Facts:The petitioner challenged the show cause notice dated 18.11.2024 and the adjudication order dated 31.01.2025 passed under Section 73 of the CGST Act. The contention of the petitioner was that the final order had been passed within less than three months from the issuance of the notice, contrary to the requirement under Sections 73(2) and 73(10) of the CGST Act.Court Decision:The Court held that Section 73(2) requires issuance of the notice at least three months prior to the outer time limit for passing the order under Section 73(10), and this period ensures that the assessee gets meaningful opportunity to file reply, seek personal hearing and avail the statutory options under Section 73 such as payment within thirty days.The Court held that maintaining a minimum gap of three months between issuance of notice and passing of the final order is mandatory. Since the notice was issued on 18.11.2024 and the final order was passed on 31.01.2025, the gap was only about two months and thirteen days. The show cause notice and the order were therefore quashed and the matter was remanded to the authority for fresh consideration in accordance with law.Cases Referred by Court:·         C.H. Robinson Worldwide Freight India Pvt. Ltd. v. Additional Commissioner, CGST-Delhi-South & Ors., W.P.(C) 15508/2024, Delhi High Court, Order dated 29.10.2025·         Tata Play Limited v. Sales Tax Officer Class II/AVATO, W.P.(C) 4781/2025, Delhi High Court·         The Cotton Corporation of India v. Assistant Commissioner (ST Auditfac) & Ors., Writ Petition No.1463 of 2025, Andhra Pradesh High Court, Order dated 05.02.2025

Background. The matter pertained to CGST dues for the assessment year 2020-21. The RBI initiated the Corporate Insolvency Resolution Process against the Petitioner under the IBC on 8 October 2021, and the resolution order was made on 11 August 2023. There was nothing on record to show that the Respondent authorities, who later made the impugned order and raised the impugned demands, had intervened in the CIRP or sought any reliefs therein. Ignoring the resolution order, a show-cause notice dated 27 November 2024 was issued to the Petitioner. The Petitioner replied and objected to any demand being raised, relying on Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. [(2021) 91 GSTR 28 (SC)] and Vaibhav Goel v. DCIT [Civil Appeal No. 49 of 2022, decided 20 March 2025]. Despite the objections, the impugned order dated 25 February 2025 came to be passed, giving rise to the Petition. The Respondents, though instructions were wanting, contended that the impugned order was correctly made and that the Petitioner had an alternate and efficacious remedy of appeal.Observations of the Court. The Court observed that ordinarily it would have sustained the objection of alternate remedy, but declined to do so since the legal position stood fairly settled by the two decisions relied upon, which bound the Respondents and which they ought to have followed by discharging the show-cause notice. Reference was made to JSW Steel Limited v. Pratishtha Thakur Haritwal & Ors. [CP (C) No. 629 of 2023 in WP (C) No. 1177 of 2020], where the Supreme Court held that continuation of proceedings by the authorities even after Ghanashyam Mishra was specifically brought to their notice was contemptuous in nature, the authorities there being given the benefit of doubt only because the matter was among the first arising out of that judgment.Following Ghanashyam Mishra and M/s Monet Ispat and Energy Ltd. & Anr. v. State of Odisha & Anr. [WP (C) 1177 of 2020], the Court reiterated that once a Resolution Plan is duly approved by the adjudicating authority, the claims provided in the Plan stand frozen and bind the corporate debtor and all those claiming through it; all claims not forming part of the Plan stand extinguished on the date of approval, and no person is entitled to continue any proceeding in respect of such a claim. All dues, including statutory dues owed to the Central Government, any State Government or any local authority, if not part of the Resolution Plan, stand extinguished, and no proceedings in respect of such dues for the period prior to approval under Section 31 of the IBC can be continued. The Court also noted the holding that the 2019 amendment to Section 31 is clarificatory and declaratory, effective from the date the Code came into force, and that the respondents there were not entitled to recover any claims or debts from the corporate debtor accruing prior to the transfer date.Final verdict. Given the clear pronouncement of the Supreme Court, the Respondents were not justified in issuing the show-cause notice dated 27 November 2024 or in disposing of it by the impugned order. The proceedings post 11 August 2023 were in the teeth of the law laid down by the Supreme Court and were held to be wholly without jurisdiction. The impugned order dated 25 February 2025 was quashed and set aside, and the Rule was made absolute in those terms, without any order as to costs.

