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. 👍
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. 👍
Facts:The petitioner challenged the requirement of pre-deposit under Section 107(6) of the CGST Act for filing an appeal against proceedings arising from a show cause notice dated 14.06.2022 alleging wrongful availment of input tax credit for the period 2017-18 to 2019-20. The petitioner sought waiver of the pre-deposit on the ground of financial hardship and amounts allegedly receivable from Government departments.Court Decision:The Court held that Section 107(6) mandates payment of the admitted amount of tax, interest, penalty and a pre-deposit of 10% of the disputed tax for filing an appeal. The provision does not confer discretion on the Court to waive the statutory pre-deposit requirement.The Court declined the request for waiver of pre-deposit and held that the petitioner must comply with the statutory requirement. However, the petitioner was permitted to approach the Appellate Authority and request adjustment of amounts already lying with the department or government entities towards the pre-deposit. The writ petition was disposed of with liberty to pursue the remedy before the appellate authority.Cases Referred by Court:Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del)Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC)Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr.Pioneer Corporation v. Union of India, (2016) 340 ELT 63Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del)Vice-Chancellor, University of Allahabad v. Dr. Anand Prakash MishraA.B. Bhaskara Rao v. CBIManish Goel v. Rohini GoelState of Bihar v. Arvind Kumar
Impressive Data Services Private Limited vs Commissioner (Appeals-I), Central Tax GST, Delhi 05-04-2025
Facts:The petitioner challenged the requirement of pre-deposit under Section 107(6) of the CGST Act for filing an appeal against proceedings arising from a show cause notice dated 14.06.2022 alleging wrongful availment of input tax credit for the period 2017-18 to 2019-20. The petitioner sought waiver of the pre-deposit on the ground of financial hardship and amounts allegedly receivable from Government departments.Court Decision:The Court held that Section 107(6) mandates payment of the admitted amount of tax, interest, penalty and a pre-deposit of 10% of the disputed tax for filing an appeal. The provision does not confer discretion on the Court to waive the statutory pre-deposit requirement.The Court declined the request for waiver of pre-deposit and held that the petitioner must comply with the statutory requirement. However, the petitioner was permitted to approach the Appellate Authority and request adjustment of amounts already lying with the department or government entities towards the pre-deposit. The writ petition was disposed of with liberty to pursue the remedy before the appellate authority.Cases Referred by Court:Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del)Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC)Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr.Pioneer Corporation v. Union of India, (2016) 340 ELT 63Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del)Vice-Chancellor, University of Allahabad v. Dr. Anand Prakash MishraA.B. Bhaskara Rao v. CBIManish Goel v. Rohini GoelState of Bihar v. Arvind Kumar
BACKGROUNDThe petitioner, a proprietary firm, was subjected to GST proceedings for the tax period 2019-20 by the State Tax Officer, Arumbakkam Assessment Circle, Chennai. The respondent-authority uploaded all notices and communications solely on the GST online portal. The petitioner remained unaware of these notices and consequently could not file a reply within the stipulated time. Taking advantage of this lapse, the respondent passed a demand order dated 27.08.2024 under Section 73, along with a summary in Form GST DRC-07, without granting any opportunity of personal hearing. Further, the tax authority had already recovered more than 80% of the total disputed tax demand of Rs. 2,12,546/- from the petitioner's bank account through attachment. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India before the Madras High Court, challenging the impugned order on twin grounds: (i) contravention of the CGST/TNGST Act, 2017, and (ii) violation of principles of natural justice. COURT OBSERVATIONS (Verbatim)Para 7: "In the cases on hand, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits." FINAL VERDICTThe impugned order dated 27.08.2024 was set aside and the matter was remanded to the State Tax Officer for fresh consideration. The petitioner was directed to file reply/objections with supporting documents within three weeks from receipt of the order. The respondent was directed to thereafter issue a 14-day clear notice fixing a personal hearing date and pass appropriate orders on merits, in accordance with law, as expeditiously as possible. No costs were awarded.👍 In favour of the Assessee
Tvl. Sam Enterprises v. State Tax Officer, 18-03-2025
