Quick answer: In M/s. Chandan Patra v. Union of India (W.P.(C) No. 12771 of 2026, neutral citation 2026:OHC:187-DB), decided on 7 October 2026, a Division Bench of the Orissa High Court (Dr. Sanjeeb K. Panigrahi and Murahari Sri Raman, JJ.) set aside an Order-in-Original dated 4 February 2026 passed under Section 74 of the Central Goods and Services Tax Act, 2017 for the financial year 2019-20. The Superintendent had recorded that the noticee filed no reply in Form GST DRC-06 and did not appear, although he had signed an acknowledgment on the contractor’s written reply on the day of the personal hearing. The Court held that Section 74(9) read with Rule 142(4) of the Central Goods and Services Tax Rules, 2017 imposes no bar on considering a reply merely because it was filed manually, and remitted the matter. It expressly left the limitation and jurisdiction challenge to the Section 74 notice open.
Key Takeaways
- A manual reply is still a reply. The Court held that the Proper Officer could not treat a signed-and-acknowledged written reply as non-existent because it was not uploaded in Form GST DRC-06 on the portal (paras 6.5, 7.7).
- Reasons must engage with each point. The Proper Officer “must demonstrate in writing the manner in which he has dealt with each point raised” and give reasons for accepting or rejecting it (para 7.1).
- The writ route opened because of the hearing failure, not the merits. The Court applied the natural-justice exception to the alternative-remedy rule and declined to decide disputed facts (paras 7.6, 7.9).
- Limitation and the validity of the Section 74 notice were not decided. Paragraphs 8.1 and 8.4 preserve those objections for the adjudicating authority, so the assessee has won a fresh hearing, not a quashed demand.
- The reasoning is tied to Section 74 as it stood for 2019-20. It is a procedural ruling on the 2017 Act and Rules; it does not construe Section 74A, which governs later periods.
1. Introduction
Most Goods and Services Tax litigation over show cause notices turns on limitation or on the Department’s evidence. This judgment concerns something more basic: what an adjudicating officer must do with a reply that reached the file by a route the portal did not record. Since the Central Goods and Services Tax Act, 2017 (the “CGST Act”) moved demand proceedings online, taxpayers have been caught between the electronic forms the Rules prescribe and the reality that many notices are answered by hand, by post, or in person at a hearing. Orders reciting that no reply was received on the portal are now common, and High Courts have been correcting them one at a time.
Chandan Patra is a useful addition to that line because the facts were unusually clean. The assessee’s reply bore the Superintendent’s own signature as a token of receipt, and the Department’s counsel could not dispute it. The Court therefore had no factual conflict to resolve and could confine itself to the legal question whether Rule 142(4) of the Central Goods and Services Tax Rules, 2017 (the “CGST Rules”) makes electronic filing in Form GST DRC-06 a precondition to being heard. It held that it does not.
The judgment also repays reading for what it leaves undecided. The petitioner argued that Section 74 of the CGST Act could not be invoked on the facts, and the Court quoted two recent Supreme Court decisions on the need for foundational facts in a Section 74 notice. It nonetheless stopped short of ruling on the point. The result is a remand on procedure, with the substantive objections preserved.
This article sets out the facts and procedural history, analyses the four questions the Court addressed (the manual reply, the premature order, the alternative remedy and the jurisdictional challenge), considers how far the reasoning travels beyond 2019-20, and then turns to practical consequences.
2. Case summary and background
The assessee and the supply. The petitioner, M/s. Chandan Patra, is a proprietorship registered under the CGST Act and the Odisha Goods and Services Tax Act, 2017, engaged in works contracts. During 2019-20 it executed a works contract for the Executive Engineer, Bhanjanagar Irrigation Division, for improvement of the right flood bank of the river Kokolaba under NABARD assistance (RIDF-XXII), and received Rs.26,36,189, as reflected in Form 26AS (para 2.1). The work was tendered on the Schedule of Rates, 2014 that prevailed under the earlier Value Added Tax regime. Believing no GST applied to such irrigation works, the petitioner charged none in its running account bills (para 2.2).