BackgroundThe petitioner challenged the constitutional validity of Section 16(2)(c) of the CGST Act and its corresponding Maharashtra provision. During the hearing, the Respondents pointed out that the Kerala, Patna and Madhya Pradesh High Courts had upheld the validity of the impugned provisions, while the petitioner relied upon a recent decision of the Gauhati High Court which had struck down the provision.The petitioner also challenged an order dated 28 February 2025 raising a GST demand of ₹1 crore, along with an additional ₹1 crore towards penalty and interest. The petitioner did not dispute the dues but contended that the liability should be borne by the fifth respondent. It was also submitted that the fifth respondent had already paid ₹21 lakhs towards GST liability.Court ObservationThe Court, prima facie, held that the State should not be deprived of its dues merely because of the dispute between the petitioner and the fifth respondent regarding who was liable to pay the dues. The Court was not prepared to accept that payment of ₹21 lakhs by the fifth respondent discharged the entire tax liability. If the petitioner believed that the liability was of the fifth respondent, it could initiate appropriate proceedings to recover the amount from that respondent.The Court further observed that, despite issuing Rule, the existence of conflicting decisions on the constitutional validity of the provision meant that this was not a case for granting an unconditional stay. It also noted that at least three High Courts had already upheld the constitutional validity of the impugned provision.Final VerdictThe Court issued Rule in the writ petition and also issued notice to the Attorney General for India because a provision of the Central statute was under challenge. However, it declined to grant an unconditional stay on recovery.The Court stayed recovery pursuant to the order dated 28 February 2025 subject to the petitioner depositing ₹20 lakhs in Court within six weeks from the date of uploading of the order. The stay would automatically stand vacated if the deposit and due intimation to the Respondents were not made. 

BackgroundThe petitioner is engaged in providing financial back-office services to an overseas entity under a service agreement. The department treated these services as "intermediary services" under Section 13(8)(b) of the IGST Act, 2017, holding that the place of supply was in India and hence the transactions could not qualify as "export of services." A show cause notice dated 28.11.2024 was issued. The petitioner filed detailed replies on 27.01.2025 and 06.02.2025 relying upon at least nine judicial precedents and a Board Circular dated 20.09.2021. However, the adjudicating authority passed an order dated 24.02.2025 confirming the GST demand of ₹70,57,98,208/- for the period April 2020 to March 2021, without independently addressing any of the contentions or precedents cited by the petitioner. A comparative chart submitted by the petitioner's counsel demonstrated that the so-called "reasoning" in the impugned order was a verbatim cut-and-paste of the allegations in the show cause notice itself. Court Observations (Verbatim)Para 8: "We are satisfied that the adjudicating authority has failed to independently apply its mind to the various contentions raised in the replies filed on behalf of the Petitioner. Instead, the adjudicating authority has chosen to copy or rather cut and paste verbatim the allegations in the show cause notice dated 28 November 2024 to pass them off as reasons supporting the impugned order."Para 13: "Besides the grounds, the adjudicating authority is obliged to issue an order after thoroughly considering all relevant arguments and to state the reasons supporting its decision briefly. Any decision made without considering the main contentions or without providing any supporting reasons would be indicative of a lack of application of mind. Simply cutting and pasting the allegations in the show cause notice or mechanically reciting them verbatim does not inspire confidence that due consideration has been shown to the cause, and the decision is made after its due consideration. Ultimately, these are aspects of natural justice principles that should guide the decision-making process in such cases."Para 15: "The phrase 'consider' does not mean that the contents of the representation are transcribed in the impugned order and without any discussion on the contentions raised, a conclusion is reached. In this case, the so-called reasoning is merely a cut-and-paste of most of the contents of the show cause notice, as noticed above."Para 17: "Section 75(6) of the CGST Act provides that the proper officer, in his order, shall set out the relevant facts and the basis of his decision. The emphasis of this provision is on the 'basis of decision'. This means the emphasis is on the reasons that support the decision. Merely cutting and pasting the allegations from the show cause notice does not amount to giving any independent reasons after due consideration the assessee's contentions or after due application of mind to those contentions."Para 19: "Since this is a case of complete non-application of mind and violation of principles of natural justice, there is no point in directing the Petitioner to pursue the alternative remedy of appeal. A clear breach of natural justice is an exception to the general rule that statutory remedies should usually be exhausted before seeking this Court's extraordinary intervention." Final VerdictThe impugned demand order dated 24.02.2025 was quashed and set aside. The matter was remanded to the adjudicating authority for fresh consideration and disposal of the show cause notice within three months, with a direction to follow principles of natural justice, including an opportunity of hearing and proper consideration of the petitioner's replies. All contentions on merits were left open.