BACKGROUNDThe petitioner, a proprietary firm, was subjected to GST proceedings for the tax period 2019-20 by the State Tax Officer, Arumbakkam Assessment Circle, Chennai. The respondent-authority uploaded all notices and communications solely on the GST online portal. The petitioner remained unaware of these notices and consequently could not file a reply within the stipulated time. Taking advantage of this lapse, the respondent passed a demand order dated 27.08.2024 under Section 73, along with a summary in Form GST DRC-07, without granting any opportunity of personal hearing. Further, the tax authority had already recovered more than 80% of the total disputed tax demand of Rs. 2,12,546/- from the petitioner's bank account through attachment. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India before the Madras High Court, challenging the impugned order on twin grounds: (i) contravention of the CGST/TNGST Act, 2017, and (ii) violation of principles of natural justice. COURT OBSERVATIONS (Verbatim)Para 7: "In the cases on hand, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits." FINAL VERDICTThe impugned order dated 27.08.2024 was set aside and the matter was remanded to the State Tax Officer for fresh consideration. The petitioner was directed to file reply/objections with supporting documents within three weeks from receipt of the order. The respondent was directed to thereafter issue a 14-day clear notice fixing a personal hearing date and pass appropriate orders on merits, in accordance with law, as expeditiously as possible. No costs were awarded.👍 In favour of the Assessee
BackgroundNetgear Technologies India Pvt. Ltd. had filed a refund application claiming export of services without payment of IGST for the tax period October 2017 to March 2018. The refund was initially rejected. On appeal, the Joint Commissioner (Appeals) allowed the appeal vide Order-in-Appeal (OIA) dated March 9, 2021, holding that the services rendered amounted to export of services and that the petitioner was not an intermediary. The Revenue neither challenged this OIA nor obtained any stay against it. The petitioner then filed a writ petition before the Delhi High Court seeking disbursement of refund in terms of the OIA. The High Court, in W.P.(C) No. 10461 of 2022 decided on May 18, 2023, directed the respondents to disburse the refund with applicable interest within four weeks. Pursuant to this, the refund of Rs. 26,88,280 along with interest of Rs. 5,04,439 was sanctioned vide order dated July 26, 2023. Thereafter, the Revenue — instead of pursuing the proper appellate remedy — issued a fresh Show Cause Notice (SCN) dated August 3, 2024 under Section 74 of the CGST Act for the same tax period, alleging that the refund was erroneously sanctioned and seeking its recovery along with interest and penalty. Court Observations (Verbatim)On the nature of the SCN and absence of fraud allegations:"The SCN carries no specific allegation of fraud, wilful misstatement or suppression against the petitioner. We are thus of the firm view that absent the same, the jurisdiction assumed by the respondent under section 74 is clearly erroneous and untenable."On the requirement for invoking Section 74:"It is pertinent to note that section 74 uses the expression 'by reason of' and thus being indicative of the power conferred by that provision being liable to be invoked only if it be found that the assessee had indulged in acts constituting fraud, wilful misstatement or suppression of facts in order to evade tax."On mechanical issuance of the SCN:"In view of the absence of clear and specific reasoning in the impugned SCN and which could be read as justifying the invocation of section 74, we find ourselves unable to sustain the impugned SCN for a tax period that had already been assessed by the GST authorities or to countenance the SCN as operating as a fetter on the grant of refund which was affirmed and recognised by the court in Netgear Technologies India."On the real intent behind the SCN:"We are constrained to observe that the SCN appears to have been issued solely to avoid the inevitable consequences which flow from our decision rendered inter partes in the earlier round of litigation. We are of the firm opinion that a claim for refund cannot be legally or justifiably stalled by the adoption of circuitous means as the present." Cases Cited by the CourtNetgear Technologies India Pvt. Ltd. v. Assistant Commissioner of GST, Delhi East Commissionerate — 2023 SCC OnLine Del 8724 (W.P.(C) No. 10461 of 2022, May 18, 2023)Zones Corporate Solutions Pvt. Ltd. v. Commissioner of Central Goods and Services Tax Delhi East — 2020-VIL-302-DELAlex Tour and Travel Private Limited v. Assistant Commissioner, CGST, Division-Janakpuri — (2024) 122 GSTR 81 (Delhi); 2023 SCC OnLine Del 2709Parity Infotech Solutions Pvt. Ltd. v. Government of NCT of Delhi — (2023) 120 GSTR 30 (Delhi); (2023) 4 HCC (Del) 685HCL Infotech Ltd. v. Commissioner, Commercial Tax — (2025) 141 GSTR 324 (All); 2024 SCC OnLine All 5769Raj Bahadur Narain Singh Sugar Mills Ltd. v. Union of India — (1997) 6 SCC 81; (1996) 88 ELT 24 (SC)Collector of Central Excise v. H.M.M. Limited — 1995 SCC OnLine SC 82; 1995 Supp (3) SCC 322; (1995) 76 ELT 497 (SC) Final VerdictThe writ petition was allowed. The impugned SCN dated August 3, 2024 was quashed and set aside. The refund claim of the petitioner was directed to be attended to and disposed of forthwith, subject to any orders that may be passed on any appeal the respondents may institute against.