The notices. On 10 July 2025 the petitioner received a notice dated 30 June 2025 titled “Investigation on non/short payment of appropriate GST liability on payment received against supply of works contract service to different Government Organisation for the Financial Year 2019-20”. It alleged receipts of Rs.73,58,507 and sought accounts, returns, work orders and bank statements (para 2.3). The petitioner’s representative could not attend because of a medical emergency, and a request for a month’s time drew no answer. A Demand-cum-Show Cause Notice dated 4 September 2025 followed under Section 74, asking why GST of Rs.8,83,021 should not be recovered with interest under Section 50(1). A reminder dated 8 January 2026, accompanied by Form GST DRC-01 dated 10 September 2025, directed a reply by 26 January 2026 and fixed a personal hearing for 27 January 2026, an earlier date of 15 October 2025 having been rescheduled (para 6.6).
The hearing and the order. On 27 January 2026 the petitioner appeared, argued, and filed a written reply, received manually and signed by the Superintendent (Annexure-8). The reply contended that the work fell under Notification No. 31/2017-Central Tax (Rates), so that GST at 5 per cent applied, and questioned whether Section 74 could be invoked at all (paras 2.3, 4.2). The Superintendent asked for Form 26AS and the running account and final bill dated 22 November 2019, which the petitioner supplied on the adjourned date of 13 February 2026, as the Hazira (Annexure-9) shows (paras 2.4, 6.13).
The Order-in-Original had already been signed. It is dated 4 February 2026 and was served on 12 February 2026. Its paragraph 4.0 recorded that the noticee “failed to appear on any of the scheduled dates and also could not produce the reply against the Show Cause Notice in the GST Portal in the Form DRC-06”, leaving “no option” but to decide on the records (para 5.1).
The writ petition. The petitioner challenged the notice and order under Articles 226 and 227 of the Constitution. The opposite parties sought adjournments between 5 May 2026 and 9 July 2026 and filed no response, and the matter was heard finally at the fresh admission stage on 30 September 2026, by consent, because only a short point arose (paras 3, 3.1).
Holding. The Court set aside the Order-in-Original for violation of natural justice and remitted the matter to the Superintendent, Bhubaneswar VII Range, to reconsider the jurisdictional objection and the reply. The petitioner was to appear within fifteen days of receiving a certified copy, and the proceeding was to conclude within eight weeks of that appearance, without unnecessary adjournments (para 8.3). Justice Murahari Sri Raman wrote the judgment and Justice Panigrahi agreed. No costs were awarded.
3. Legal analysis
(a) The manual reply. Section 74(9) of the CGST Act directs the Proper Officer to determine tax, interest and penalty “after considering the representation, if any, made by the person chargeable with tax”. Rule 142(4) of the CGST Rules provides that the representation under Section 74(9) “or the reply to any Notice issued under any section whose summary has been uploaded electronically in Form GST DRC-01 under sub-rule (1) shall be furnished in Form GST DRC-06” (footnote 1). The petitioner’s argument, which the Court accepted, was textual: “electronically” qualifies the upload of the summary notice in Form GST DRC-01 but is absent before Form GST DRC-06 (para 6.3).
That answer is sound. A prescribed form regulates content and sequence; it is not a condition of being heard. The Court called Form GST DRC-06 “a procedural tool designed to facilitate the Authority to consider the explanation rendered”, which “cannot be used as an absolute bar to deprive a taxpayer’s statutory right to defend”, and said the Proper Officer should not treat the reply as if no reply was filed merely because it was absent from the portal (para 7.7). Earlier it put the point more sharply: “Merely because the said document was not filed via electronic mode, the Proper Officer could not have shirked his responsibility to consider the same while taking a decision in the proceeding under Section 74 of the GST Act” (para 6.5).
