Show Cause Notice
14 articles
Audit Findings and Section 74: Patna High Court Declines to Quash a Fraud-Based GST Notice and Sends the Assessee to Appeal
In Amit Agency v. Commissioner, CGST and CX, a Division Bench of the Patna High Court distinguishes G.R. Infra Projects and Tata Steel, refuses to test the sufficiency of the officer's satisfaction under Section 74(1), and directs the assessee to the appellate authority.
13 min readA Reply Handed Over at the Hearing Must Be Read: Orissa High Court Sets Aside Section 74 Order That Treated a Manually Filed Reply as No Reply
A Division Bench of the Orissa High Court has quashed a Section 74 order for 2019-20 that proceeded as if no reply existed, although the Superintendent had signed an acknowledgment of the contractor's written reply. The Court held that Rule 142(4) of the CGST Rules does not make electronic filing a condition of being heard, remitted the matter, and left the limitation and jurisdiction questions open.
13 min readNo Visible Signature, No Nullity: Telangana High Court Full Bench Holds Portal-Authenticated GST Show Cause Notices and Orders Valid
Ruling on a reference that resolved conflicting Division Bench decisions, the Full Bench holds that DRC-01 and DRC-07 notices and orders authenticated through the officer's digital signature certificate and uploaded on the GST portal are valid, are served on upload, and set limitation running from that date.
14 min readShow-Cause Notice as Foundation: CESTAT Kolkata Clears a Rs. 144 Crore Reverse-Charge Demand Under the Place of Provision of Services Rules
A shipping company faced with a Rs. 144.27 crore reverse-charge service tax demand watched the department appeal the near-entirety of it after an adjudicating authority accepted the company's own reading of the Place of Provision of Services Rules. CESTAT Kolkata dismissed that appeal, holding that a show cause notice which asserts a rule applies without saying why the taxpayer's contrary claim is wrong cannot sustain either the demand or an extended period of limitation — and separately held that demurrage is not consideration for a service at all.
13 min readDeath Is Not a Bar: Delhi High Court Holds Section 93 CGST Act Permits GST Penalty Proceedings to Be Commenced Against a Legal Representative After the Taxpayer's Death
More than three years after her husband died, the GST Department issued his widow a Show Cause Notice proposing a penalty for his alleged acts. She argued Section 93 of the CGST Act only lets proceedings already begun in a taxpayer's lifetime continue after death — not begin afresh. The Delhi High Court disagreed, upheld the provision against an Article 14 challenge, and ordered the Department to explain what it is still doing with ₹15.4 lakh in seized cash.
13 min read629 Noticees, One Order: Delhi High Court Declines a GST Writ Challenge, Distinguishing ASP Traders on Natural Justice
When a single Order-in-Original runs to 1,881 pages and names 629 firms and individuals in an alleged fake-invoicing racket, does an individual noticee's claim that its reply was never considered open the door to a writ petition? The Delhi High Court says no — and distinguishes the Supreme Court's ASP Traders on the ground that a mass adjudication order is not the same as an unreasoned order against a single assessee.
14 min readJudicial Discipline Binds the Revenue Too: Delhi High Court Quashes a GST Demand That Defied a Binding CESTAT Refund Order
Welspring Universal was handed a Rs. 76,72,000 demand for a CENVAT refund the Customs, Excise and Service Tax Appellate Tribunal had already held it was entitled to keep, on limitation grounds the Tribunal had already rejected. The Delhi High Court quashed the demand, holding that a departmental adjudicating authority cannot treat a superior appellate order as though it does not exist merely because a parallel proceeding remains formally open.
14 min readSection 61 Is Not the Only Gateway: Allahabad High Court Sustains a Section 74A GST Notice Issued Without Prior Return Scrutiny
Eighteen sub-contractors, a works-contract chain running into crores, and a jurisdictional argument that Section 61 scrutiny must precede every GST demand. The Allahabad High Court draws the line between a Section 61-triggered notice and one built on independent verification, and holds the two are not interchangeable gateways.
13 min readOne Tax Period, One Notice: Bombay High Court's Nagpur Bench Reaffirms That a Section 74 GST Notice Cannot Club Multiple Financial Years, Pending a Larger Bench Reference
A show cause notice covering financial years 2019-20 to 2021-22, alleging suppression of taxable value, was quashed because the CGST Act ties assessment and its five-year limitation to each financial year separately. The Bombay High Court held itself bound by its own precedent over a contrary Delhi High Court view — even after the Supreme Court declined to interfere with that view — but preserved the Revenue's liberty to revive the case if a pending Larger Bench reference goes the other way.
13 min readDepartmental Knowledge Defeats the Extended Period: Calcutta High Court Quashes a Central Excise Demand Founded on the Assessee's Own Cost Audit Report
Hindalco Industries faced a Central Excise demand of Rs. 6,29,920 built entirely on its own Cost Audit Report, three years after departmental officers had personally witnessed the very stock shortages now called suppression. The Calcutta High Court held the extended period of limitation unavailable: what the proviso to Section 11A requires is a deliberate act of concealment by the assessee, not the mere absence of departmental knowledge, and a demand cannot simultaneously rest on a statutory record and be founded on its suppression.
13 min readWhose Delay Is It? Delhi High Court Holds a ₹20 Crore Customs Demand Timely Because the Assessee's Own Writ Stay Suspended the Section 28(9) Clock
GKEM International argued that a ₹20.18 crore customs demand was time-barred because its show cause notice sat in the department's 'Call Book' for years. The Delhi High Court disagreed: the delay was occasioned by the assessee's own writ petition and interim stay, which is exactly the circumstance Section 28(9A) excludes from the limitation clock — and the Call Book entry was merely the administrative record of that fact, not its source.
14 min readNo Hearing, No Time to Pay: Bombay High Court Quashes a Section 74A GST Order and Fixes Personal Cost on the Officer Who Passed It
A GST demand order recited that personal hearing was 'not applicable' and was signed off while the taxpayer's sixty-day window to pay up and avoid penalty was still open. The Bombay High Court quashed it on both grounds, held the alternate remedy of a statutory appeal no bar, and ordered the department to recover its Rs. 50,000 cost from the officer who passed the order.
14 min readDelay Is Not Default: Supreme Court Holds a Carrier Who Deposits Foreign Travel Tax Late Cannot Be Penalised as One Who Failed to Pay It
An airline deposited Foreign Travel Tax late in six instances, once by 63 days, and was hit with a penalty of over Rs. 71 lakh — nearly 600 times the amount first imposed before its own appeal triggered a remand. The Supreme Court set the penalty aside, holding that 'failure to pay' cannot be equated with delay, and that customs officers retain discretion not to impose a penalty even where a statutory minimum is prescribed.
14 min readBland Recitals Will Not Do: Supreme Court Quashes a Section 74 GST Notice for Want of Foundational Facts of Fraud or Suppression
An audit objection, a notice parked in the department's own 'call book', and a bare assertion of suppression were not enough to invoke GST's extended limitation period. The Supreme Court draws a sharp line between reciting the words of Section 74 and actually pleading the facts that justify it.
13 min read