GST Archives - Tax Heal https://www.taxheal.com/category/gst Complete Guide for Income Tax and GST in India Wed, 09 Sep 2026 09:48:24 +0000 en-US hourly 1 https://wordpress.org/?v=7.1 GST CASE LAWS 08.09.2026 https://www.taxheal.com/gst-case-laws-08-09-2026.html Wed, 09 Sep 2026 08:08:12 +0000 https://www.taxheal.com/?p=140309 GST CASE LAWS 08.09.2026 Section Case Law Title Brief Summary Citation Relevant Act Section 16 Peekay Industries v. Commissioner of Commercial Taxes GSTR-3B and GSTR-2A mismatches alone cannot be treated as conclusive proof of wrongful ITC availment without enquiring into suppliers or examining reconciliations, and circular verification requirements cannot be applied retrospectively outside their specified… Read More »

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Section Case Law Title Brief Summary Citation Relevant Act
Section 16 Peekay Industries v. Commissioner of Commercial Taxes GSTR-3B and GSTR-2A mismatches alone cannot be treated as conclusive proof of wrongful ITC availment without enquiring into suppliers or examining reconciliations, and circular verification requirements cannot be applied retrospectively outside their specified periods. Click Here Central Goods and Services Tax Act, 2017
Section 30 Dhingra Glass v. Commissioner, Central Goods and Service Tax When a GST registration cancellation appeal is dismissed solely on limitation grounds and the assessee expresses readiness to clear all dues and file pending returns, liberty to apply for revocation should be permitted. Click Here Central Goods and Services Tax Act, 2017
Section 61 Peekay Industries v. Commissioner of Commercial Taxes Final ITC demands confirmed under CGST and SGST heads using separate unverified workings without explaining the abandonment of primary IGST reconciliations are legally unsustainable. Click Here Central Goods and Services Tax Act, 2017
Section 73 Peekay Industries v. Commissioner of Commercial Taxes Confirming demand under CGST and SGST despite replies and reconciliations being confined to IGST—without giving proper opportunity to contest or resolving inconsistencies—is unsustainable. Click Here Central Goods and Services Tax Act, 2017
Section 73 Benny Augustine v. State Tax Officer Composite or consolidated show-cause notices covering multiple financial years for tax or ITC demands not involving fraud are invalid as distinct periods cannot be clubbed together. Click Here Central Goods and Services Tax Act, 2017
Section 79 BVG India Ltd. v. Union of India Garnishee proceedings and recovery notices for interest on delayed payments cannot proceed while the petitioner’s representations disputing liability and computation remain pending and undecided. Click Here Central Goods and Services Tax Act, 2017
Section 107 Innotex (India) (P.) Ltd. v. State of Rajasthan Writ petitions challenging orders where statutory appellate remedies exist will not be entertained simply due to rectification rejections, and assessees must pursue the appeal mechanism. Click Here Central Goods and Services Tax Act, 2017
Section 112 City Lights and Equipments v. State of Meghalaya Disputes involving complex factual evaluations, proper officer jurisdiction, and reliance on seized records must be adjudicated by the GSTAT rather than through writ petitions. Click Here Central Goods and Services Tax Act, 2017
]]> Writ Petition Inappropriate When Functional GSTAT Exists for Resolving Disputed Facts and Unsubstantiated Bias Claims https://www.taxheal.com/h-s-thangkhiew-and-b-bhattacharjee-jj-3.html Wed, 09 Sep 2026 08:06:59 +0000 https://www.taxheal.com/?p=140346 Writ Petition Inappropriate When Functional GSTAT Exists for Resolving Disputed Facts and Unsubstantiated Bias Claims Writ Petition Inappropriate When Functional GSTAT Exists for Resolving Disputed Facts and Unsubstantiated Bias Claims Issue Whether a writ petition under Article 226 can be entertained regarding disputed facts, rate classifications, and unsubstantiated allegations of administrative bias when a functional… Read More »

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Writ Petition Inappropriate When Functional GSTAT Exists for Resolving Disputed Facts and Unsubstantiated Bias Claims

Writ Petition Inappropriate When Functional GSTAT Exists for Resolving Disputed Facts and Unsubstantiated Bias Claims
Issue
Whether a writ petition under Article 226 can be entertained regarding disputed facts, rate classifications, and unsubstantiated allegations of administrative bias when a functional Goods and Services Tax Appellate Tribunal (GSTAT) is available to the taxpayer.
Facts
  • The petitioner, a proprietorship firm trading as M/s City Lights and Equipment, underwent an inspection where rough estimate notepads, estimate books, and cash memos were seized.
  • Following the inspection, Show Cause Notices (SCNs) and an intimation of liability were issued, leading to a final tax demand.
  • The petitioner filed a statutory appeal, which was dismissed by the Additional Commissioner.
  • The petitioner then filed a writ petition seeking relief because the GSTAT was not yet functional at that time, and alleged bias on the grounds that the officer who authorized the inspection was involved in deciding the appeal.