Netgear Technologies India Pvt. Ltd. v. Commissioner CGST, Karol Bagh Division, GST Delhi North & Another 17-03-2025
BackgroundNetgear Technologies India Pvt. Ltd. had filed a refund application claiming export of services without payment of IGST for the tax period October 2017 to March 2018. The refund was initially rejected. On appeal, the Joint Commissioner (Appeals) allowed the appeal vide Order-in-Appeal (OIA) dated March 9, 2021, holding that the services rendered amounted to export of services and that the petitioner was not an intermediary. The Revenue neither challenged this OIA nor obtained any stay against it. The petitioner then filed a writ petition before the Delhi High Court seeking disbursement of refund in terms of the OIA. The High Court, in W.P.(C) No. 10461 of 2022 decided on May 18, 2023, directed the respondents to disburse the refund with applicable interest within four weeks. Pursuant to this, the refund of Rs. 26,88,280 along with interest of Rs. 5,04,439 was sanctioned vide order dated July 26, 2023. Thereafter, the Revenue — instead of pursuing the proper appellate remedy — issued a fresh Show Cause Notice (SCN) dated August 3, 2024 under Section 74 of the CGST Act for the same tax period, alleging that the refund was erroneously sanctioned and seeking its recovery along with interest and penalty. Court Observations (Verbatim)On the nature of the SCN and absence of fraud allegations:"The SCN carries no specific allegation of fraud, wilful misstatement or suppression against the petitioner. We are thus of the firm view that absent the same, the jurisdiction assumed by the respondent under section 74 is clearly erroneous and untenable."On the requirement for invoking Section 74:"It is pertinent to note that section 74 uses the expression 'by reason of' and thus being indicative of the power conferred by that provision being liable to be invoked only if it be found that the assessee had indulged in acts constituting fraud, wilful misstatement or suppression of facts in order to evade tax."On mechanical issuance of the SCN:"In view of the absence of clear and specific reasoning in the impugned SCN and which could be read as justifying the invocation of section 74, we find ourselves unable to sustain the impugned SCN for a tax period that had already been assessed by the GST authorities or to countenance the SCN as operating as a fetter on the grant of refund which was affirmed and recognised by the court in Netgear Technologies India."On the real intent behind the SCN:"We are constrained to observe that the SCN appears to have been issued solely to avoid the inevitable consequences which flow from our decision rendered inter partes in the earlier round of litigation. We are of the firm opinion that a claim for refund cannot be legally or justifiably stalled by the adoption of circuitous means as the present." Cases Cited by the CourtNetgear Technologies India Pvt. Ltd. v. Assistant Commissioner of GST, Delhi East Commissionerate — 2023 SCC OnLine Del 8724 (W.P.(C) No. 10461 of 2022, May 18, 2023)Zones Corporate Solutions Pvt. Ltd. v. Commissioner of Central Goods and Services Tax Delhi East — 2020-VIL-302-DELAlex Tour and Travel Private Limited v. Assistant Commissioner, CGST, Division-Janakpuri — (2024) 122 GSTR 81 (Delhi); 2023 SCC OnLine Del 2709Parity Infotech Solutions Pvt. Ltd. v. Government of NCT of Delhi — (2023) 120 GSTR 30 (Delhi); (2023) 4 HCC (Del) 685HCL Infotech Ltd. v. Commissioner, Commercial Tax — (2025) 141 GSTR 324 (All); 2024 SCC OnLine All 5769Raj Bahadur Narain Singh Sugar Mills Ltd. v. Union of India — (1997) 6 SCC 81; (1996) 88 ELT 24 (SC)Collector of Central Excise v. H.M.M. Limited — 1995 SCC OnLine SC 82; 1995 Supp (3) SCC 322; (1995) 76 ELT 497 (SC) Final VerdictThe writ petition was allowed. The impugned SCN dated August 3, 2024 was quashed and set aside. The refund claim of the petitioner was directed to be attended to and disposed of forthwith, subject to any orders that may be passed on any appeal the respondents may institute against.
