Facts :The petitioner was subjected to an assessment order dated 02.08.2025 raising a demand of over ₹244 crores. Prior to and immediately after the assessment, the authorities provisionally attached bank accounts and issued recovery notice dated 19.08.2025, resulting in recovery of ₹170 crores. Due to attachment and recovery, the petitioner could not file appeal as it was unable to arrange the statutory pre-deposit. The petitioner challenged the recovery, attachment, and conditions imposed by the Department.Court Decision:The Court held that once the statutory pre-deposit requirement under Section 107(6) is satisfied, a deemed stay of recovery operates and further coercive steps are not permissible. It directed that the amount already recovered be adjusted towards the 10% pre-deposit and the balance be refunded upon furnishing undertaking by the petitioner. The Court further held that restrictions on use of funds can be imposed only to safeguard revenue interests, and directed the petitioner to maintain specified balance and retain sale proceeds till disposal of appeal. The writ petition was disposed of with directions for refund subject to undertakings and adjustment of pre-deposit. 

BackgroundA Show Cause Notice was issued on 25th September 2023 for the tax period July 2017 to March 2018, with no date for personal hearing fixed therein. The Petitioner filed its reply on 25th October 2023 with supporting documents. Thereafter, without affording a personal hearing, an impugned order dated 30th December 2023 was passed raising a demand of Rs. 15,39,686/-. The Petitioner, unable to challenge the order immediately due to a dispute with his GST Consultant (who had not informed the Petitioner of the order), filed a Rectification Application on 27th March 2024 under Section 161 of the Act. The Rectification Application was rejected on 28th June 2024 by a one-line mechanical order holding the application to be "unsatisfactory" without providing any reasons as to why no error was apparent on the face of the record. The Petitioner then filed the present Writ Petition challenging both the original demand order dated 30th December 2023 and the Rectification Order dated 28th June 2024.Relevant FactsThe Petitioner raised two distinct challenges. First, regarding the original demand order, the Petitioner contended it was passed without affording a personal hearing, as the SCN had not fixed any hearing date. The Revenue countered that the Petitioner had filed a reply, had an opportunity of hearing and an efficacious appeal remedy. The Court required the Petitioner to explain the delay through an additional affidavit — the explanation offered was a dispute with the GST Consultant which resulted in unawareness of the impugned order. Second, regarding the Rectification Order, the Petitioner contended that it was dismissed mechanically — without applying mind, without recording any reason as to why no error was apparent on the face of the record, and without affording the Petitioner a hearing before rejecting the application adversely. The Rectification Order merely stated: "I have gone through rectification application and observed that no error/mistake is apparent on record as such I reject the application for rectification" — without any elaboration or reasoning whatsoever.Third Proviso to Section 161 — Key Statutory Text:"Provided also that where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification."Court Observations (Verbatim)"Considering the above as also the facts of the case, in the opinion of the Court no ground for entertaining the challenge against the impugned order has been made out as the Petitioner had an opportunity of filing a reply which it did. Further the delay is not sufficiently explained. The order is of December 2023 and the writ petition has been filed even after the limitation period for filing the appeal has lapsed."— Para 6 (on the original demand order — challenge rejected)"The above position of law is clear to the effect that it is necessary to afford a hearing to the assessee when the rectification order adversely affects the said assessee. The said position would also prevail when the rectification application has been preferred by the assessee and the same is being rejected without providing reasons for non-consideration/insufficiency of the grounds raised by the said assessee. This practice, in our view, would be in line with the intent of the third proviso to Section 161 of the Act which stipulates compliance with the principle of natural justice to protect the interest of the assessees."— Para 9 (Court's own finding on Section 161)"It is clear from a reading of the said order, that the same is a mechanical order passed without providing reasons as to why there is no error apparent on the face of the record."— Para 11 (on the Rectification Order dated 28th June 2024)From Suriya Cement Agency v. State Tax Officer (Madras HC, W.P.(MD) No. 7338 of 2024 — relied upon via HVR Solar):"The Provisio indicates that when an order is being made adverse to the assessee, then he should be given an opportunity of being heard when the rectification adversely affects any person. The principles of natural justice had been inbuilt by way of the 3rd Proviso to Section 161. If pursuant to a Rectification Application, if a rectification is made and if it adversely affects the assesse, Proviso 3 contemplates an opportunity of hearing to be given. However, when an Rectification Application is made at the instance of assessee and the rectification is being sought to be rejected without considering the reasons for rectification or by giving reasons as to why such rectification could not be entertained. It is also imperative that the assessee to be put on notice."— Para 8 of Suriya Cement Agency, as quoted in Para 8 of the present judgmentFinal VerdictOriginal Order — Against AssesseeChallenge to demand order dated 30.12.2023 refused. Delay not sufficiently explained; writ filed after appeal limitation period lapsed; petitioner had filed a reply.Rectification Order — For AssesseeRectification Order dated 28.06.2024 set aside as mechanical and without reasons. Fresh hearing directed; reasoned order to be passed thereafter.Appellate remedy of the Petitioner after the fresh rectification order is expressly kept open. Petition disposed of accordingly.Cases Referred by CourtHVR Solar Private Limited v. Sales Tax Officer Class II Avato Ward 67 & Anr.Relied upon2025:DHC:2476-DB — Delhi High Court (Division Bench) — Considered the third proviso to Section 161 of the CGST Act; basis for the court's analysis in the present caseSuriya Cement Agency v. State Tax OfficerRelied uponW.P. (MD) No. 7338 of 2024 — Madras High Court — Decided on 21 November 2024 — Held that rejection of a rectification application without hearing the assessee and without recording reasons is impermissible under the third proviso to Section 161; assessee must be put on notice even when the application is filed at the instance of the assessee and is being rejected 