Support came from decisions of other High Courts that the petitioner’s counsel cited: Boldrocchi India Private Limited v. State Tax Officer (ST) (Madras, 2025 SCC OnLine Mad 15551) and Asia (Chennai) Engineering Company Private Limited v. The Assistant Commissioner (ST) (Madras, Madurai Bench, decided on 22 August 2022), and then JMD News & Advertisers v. State of Uttarakhand (decided on 23 July 2026). The Court also reproduced EMCO Cables (India) Private Ltd. v. Union of India (Delhi, 2024 SCC OnLine Del 1493), where an order fell because the officer had not looked at the reply. None binds the Orissa High Court; they were used as consistent support.
The ratio is that a reply actually on the officer’s file must be considered. The judgment does not decide what follows where an assessee sends a reply that the Department never receives, and it does not relax the portal requirement for the Department’s own notices.
(b) The premature order. The officer asked for documents at the hearing on 27 January 2026 and allowed time until 13 February 2026, yet signed the order on 4 February 2026. The Court described the order as “passed prematurely” despite time “explicitly granted” (para 7.7). It also noted that the Junior Standing Counsel “could not assign any reason” why the Superintendent had acknowledged the documents on 13 February 2026 after the order was made (para 6.13), and observed that the officer had by then become functus officio, meaning his authority over the matter had ended (para 7).
(c) Natural justice and prejudice. The Court reproduced long passages from Krishnadatt Awasthy v. State of M.P. ((2025) 7 SCC 545), including its treatment of State Bank of Patiala v. S.K. Sharma and State of U.P. v. Sudhir Kumar Singh ((2021) 19 SCC 706) on when proof of prejudice is needed, and the passages from the Constitution Bench in CORE v. ECI SPIC SMO MCML (JV) ((2025) 4 SCC 641) that it quotes (paras 6.9, 6.11). It also cited Escorts Farms Ltd. v. Commissioner, Kumaon Division ((2004) 4 SCC 281) and Nagarjuna Construction Company Limited v. Government of Andhra Pradesh ((2008) 16 SCC 276) (paras 6.7, 6.8).
The Court did not undertake a prejudice analysis of its own. It treated the failure to consider a reply on file as a “gross violation” (para 6.16), and noted that courts may ask whether remand serves any purpose (para 6.11). That remand did serve a purpose is implicit in its observations that the jurisdictional objection had not been dealt with (para 6.12) and that the order did not show the officer had examined the requirements for invoking Section 74 (para 7.5). The judgment would have been clearer had it said so expressly.
(d) Alternative remedy. The Department argued that the Appellate Authority could examine natural justice and merits (para 5.2). The Court answered through Karnataka Power Transmission Corporation Limited v. Rekha ((2026) 8 SCR 489), quoting Radha Krishan Industries v. State of H.P. ((2021) 6 SCC 771) and T.N. Cements Corpn. Ltd. v. Unicon Engineers ((2025) 4 SCC 1): a writ court may entertain a petition despite an alternative remedy where natural justice is violated, the order is wholly without jurisdiction, or vires is challenged (para 7.6). It added that disputed questions of fact are best left to the competent forum (para 7.9). The petition qualified because the dispositive facts, the acknowledged reply and the dates, were undisputed. A complaint that the officer misread the evidence would face the alternative-remedy rule in full.
(e) The jurisdictional challenge. The reply had questioned whether Section 74, which requires fraud, wilful misstatement or suppression of facts, could be invoked at all. The Court noted that this was not dealt with (para 6.12) and quoted GR Infra Projects Limited Ratlam v. State of Madhya Pradesh (Civil Appeal No. 11277 of 2026, decided on 19 August 2026) and Tata Steel Limited v. Union of India (2026 SCC OnLine SC 1702, discussed in our analysis of Tata Steel), which require the foundational facts of fraud or suppression to appear in the notice: “The words are not to be mechanically recited in the notice to enable recovery outside the normal limitation provided under the statute” (para 7.4).