BackgroundThe petitioner, a transport firm, was issued a scrutiny notice under Section 61 of the GST Act on 30.11.2023 pointing out discrepancies in its returns. The petitioner remained unaware of the notice as it was uploaded only on the departmental portal and accordingly filed no reply. A subsequent show cause notice under Section 73 of the Act was issued on 27.01.2024, requiring reply by 27.02.2024 and fixing personal hearing on 20.02.2024. The petitioner again did not respond. Consequently, the Deputy Commissioner, State Tax, Sector-3, Sonbhadra passed a demand order dated 27.04.2024 under Section 73(9) of the Act, creating a tax liability of ₹85,84,759/-. A rectification application filed by the petitioner under Section 161 of the Act was also rejected vide order dated 25.10.2024. Both orders were challenged by way of the present writ petition.Court Observations (Verbatim)Para 7: "A bare look at the order impugned dated 27.04.2024 passed under Section 73(9) of the Act reveals that the same only makes reference to issuance of two notices, the fact that they have not been responded to, and a demand has been raised."Para 8: "The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no.2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order."Final VerdictThe writ petition was allowed. The demand order dated 27.04.2024 was quashed and set aside. The matter was remanded back to the Deputy Commissioner, State Tax, Sector-3, Sonbhadra, with a direction to afford the petitioner an opportunity to file a reply to the Section 73 show cause notice within four weeks, followed by a personal hearing, and thereafter pass a fresh order in accordance with law.👍 In favour of the AssesseeCases / Provisions ReferredNo case laws cited by the Court. The following statutory provisions of the GST Act, 2017 were referred to:Section 61 — Scrutiny of ReturnsSection 73 — Determination of tax not paid / short paid (Show Cause Notice)Section 73(9) — Order of demand after adjudicationSection 75(6) — General provisions relating to determination of tax: requirement to set out relevant facts and basis of decision in the orderSection 161 — Rectification of errors apparent on the face of record
Hari Shanker Transport v. Commissioner of Commercial Tax U.P. Lucknow & Anr. 11-03-2025
BackgroundThe petitioner, a transport firm, was issued a scrutiny notice under Section 61 of the GST Act on 30.11.2023 pointing out discrepancies in its returns. The petitioner remained unaware of the notice as it was uploaded only on the departmental portal and accordingly filed no reply. A subsequent show cause notice under Section 73 of the Act was issued on 27.01.2024, requiring reply by 27.02.2024 and fixing personal hearing on 20.02.2024. The petitioner again did not respond. Consequently, the Deputy Commissioner, State Tax, Sector-3, Sonbhadra passed a demand order dated 27.04.2024 under Section 73(9) of the Act, creating a tax liability of ₹85,84,759/-. A rectification application filed by the petitioner under Section 161 of the Act was also rejected vide order dated 25.10.2024. Both orders were challenged by way of the present writ petition.Court Observations (Verbatim)Para 7: "A bare look at the order impugned dated 27.04.2024 passed under Section 73(9) of the Act reveals that the same only makes reference to issuance of two notices, the fact that they have not been responded to, and a demand has been raised."Para 8: "The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no.2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order."Final VerdictThe writ petition was allowed. The demand order dated 27.04.2024 was quashed and set aside. The matter was remanded back to the Deputy Commissioner, State Tax, Sector-3, Sonbhadra, with a direction to afford the petitioner an opportunity to file a reply to the Section 73 show cause notice within four weeks, followed by a personal hearing, and thereafter pass a fresh order in accordance with law.