Facts:A search was conducted on 03.08.2021 at the premises of the petitioner, a metal scrap dealer. Investigation by DGGI revealed that the petitioner had allegedly availed fraudulent ITC from several non-existent supplier firms and passed on such ITC through fake invoices. A show cause notice dated 29.05.2023 was issued for the period 2017-18 to 2021-22 proposing recovery of ₹83,76,32,528/- under Section 74 along with interest and penalty, which was confirmed by the adjudication order dated 23.01.2025.Court Decision:The Court held that the impugned adjudication order was a detailed order passed after granting multiple opportunities of hearing and after considering the replies filed by the petitioner. The contention that the replies were not considered was rejected.The Court further held that issuance of a consolidated show cause notice for multiple financial years under Section 74 of the CGST Act is permissible as the provisions use the expressions “for any period” and “for such periods”. In cases involving fraudulent availment or utilisation of ITC, transactions across several years may have to be examined together to establish the pattern of fraud.The Court also held that denial of cross-examination in show cause notice proceedings does not automatically vitiate the adjudication, as the right of cross-examination is not an unfettered right and depends on the facts of each case.Since the adjudication order was appealable under Section 107 of the CGST Act and involved disputed questions of fact, the Court declined to exercise writ jurisdiction and relegated the petitioner to the statutory appellate remedy.Cases Referred by Court:·         Vallabh Textile Through Its Authorized Representative v. Additional/Joint Commissioner, CGST Delhi East Commissionerate & Ors.·         Sushil Aggarwal v. Principal Commissioner of Customs·         Telestar Travels Pvt. Ltd. v. Special Director of Enforcement, (2013) 9 SCC 549·         Shamshad Ahmad v. Tilak Raj Bajaj, (2008) 9 SCC 1·         HIM Logistics Pvt. Ltd. v. Principal Commissioner of Customs, 2016 SCC OnLine Del 1236·         Flevel International v. Central Excise, 2015 SCC OnLine Del 12173 

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" 

Facts :The petitioner challenged an order passed under Section 73 of the CGST/SGST Act on the ground that proper notice was not served. It was contended that although the show cause notice was uploaded on the GST portal, it was not served through other modes under Section 169(1)(a) to (c). The petitioner argued that mere portal upload does not constitute valid service and the order violated principles of natural justice.Court Decision:The Court held that Section 169 permits service of notice through any one of the prescribed modes, including making it available on the common portal under Section 169(1)(d). It ruled that service through the portal constitutes valid service and is sufficient compliance under the statute. Relying on the Division Bench decision in Sunil Kumar K., the Court found no infirmity in the proceedings and dismissed the writ petition, granting liberty to pursue statutory remedies.Cases Referred:Sunil Kumar K. v. State Tax Officer-I, Kottarakkara