The Court observed that it was “not forthcoming from bare perusal of Order-in-Original” that the Proper Officer had examined the requirements for initiating the Section 74 proceeding (para 7.5). Yet it left jurisdiction, “either on the ground of limitation or on the plea of absence of ingredients for exercise of power”, open for the petitioner to raise before the authorities, citing Commissioner of Central Excise v. Krishna Wax Private Limited ((2020) 12 SCC 572) (para 8.1), and expressed no opinion on it (para 8.4).
This is where the judgment is least satisfying. The Supreme Court decisions were decided on the notice, and in GR Infra the notice was set aside. The Orissa High Court had the notice before it and a challenge to it, yet chose not to rule. The Section 74 notice therefore remains alive, and the petitioner must press the objection before the officer whose order was defective. The direction that the officer decide “without being influenced by any of the observations made hitherto” (para 8.4) is the safeguard, though the petitioner could have hoped for more.
(f) Does the reasoning survive amendment? The judgment concerns Section 74 for 2019-20 as it then stood. The Supreme Court extract at paragraph 7.4 records that Explanation 2 to Section 74 stood omitted with effect from 1 November 2024. For later periods, notices are issued under Section 74A, inserted by the Finance Act, 2024, which the judgment does not discuss. The natural-justice reasoning does not depend on the text of Section 74 and should carry over, but that is an inference from principle and not something the Court decided. The ruling is GST-specific and draws no analogy to Central Excise or Service Tax procedure.
4. Practical significance
For assessees. Keep proof of receipt. A manual reply helps only if its receipt can be shown, and the Superintendent’s signature decided this case. Where a hearing is attended, ask for an acknowledged copy of the reply and have any time granted for documents recorded. Do not treat the judgment as a licence to skip the portal. File Form GST DRC-06 electronically as well wherever the facility exists, because an order reciting that no reply came on the portal is easier to challenge when two records show otherwise.
For choice of remedy. A clear natural-justice defect on undisputed facts supports a writ despite the statutory appeal under Section 107 of the CGST Act. But the Court used the writ to obtain a remand, and the assessee remains before the same officer on merits and limitation. Where the real complaint is the Department’s view of the facts, the appeal, with its pre-deposit, may yield a decision on the merits that a remand does not. Decide at the outset which result the client needs.
For pleadings. The petition succeeded on a short point because it identified the record: the acknowledged reply, the reminder, the Hazira of 13 February 2026 and the date of the order. A writ drafted around those documents is far stronger than one alleging a general denial of hearing. The opposite parties filed no response over several listings, so the facts stood unchallenged (para 3).
For adjudicating officers. The Court said that merely mentioning that a representation was submitted is insufficient; the Proper Officer “must demonstrate in writing the manner in which he has dealt with each point raised by the petitioner/assessee and explicitly discuss assigning reason for acceptance or rejection of any point of defense” (para 7.1). A defensible order records each reply received, by whatever route, answers any objection to the initiation of Section 74 proceedings, and is not signed before the time granted for documents has run.
For works-contract businesses. The petitioner charged no GST because the contract was tendered on a VAT-era Schedule of Rates. The Court did not rule on whether that belief, or the 5 per cent rate under Notification No. 31/2017-Central Tax (Rates), was correct, and left the gap between Rs.26,36,189 received and the Rs.73,58,507 alleged for the adjudicator. Businesses contracting with government bodies on legacy rate schedules should reconcile Form 26AS receipts against returns for each year, since those figures drive such notices.
For litigation strategy. Cite the case for the proposition it decides, that a reply on file must be considered and that Form GST DRC-06 is a facilitative form. Do not cite it on the validity of a Section 74 notice or on time limits, which the Court expressly declined to decide.
5. Conclusion
Chandan Patra decides a narrow but recurring procedural point. A Proper Officer who holds a reply signed for by his own office cannot recite that none was filed on the portal and confirm a demand. Section 74(9) of the CGST Act requires him to consider the representation made, and Rule 142(4) of the CGST Rules does not turn the form of filing into a condition of being heard. The insistence on written reasons that engage with each point is a standard other adjudicating authorities will find hard to resist.