👍 In favour of the AssesseeCases / Provisions ReferredNo case laws cited by the Court. The following statutory provisions of the GST Act, 2017 were referred to:Section 61 — Scrutiny of ReturnsSection 73 — Determination of tax not paid / short paid (Show Cause Notice)Section 73(9) — Order of demand after adjudicationSection 75(6) — General provisions relating to determination of tax: requirement to set out relevant facts and basis of decision in the orderSection 161 — Rectification of errors apparent on the face of record
Background. Max Ventures and Industries Limited merged into Max Estates Limited pursuant to an NCLT order dated 21.07.2023. An application for surrender of registration was filed on 02.11.2023 and the registration was suspended with effect from 10.10.2023. Three orders under Section 73(9) for FY 2017-18, 2018-19 and 2019-20 were nonetheless passed in the name of the merged-out company.Observations of the Court. It was undisputed that before the three assessment orders were passed, the transferor company stood merged with the petitioner, so the orders were passed against a non-existent company. The Court held that the conclusion of the Supreme Court in Maruti Suzuki India Ltd. — that issuance of notice to a non-existent entity is fundamentally at odds with the principle that the amalgamating entity ceases to exist upon an approved scheme — applies equally outside the income-tax context.The revenue’s reliance on Section 87 to contend that proceedings may continue against the transferor company despite the merger was rejected, the Court following the Delhi High Court in HCL Infosystems Ltd., which had taken note of Section 87 and held that the provision does not enable continuation of proceedings against a non-existent entity.Final verdict. The writ petition was allowed and all three orders dated 29.11.2023, 27.04.2024 and 26.08.2024 under Section 73(9) were quashed and set aside, with liberty to the respondents to pursue proceedings against the appropriate entity as permissible in law.
Max Estates Limited v. Union of India and Another 05-03-2025
Background. Max Ventures and Industries Limited merged into Max Estates Limited pursuant to an NCLT order dated 21.07.2023. An application for surrender of registration was filed on 02.11.2023 and the registration was suspended with effect from 10.10.2023. Three orders under Section 73(9) for FY 2017-18, 2018-19 and 2019-20 were nonetheless passed in the name of the merged-out company.Observations of the Court. It was undisputed that before the three assessment orders were passed, the transferor company stood merged with the petitioner, so the orders were passed against a non-existent company. The Court held that the conclusion of the Supreme Court in Maruti Suzuki India Ltd. — that issuance of notice to a non-existent entity is fundamentally at odds with the principle that the amalgamating entity ceases to exist upon an approved scheme — applies equally outside the income-tax context.The revenue’s reliance on Section 87 to contend that proceedings may continue against the transferor company despite the merger was rejected, the Court following the Delhi High Court in HCL Infosystems Ltd., which had taken note of Section 87 and held that the provision does not enable continuation of proceedings against a non-existent entity.Final verdict. The writ petition was allowed and all three orders dated 29.11.2023, 27.04.2024 and 26.08.2024 under Section 73(9) were quashed and set aside, with liberty to the respondents to pursue proceedings against the appropriate entity as permissible in law.