  • The petitioner also disputed the proper officer’s jurisdiction, challenged treating seized rough estimates as suppressed sales, questioned the application of an 18% residuary tax rate, and asserted that recorded invoices, returns, and bank reconciliations were ignored.
  • By the time the writ petition was heard, the State pointed out that the GSTAT had been duly constituted, providing an efficacious alternate appellate forum.
Decision
  • The High Court held that the MGST/CGST Act provides a complete, self-contained appellate mechanism through the Appellate Authority and the GSTAT, which must ordinarily be invoked.
  • The court rejected the claim of bias or breach of natural justice, holding that authorizing an inspection is distinct from performing an adjudicatory function, and no material evidence proved prejudice.
  • The court affirmed that the actions were carried out by officers duly empowered as Proper Officers under the statute and were legally sound.
  • The court ruled that disputes regarding whether seized rough estimates constitute suppressed sales, applicability of tax rates, and reconciliation of returns with bank records involve complex questions of fact that cannot be adjudicated in a writ petition.
  • The writ petition was dismissed, relegating the petitioner to seek remedy before the newly constituted GSTAT.
Key Takeaways
  • Primary Forum is GSTAT: Once the GSTAT is functional, High Courts will refrain from entertaining writ petitions under Article 226 and will relegate taxpayers to the statutory tribunal.
  • Disputed Facts Excluded from Writ: Issues involving factual verification—such as reconciling bank accounts, analyzing seized rough notebooks, or establishing suppressed sales—must be adjudicated before appellate tribunals rather than High Courts.
  • Inspection Authorization Is Not Adjudicative Bias: Mere authorization of an inspection or search by a senior officer does not automatically invalidate subsequent administrative or appellate actions unless concrete material demonstrating personal bias or prejudice is produced.
HIGH COURT OF MEGHALAYA
City Lights and Equipments
v.
State of Meghalaya
H.S. Thangkhiew and B. Bhattacharjee, JJ.
WP(C) No. 264 of 2024
AUGUST  4, 2026
R.B. Phookan, Sr. Adv., S. Sen and M.U. Ahmed, Advs. for the Petitioner. N. Syngkon and J.N. Rynjah, GAs for the Respondent.
JUDGMENT
H.S. Thangkhiew, J. – The petitioner a proprietorship firm under the name of M/s City Lights and Equipments, being aggrieved with demand of Tax/Interest/penalty vide order dated 08.02.2021, and order No. CTA-46/2021/91, dated 26.04.2024 passed by the Additional Commissioner of Taxes, is before this Court by the instant writ petition.
2. The challenge, is essentially based on the ground that the demand by the respondents is on the assumption that the notepads containing the rough estimates seized during an Inspection conducted on 03.06.2020, are not mere slips but are memo of sales. Further ground taken is that the entire proceedings had been initiated at the behest of the Additional Commissioner, and it was he who had authorized the Superintendent of Taxes to conduct inspection, which culminated into the impugned demand and subsequent appeal heard by him.
3. Mr. R.B. Phookan, learned Senior counsel assisted by Mr. S. Sen, learned counsel for the petitioner submits that after the raid and seizure of various documents including rough estimates, notepads, estimate books and cash memos, show cause notices were issued by the respondent No. 4 (Superintendent of Taxes) dated 18.06.2020 and 29.06.2020, alleging tax evasion. Replies and justifications he submits, were provided by the petitioner, but the respondent No. 4 on 24.08.2020, issued an intimation of liability for payment of Rs. 34,26,901.40p as tax plus interest and penalties, based on the seized records and thereafter a final order of demand amounting to Rs. 59,18,980/- was issued on 08.02.2021. The learned Senior counsel submits that though an appeal was filed under Section 107 of the MGST Act, 2017 against the demand, the respondent No. 3, as the Appellate authority by order dated 26.04.2024, rejected the same.
4. Learned Senior counsel submitted that the petitioner had raised several specific objections and had provided detailed financial evidence to refute the allegations of tax evasion, and also that the notices, had only stated tax and interest amounts without specifying the exact turnover, on which the tax was being determined. He further argued that explanation had also been requested, as to why the authorities applied a flat 18% GST rate while the majority of items sold by the petitioner’s firm fall within the 5 to 12% bracket and further that there was no intention to suppress revenue, inasmuch as, bank deposit details for the financial year 2019-20, had been provided. The GST returns he submits, also showed that both cash and cashless sales had been duly accounted for and that the seized rough estimates notepads, contained mere quotations provided to customers with mostly did not result in actual sales. Tax invoices he submits, are issued only when a sale is finalized and that these are the only accurate records of revenue, and further since most of the goods are purchased from outside the State through legitimate e-way bills and the system generated stock reports showing no deficit, there was no possibility of having unaccounted sale revenue.
5. The learned Senior counsel has reiterated that the actual sales were duly accounted for in the GST returns and tax invoices stored in the computer system, and therefore linking the quotation from rough notebooks to actual sales is illegal and not made on a factual basis. He then submitted that the respondents had failed to adhere to the statutory provisions of Section 65 and 66 of the Meghalaya GST Act, 2017, inasmuch as, a huge penalty has been imposed without conducting a fair assessment or stock audit, while at the same time ignoring the statutory records provided by the petitioner, and that based on the authority’s demand the petitioner would have had to make sales of over 4.74 crores, which is impossible and does not tally with the opening and closing of stock records.