The weakness of the judgment is its restraint. It quotes the Supreme Court on the need for foundational facts in a notice, observes that the order does not show those facts were examined, and then declines to decide jurisdiction. The assessee returns to the Superintendent with a live notice, a remand and an eight-week clock. That is defensible given the Court’s wariness of disputed facts, but it leaves the more consequential question, whether Section 74 could be invoked on these facts at all, for another day.
The case will be cited for orders that ignore manually filed replies and for orders passed before time granted for documents has expired. Its limits should stay in view. It is a Division Bench ruling of one High Court on the 2017 Act and Rules for 2019-20, it rests on undisputed receipt of the reply, and it does not touch limitation, the scope of Section 74 or the merits of the rate dispute.
Authorities
Authorities applied or relied on by the Court
| Authority | Use in the judgment | Source |
|---|---|---|
| Karnataka Power Transmission Corporation Limited v. Rekha, (2026) 8 SCR 489 | Maintainability of writ despite alternative remedy (para 7.6) | https://indiankanoon.org/doc/155435331/ |
| Radha Krishan Industries v. State of H.P., (2021) 6 SCC 771 | Exceptions to alternative-remedy rule, quoted within Rekha (para 7.6) | https://indiankanoon.org/doc/155435331/ |
| T.N. Cements Corpn. Ltd. v. Unicon Engineers, (2025) 4 SCC 1 | Three contingencies for writ jurisdiction, quoted within Rekha (para 7.6) | https://indiankanoon.org/doc/155435331/ |
| Krishnadatt Awasthy v. State of M.P., (2025) 7 SCC 545 | Natural justice and prejudice (para 6.9) | https://indiankanoon.org/doc/155435331/ |
| CORE v. ECI SPIC SMO MCML (JV), (2025) 4 SCC 641 | Procedural fairness and total denial of opportunity, quoted within Krishnadatt Awasthy (para 6.9) | https://indiankanoon.org/doc/155435331/ |
| State of U.P. v. Sudhir Kumar Singh, (2021) 19 SCC 706 | Prejudice exception; remand where futile (paras 6.9, 6.11) | https://indiankanoon.org/doc/155435331/ |
| Escorts Farms Ltd. v. Commissioner, Kumaon Division, (2004) 4 SCC 281 | Natural justice and civil consequences (para 6.7) | https://indiankanoon.org/doc/155435331/ |
| Nagarjuna Construction Company Limited v. Government of Andhra Pradesh, (2008) 16 SCC 276 | Natural justice read into statutory powers (para 6.8) | https://indiankanoon.org/doc/155435331/ |
| Viveka Nand Sethi v. Chairman, J&K Bank Ltd., (2005) 5 SCC 337 | Natural justice not a straitjacket (para 6.10) | https://indiankanoon.org/doc/155435331/ |
| B. P. Enterprises v. State of Orissa, (2008) 18 VST 405 (Ori) | Officer’s duty to keep jurisdiction in mind (para 6.12) | https://indiankanoon.org/doc/155435331/ |
| GR Infra Projects Limited Ratlam v. State of Madhya Pradesh, Civil Appeal No. 11277 of 2026, decided on 19 August 2026 (2026 TAXSCAN (SC) 236) | Foundational facts for fraud or suppression (para 7.3) | https://indiankanoon.org/doc/155435331/ |
| Tata Steel Limited v. Union of India, 2026 SCC OnLine SC 1702 | Satisfaction of the officer; foundational facts (para 7.4) | https://indiankanoon.org/doc/155435331/ |
| Kesari Nandan Mobile v. Office of Assistant Commissioner of State Tax (2), Enforcement Division-5, (2025) 8 SCR 936 | Statutory authority limited to its powers (para 7.8) | https://indiankanoon.org/doc/155435331/ |
| Commissioner of Central Excise v. Krishna Wax Private Limited, (2020) 12 SCC 572 | Cited for leaving the jurisdiction question to the authorities (para 8.1) | https://indiankanoon.org/doc/155435331/ |