Facts :The petitioner challenged an assessment order dated 31.10.2023 passed under Section 73(9) of the GST Act raising tax, interest and penalty demand. It contended that no show cause notice was effectively communicated, as notices were uploaded on the GST portal under the heading “additional notices and orders” instead of “notices and orders”. Due to this, the petitioner remained unaware and could not file any reply. The petitioner relied on portal screenshots to demonstrate improper placement of notices.Court Decision:The Court held that the petitioner had made out a case of improper service of notice. It observed that although Section 169 permits service through the common portal, the manner of uploading must ensure that notices are effectively communicated. Since the respondents failed to establish that notices were properly placed under the correct heading and the petitioner’s claim remained unrebutted, the impugned assessment order and demand were set aside. The matter was remanded with direction to allow the petitioner to file reply and thereafter pass a fresh order after hearing.Cases Referred:Anhad Impex v. Assistant Commissioner, Ward 16Ola Fleet Technologies Pvt. Ltd. v. State of U.P.Sudarshan Beopar Company Limited v. Union of India
Lord Vishnu Construction Pvt. Ltd. v. Union of India & Ors. 03-03-2025
Facts :The petitioner challenged an assessment order dated 31.10.2023 passed under Section 73(9) of the GST Act raising tax, interest and penalty demand. It contended that no show cause notice was effectively communicated, as notices were uploaded on the GST portal under the heading “additional notices and orders” instead of “notices and orders”. Due to this, the petitioner remained unaware and could not file any reply. The petitioner relied on portal screenshots to demonstrate improper placement of notices.Court Decision:The Court held that the petitioner had made out a case of improper service of notice. It observed that although Section 169 permits service through the common portal, the manner of uploading must ensure that notices are effectively communicated. Since the respondents failed to establish that notices were properly placed under the correct heading and the petitioner’s claim remained unrebutted, the impugned assessment order and demand were set aside. The matter was remanded with direction to allow the petitioner to file reply and thereafter pass a fresh order after hearing.Cases Referred:Anhad Impex v. Assistant Commissioner, Ward 16Ola Fleet Technologies Pvt. Ltd. v. State of U.P.Sudarshan Beopar Company Limited v. Union of India
Facts:The petitioner challenged Order-in-Original No.04/2025-GST ADC dated 06.01.2025 and the consequential rectification order dated 30.04.2025 passed for the period July 2017 to March 2023. The petitioner contended that the department issued a single show cause notice and passed a single order covering multiple financial years, which is contrary to the scheme of the GST Act.Court Decision:The Court held that under the GST Act, show cause notices must be issued based on the “tax period”. Where the assessment is based on annual returns, the relevant tax period corresponds to the respective financial year.The Court relied on its earlier decision dated 21.07.2025 in a batch of cases holding that show cause notices cannot be clubbed for more than one financial year. Since the impugned order covered the period from July 2017 to March 2023 through a single proceeding, the action was held to be without jurisdiction.Accordingly, the Court quashed the assessment order dated 06.01.2025 and the rectification order dated 30.04.2025 and granted liberty to the department to initiate separate proceedings for each financial year in accordance with law.Cases Referred by Court: W.P. Nos.29716 of 2024 etc. batch (Madras High Court, Order dated 21.07.2025)
Instakart Services Private Limited vs The Additional Commissioner, Chennai South Commissionerate 22-02-2025
Facts:The petitioner challenged Order-in-Original No.04/2025-GST ADC dated 06.01.2025 and the consequential rectification order dated 30.04.2025 passed for the period July 2017 to March 2023. The petitioner contended that the department issued a single show cause notice and passed a single order covering multiple financial years, which is contrary to the scheme of the GST Act.Court Decision:The Court held that under the GST Act, show cause notices must be issued based on the “tax period”. Where the assessment is based on annual returns, the relevant tax period corresponds to the respective financial year.The Court relied on its earlier decision dated 21.07.2025 in a batch of cases holding that show cause notices cannot be clubbed for more than one financial year. Since the impugned order covered the period from July 2017 to March 2023 through a single proceeding, the action was held to be without jurisdiction.Accordingly, the Court quashed the assessment order dated 06.01.2025 and the rectification order dated 30.04.2025 and granted liberty to the department to initiate separate proceedings for each financial year in accordance with law.Cases Referred by Court: W.P. Nos.29716 of 2024 etc. batch (Madras High Court, Order dated 21.07.2025)