👍 In favour of the Assessee Cases / Provisions ReferredCitationCase NameWrit Petition No.2836 of 2021 (Bombay HC, decided 11.06.2024)Piramal Enterprises Limited v. State of Maharashtra & Anr.(1985) SCC OnLine SC 178Union of India & Anr. v. Tulsiram Patel2017 SCC OnLine Hyd. 164S. Kiranmayi v. Sri N. Sambasiva RaoStatutory Provisions Referred:Section 13(8)(b) of the IGST Act, 2017 — Place of supply of intermediary servicesSection 73(9) of the CGST Act / MGST Act — Determination of tax and issuance of demand orderSection 75(6) of the CGST Act — Requirement to set out relevant facts and basis of decisionSection 7(5)(c) of the IGST Act — Inter-state supply provisionsSection 8(2) of the IGST Act — Intra-state supply provisionsSection 2(6) of the IGST Act — Definition of "export of services" 

BACKGROUND & FACTSShrinivasa Realcon Pvt. Ltd. (petitioner/developer) entered into an Agreement of Development dated 07.01.2022 (also referred to as 07.04.2022 in the order) with a landowner for development of Plot No. 2 admeasuring 8,000 sq. ft., Mouza Lendra, into a multi-storied complex. The consideration under the agreement was Rs. 7 crores and two apartments to the landowner. The petitioner was granted the right to develop the property by utilizing its present FSI or any increases thereof. No TDR or FSI was purchased by the owner or by the petitioner from any external person or entity in execution of this agreement.The department issued a Show Cause Notice dated 24.07.2024 demanding GST on the aforesaid transaction, followed by a second Show Cause Notice dated 14.08.2024, claiming GST under Entry 5B of the Notification dated 28.06.2017 as amended by Notification dated 29.03.2019. The department sought to rely on Clause 18 of the Development Agreement — which merely required the landowner to execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, and execute apartment deeds in favour of individual buyers nominated by the developer — to contend that a "transfer" was involved attracting Entry 5B. An order dated 10.12.2024 was also passed pursuant to the show cause notices. The petitioner challenged both the show cause notices and the consequent order before the High Court. COURT OBSERVATIONS (Verbatim)Para 4: "A perusal of the language of entry 5B, above would indicate, that it relates to services which can be said to be supplied by any person by way of transfer of development rights or Floor Space Index (FSI) [including additional FSI] for construction of a project by a promoter. The expression 'transfer of development rights' read in conjunction with 'FSI' as indicated in entry 5B, would only relate to a TDR (Transferable Development Rights) as contemplated by clause 11.2.2 under the regulations for grant of TDR in the Unified Development Control and Promotion Regulations for the State of Maharashtra, clause 11.2.1 of which defines transferable development rights, to mean compensation in the form of Floor Space Index (FSI) or development rights, which shall entitle the owner for construction of built up area subject to the provisions in the said regulations. It therefore, follows, that the TDR / FSI as contemplated by entry 5B, cannot be related, to the rights which a developer derives from the owner under the agreement of development for constructing the building for the owners, in lieu of the owner agreeing to permit the developer to transfer certain built up units for consideration to be appropriated by the developer."Para 5: "In the instant case, the agreement dated 07.4.2022 (page 27) is an agreement of development entered into between the petitioner and the land owner, in terms of which, the petitioner, has been granted right to develop the property in question by utilizing its present FSI or any increases thereof. Mr. Naik, learned Senior Counsel, upon instructions, submits, that in the execution of the agreement dated 07.4.2022 no TDR or FSI has been purchased by the owner or for that matter by the petitioner from any person / entity whomsoever."Para 6: "Clause 18 relied upon by Mr. Nalamwar, learned counsel for the respondents merely indicates, that the owners shall sign and execute a deed of declaration under Section 2 of the Maharashtra Apartment Ownership Act, 1970, submitting the entire scheme to the provisions of the Maharashtra Apartment Ownership Act and the execution of the apartment deeds in favour of each individual buyers to the nominees of the developers. It is, therefore, apparent, that the transaction as contemplated in terms of the agreement dated 07.4.2022 does not fall within entry 5B of the Notification dated 28.6.2017, as it stand amended by the Notification dated 29.3.2019, in view of which, neither the show cause notice dated 14.08.2023 (page 123) nor the consequent order dated 10.12.2024 (page 137), can be sustained and are hereby quashed and set aside." FINAL VERDICTWrit petition allowed. The Development Agreement dated 07.04.2022 does not involve any TDR/FSI as contemplated under Entry 5B of the GST Notification. Both the show cause notices and the consequent order are quashed and set aside. GST under Entry 5B is not leviable on the transaction. 👍