| JMD News & Advertisers v. State of Uttarakhand, WP (M/B) No. 54 of 2025, decided on 23 July 2026 (2026:UHC:6285-DB) | Reply not to be discarded for non-electronic filing (para 6.15) | https://indiankanoon.org/doc/155435331/ |
Authorities cited by counsel for the petitioner and relied on in support by the Court
| Authority | Use in the judgment | Source |
|---|---|---|
| Boldrocchi India Private Limited v. State Tax Officer (ST), 2025 SCC OnLine Mad 15551 | Manual reply must be considered (para 6.4) | https://indiankanoon.org/doc/155435331/ |
| Asia (Chennai) Engineering Company Private Limited v. The Assistant Commissioner (ST), W.P.(C) No. 13851 of 2022, decided on 22 August 2022 (Madras High Court, Madurai Bench) | Physical reply to be considered (para 6.5) | https://indiankanoon.org/doc/155435331/ |
| EMCO Cables (India) Private Ltd. v. Union of India, 2024 SCC OnLine Del 1493 | Prejudice; reply not looked at (para 6.14) | https://indiankanoon.org/doc/155435331/ |
Arguments of the Department. The Junior Standing Counsel relied on paragraph 4.0 of the Order-in-Original, the notice and reminder issued, and the availability of an appeal; no authority is recorded as cited on behalf of the Department (paras 5 to 5.2).
Legislation and notifications considered
| Instrument | Provisions | Source |
|---|---|---|
| Central Goods and Services Tax Act, 2017 / Odisha Goods and Services Tax Act, 2017 | Section 74, in particular Section 74(9); Section 50(1); Section 2(87) (“prescribed”) | https://www.indiacode.nic.in/ |
| Central Goods and Services Tax Rules, 2017 | Rule 142(4) (Forms GST DRC-01 and DRC-06) | https://www.indiacode.nic.in/ |
| Notification No. 31/2017-Central Tax (Rates) | Relied on by the petitioner for GST at 5 per cent on the works contract | https://www.indiacode.nic.in/ |
| Constitution of India | Articles 226 and 227 | https://www.indiacode.nic.in/ |
Judgment
M/s. Chandan Patra v. Union of India and Others, W.P.(C) No. 12771 of 2026, 2026:OHC:187-DB, High Court of Orissa, Cuttack (Dr. Sanjeeb K. Panigrahi and Murahari Sri Raman, JJ.), judgment delivered on 7 October 2026 (heard on 30 September 2026) — https://indiankanoon.org/doc/155435331/
FAQ
Must a reply to a Section 74 notice be uploaded in Form GST DRC-06 on the portal to be considered? Not according to this judgment. The Orissa High Court held that Section 74(9) read with Rule 142(4) of the CGST Rules does not bar consideration of a reply merely because it was filed manually, and that the Proper Officer cannot treat an acknowledged reply as if none had been filed.
Did the High Court decide that Section 74 could not be invoked against this assessee? No. It left the objection that the Section 74 proceeding was barred by limitation or lacked the required ingredients open for the assessee to raise before the adjudicating authority, and expressed no opinion on jurisdiction or merits.
Why was a writ petition entertained when an appeal was available? The Court applied the recognised exception for violation of the principles of natural justice, relying on Karnataka Power Transmission Corporation Limited v. Rekha and the cases quoted in it, and noted that the decisive facts were undisputed.
Does the ruling apply to periods covered by Section 74A? The judgment concerns Section 74 for 2019-20 and does not discuss Section 74A. The natural-justice reasoning does not depend on the section number, but whether a court will carry it over is a question this judgment did not decide.
This article is not legal advice and does not create an attorney–client relationship. Readers should verify the certified copy of the judgment and any subsequent clarificatory orders before relying on it, and consult a qualified advocate on the facts of their matter.