Facts:The respondent-assessee challenged a show cause notice dated 29.07.2024 issued under Section 74 of the CGST Act demanding tax, interest and penalty for the financial years 2017-18 to 2023-24 through a single consolidated notice. The Single Judge permitted the authority to pass an order for FY 2017-18 within limitation and directed separate adjudication orders for the remaining years. The department filed a writ appeal challenging that direction.Court Decision:The Division Bench held that under Section 74 of the CGST Act the determination of tax is linked to the financial year to which the alleged tax evasion relates, and the limitation for passing adjudication orders is computed separately for each financial year from the due date of filing the annual return.The Court held that although the statute does not expressly prohibit issuance of a consolidated show cause notice, the proper officer should ideally issue separate notices for different financial years because the limitation for adjudication differs for each year. A consolidated notice covering several financial years could prejudice the assessee by curtailing the effective time available for defence and evidence.Finding no error in the reasoning of the Single Judge, the Court dismissed the writ appeal and upheld the direction permitting separate adjudication orders for each financial year after granting opportunity of hearing.Cases Referred by Court: CIT v. Simon Carves Ltd., (1976) 4 SCC 435
Joint Commissioner (Intelligence & Enforcement) & Anr. vs Lakshmi Mobile Accessories 05-02-2025
Facts:The respondent-assessee challenged a show cause notice dated 29.07.2024 issued under Section 74 of the CGST Act demanding tax, interest and penalty for the financial years 2017-18 to 2023-24 through a single consolidated notice. The Single Judge permitted the authority to pass an order for FY 2017-18 within limitation and directed separate adjudication orders for the remaining years. The department filed a writ appeal challenging that direction.Court Decision:The Division Bench held that under Section 74 of the CGST Act the determination of tax is linked to the financial year to which the alleged tax evasion relates, and the limitation for passing adjudication orders is computed separately for each financial year from the due date of filing the annual return.The Court held that although the statute does not expressly prohibit issuance of a consolidated show cause notice, the proper officer should ideally issue separate notices for different financial years because the limitation for adjudication differs for each year. A consolidated notice covering several financial years could prejudice the assessee by curtailing the effective time available for defence and evidence.Finding no error in the reasoning of the Single Judge, the Court dismissed the writ appeal and upheld the direction permitting separate adjudication orders for each financial year after granting opportunity of hearing.Cases Referred by Court: CIT v. Simon Carves Ltd., (1976) 4 SCC 435
Case Facts:The petitioner challenged an order dated 28 January 2025 passed under Section 83 of the MGST Act attaching its bank account. The department alleged wrongful availment of Input Tax Credit (ITC) under Section 17(5)(d) and initiated proceedings under Section 67. The petitioner contended that the issue was purely legal and relied on judicial precedent and CBIC guidelines. It was argued that the attachment severely impacted business operations and lacked proper justification. Court Decision:The Court held that the power under Section 83 is drastic and must be exercised strictly in accordance with statutory conditions. It observed that no material was placed on record to show that the petitioner was likely to defeat the demand or that attachment was necessary to protect revenue. The impugned order was found to be based on insufficient reasoning and amounted to a colourable exercise of power. Upon instructions, the State agreed to withdraw the attachment order. The Court set aside the order and directed immediate operation of the bank account. Cases Referred by Court:Radha Krishan Industries vs State of Himachal PradeshSafari Retreats (Supreme Court judgment referred in context of ITC eligibility)
Goisu Realty Pvt. Ltd. vs State of Maharashtra & Ors. 31-01-2025
Case Facts:The petitioner challenged an order dated 28 January 2025 passed under Section 83 of the MGST Act attaching its bank account. The department alleged wrongful availment of Input Tax Credit (ITC) under Section 17(5)(d) and initiated proceedings under Section 67. The petitioner contended that the issue was purely legal and relied on judicial precedent and CBIC guidelines. It was argued that the attachment severely impacted business operations and lacked proper justification. Court Decision:The Court held that the power under Section 83 is drastic and must be exercised strictly in accordance with statutory conditions. It observed that no material was placed on record to show that the petitioner was likely to defeat the demand or that attachment was necessary to protect revenue. The impugned order was found to be based on insufficient reasoning and amounted to a colourable exercise of power. Upon instructions, the State agreed to withdraw the attachment order. The Court set aside the order and directed immediate operation of the bank account. Cases Referred by Court:Radha Krishan Industries vs State of Himachal PradeshSafari Retreats (Supreme Court judgment referred in context of ITC eligibility)
