alleging suppression of taxable value and short payment of CGST for the financial years 2018–19 to 2022–23. The petitioner challenged the notice on the ground that clubbing multiple financial years in a single notice is impermissible under the statutory scheme. Reliance was placed on the Bombay High Court decisions in Milroc Good Earth Developers v. Union of India and Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST, which held that each financial year constitutes a separate tax period and therefore separate notices must be issued. The respondent authorities argued that in cases of fraudulent availment of ITC, consolidated notices are permissible, relying on the Delhi High Court decision in Mathur Polymers v. Union of India, which upheld such consolidation. It was further argued that the Delhi High Court judgment had attained finality as the Supreme Court dismissed the SLP against it.

HELD: The Court held that under the scheme of the CGST Act, tax liability and assessment are linked to each financial year as a distinct tax period, and limitation under Sections 73(10) and 74(10) operates separately for each year. Consequently, clubbing multiple financial years in a single show cause notice is impermissible even in cases involving allegations of fraudulent availment of ITC. The dismissal of the SLP against the Delhi High Court judgment did not attract the doctrine of merger as it was dismissed in limine. Since the Bombay High Court had subsequently taken a contrary view in Milroc Good Earth Developers and Rite Water Solutions, those decisions were binding on the authorities. Accordingly, the show cause notice dated 28/09/2025 was quashed with liberty to the respondents to issue fresh notices separately in accordance with Section 74 of the CGST Act, if legally permissible.

The Court directs authority to decide representation within 90 days and release admitted dues with 6% interest if found payable

Issue: Whether the petitioner is entitled to release of admitted contractual dues of Rs. 6,79,674 along with interest, refund of allegedly illegal EPF/ESIC deductions, application of revised GST rate of 18% on pending bills, and whether a writ of mandamus can be issued directing the authorities to make such payments.

Fact: The petitioner executed contractual works for operation and maintenance of systems at Government Medical College & Hospital, Shahdol, and raised verified invoices. Despite completion of work and acknowledgment of dues, payments were not released. Deductions towards EPF/ESIC at 18.11% were made though the petitioner claimed exemption, which was later adjudicated in petitioner’s favour. GST rate was revised from 12% to 18% and adopted by the department, and internal communications admitted petitioner’s entitlement, including refund and revised billing. Funds were also sanctioned, yet payments remained pending, leading to multiple representations, including the last one dated 03.04.2025.

Held: The Court disposed of the petition directing the respondent authority to consider and decide the petitioner’s representation by passing a reasoned speaking order within 90 days, taking into account relevant documents. It further directed that if the petitioner is found entitled, the due amount be paid along with interest at 6% per annum from the date of entitlement till actual payment. The Court clarified that no opinion on merits was expressed and granted no order as to costs.

Writ Petition Disposed Granting Liberty to Avail Statutory Remedy; Recovery Stayed Subject to Pre-Deposit and Undertaking

Issue: The issue is whether the petitioner is entitled to relief against the impugned orders and whether recovery proceedings should continue despite the availability of an alternative statutory mechanism under relevant GST circulars pending constitution of the Appellate Tribunal.

Facts: The matter was heard on admission and, with consent of the parties, finally disposed of. The petitioner challenged orders dated 20.01.2023 and 10.03.2025 passed under the Chhattisgarh GST Act, including rejection of an application under Section 161. The petitioner relied on Circular No.224/18/2024-GST dated 11.07.2024, which provides guidelines for recovery where appeal to the Tribunal cannot be filed due to its non-constitution, allowing pre-deposit and filing of an undertaking to obtain stay on recovery. It was further submitted that limitation for filing appeal stands extended and the Government has notified 30.06.2026 as the last date to file appeals in such cases. The petitioner sought liberty to avail this mechanism. The State did not oppose the prayer.

Held: The Court held that in view of the existing circulars and guidelines, nothing remained for adjudication in the writ petition. The petition was disposed of granting liberty to the petitioner to comply with the conditions of the circular by filing an undertaking and making the required pre-deposit within the stipulated time. Upon such compliance, recovery of the remaining demand shall remain stayed as per law; failing which, the order would lose its effect.

SCN under Section 74 of CGST Act cannot club multiple financial years; consolidated notice and consequential order quashed with liberty to issue fresh year-wise notices.

ISSUE: Whether a show cause notice issued under Section 74 of the CGST Act, 2017 can validly club multiple financial years/tax periods in a single notice, and whether the consequent order based on such consolidated notice is sustainable in law.

FACTS: A show cause notice dated 27/06/2025 was issued by the Joint Commissioner, Anti-Evasion, Nagpur under Section 74 of the CGST Act covering the period April 2018 to October 2024, followed by an order dated 28/10/2025 confirming the demand. The petitioner contended that clubbing different financial years in one notice is impermissible under the statutory scheme. Reliance was placed on Milroc Good Earth Developers v. Union of India and Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST, where the Bombay High Court held that GST liability is determined year-wise based on returns and limitation under Sections 73(10) and 74(10), and therefore consolidated notices for multiple years are not permissible. The respondents relied on the Delhi High Court decision in Mathur Polymers v. Union of India, which allowed consolidated notices in cases involving fraudulent ITC, and argued that the Supreme Court had declined to interfere with that decision. The Court observed that dismissal of SLP in limine does not result in merger, and further held that the statutory scheme of GST contemplates separate limitation and assessment for each financial year, making consolidation impermissible.

HELD: The Court held that clubbing multiple financial years/tax periods in a single show cause notice under Section 74 of the CGST Act is not permissible, as the GST framework operates on year-wise tax periods with separate limitation and assessment provisions. Following the judgments in Milroc Good Earth Developers and Rite Water Solutions, the Court quashed the show cause notice dated 27/06/2025 and the consequential order dated 28/10/2025. However, the authorities were granted liberty to issue fresh notices in accordance with Section 74 for the respective tax periods, if otherwise permissible in law.

Invalid GST Proceedings: Absence of Proper SCN, Authentication, and Hearing Vitiates Order

Issue: The issue was whether a valid Show Cause Notice under Section 73 of the GST Act was issued before passing the impugned order, whether the attachment to GST DRC-01/DRC-07 could be treated as a proper notice and order, and whether the order violated Section 75(4) and principles of natural justice due to absence of hearing and proper authentication.

Fact: The petitioner received a summary of Show Cause Notice in GST DRC-01 dated 30.11.2024 with an attachment of tax determination but no separate signed or proper Show Cause Notice. The petitioner did not reply, and an order was passed on 27.02.2025 in GST DRC-07 stating non-payment. The attachments lacked proper authentication and no personal hearing was provided, as the hearing column was left blank. The respondent admitted that no separate SCN was issued and relied on the summary and attachment as sufficient compliance.

Held: The Court held that a summary in GST DRC-01 cannot substitute a proper Show Cause Notice, and attachment of tax determination does not amount to valid initiation under Section 73. It further held that notices and orders must be duly authenticated as per Rule 26(3), and absence of signature renders them invalid. Additionally, failure to provide an opportunity of hearing violates Section 75(4) and principles of natural justice. Accordingly, the impugned order was set aside with liberty to initiate fresh proceedings in accordance with law.