6. Learned Senior counsel has also advanced an argument that there has been a violation of the principles of natural justice, inasmuch as, the respondent No. 3, who had authorized the initial inspection had later acted as the Appellate authority which rejected the petitioner’s appeal, which therefore vitiated the proceedings, in spite of the fact that a faceless hearing for fair adjudication had been requested by the petitioner. It has also been submitted that the demand total of Rs. 47,05,688/- later increased to over Rs. 59,18,980/- is arbitrary and perverse, as the said amounts had been demanded without specifying the exact turnover or inspection of actual stocks.
7. Learned Senior counsel has also contended that when a controversy involves a purely legal question rather than disputed question of facts, the High Court could decide the matter even when there is the availability of alternate remedy. In this context, reliance has been placed on the case of Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authorities 2023 SCC OnLine SC 95. Reliance has also been placed on the case of CBI v. V.C. Shukla (SC)/(1998) 3 SCC 410 and Principal Commissioner Income Tax, Shillong v. NEEPCO [IT Appeal No. 2 of 2024, dated 1-3-2024] with regard to entries made in loose sheets that a hypothetical income recorded in the books of account, should not be taxed simply because an entry exists. He lastly argued that at the time of filing of the writ petition, the GST Tribunal was not constituted, but notwithstanding this aspect, he submits, the jurisdiction of this Court under Article 226 is not subject to any restriction, and as such the instant matter can be entertained and appropriate orders passed thereon.
8. On behalf of the State respondents, Mr. N. Syngkon, learned GA has submitted that there is no question of the writ petition being entertained, as there is adequate alternative remedy provided under Section 109 MGST Act, 2017. The Central Government he submits, vide notification dated 31.07.2024, has constituted the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) in New Delhi and State Benches including one in Guwahati, and that vide notification dated 17.09.2025, specific timelines for filing appeals before the GSTAT has been notified. By this notification he submits, 30.06.2026, has been fixed as the final date to file an appeal in cases where the order being appealed against was communicated before 01.04.2026, and for any other orders communicated on or after 01.04.2026, the appeal must be filed before the Appellate Tribunal within 3(three) months from the date the order is communicated. The learned GA then submits that as per Section 117 of the MGST Act, an appeal to the High Court would only be permissible if the matter involves a substantial question of law, while in the instant writ petition he contends, the dispute is factual and not a legal one. Reference has been made to the case of Bikram Singh v. Pr. CIT  (SC)/(SLP (C) No. 31854/2017, dated 29.08.2023) to emphasize the fact that writ jurisdiction cannot be used to bypass statutory machinery. He has further reiterated that no substantial question of law has been raised to warrant exercise of jurisdiction under Article-226, and reliance has been placed in the case of Thansingh Nathmal v. Superintendent of Taxes AIR 1964 SC 1419.
9. On the other aspect, it has been argued that the burden of proof lies on the petitioner to prove that the irregular documents did not translate into actual sales, inasmuch as, under Rule 56 (10) of the MGST Acts and Rules, 2017, any records found at the said premises are presumed to be maintained by the registered person, more so, as it has been claimed by the petitioner that the records are mere rough notes. It has also been submitted that the petitioner has failed to adhere to Section 36 of the MGST Act and Rules, which mandates that every registered person must keep and maintain books of accounts for at least 72 months (6 years) from the due date of the annual return for that year, and therefore the petitioner’s inability to produce coherent historical records, is also a violation of the established statutory requirements. It has also been contended that though the petitioner claims that the tax invoices were maintained electronically, there were not readily available when requested by the officials and the request made for extension, was but a stalling tactic and a violation Rule 48 of the MGST Acts and Rules, 2017, which govern the maintenance of electronic records.
10. The learned GA has also alluded to the other contentions raised by the petitioner and has submitted that the petitioner’s formal reply failed to address the specific questions raised, such as the discrepancies in the seized memos and instead, submitted materials which had no connection to the seized documents. Further it is submitted there is no mention in the seized cash memos with regard to any GST rates or tax components which is a direct violation of Section 33 of the MGST Act. With regard to the levy of 18% rate, he submits that the same was due to the fact that the petitioner did not specify the tax rate on the memos, and as such they were treated as ‘goods not specified’, which falls under Entry No. 453 of the notification dated 29.06.2017, issued by the ERTS Department Government of Meghalaya. The memos which the petitioner claims to be scribblings, he submits, in fact clearly recorded full sale transactions including specific payment methods, such as paid, swipe, cheque and even tracking of old or previous balance. Further, the learned GA has pointed out other discrepancies in cash memos, which has failed to satisfy the claims as made out.
11. On the question of the role of proper officer and enforcement raised by the petitioner it has been argued that the Superintendent of Taxes (Respondent No. 4) under Section 61 of the CGST Act, is the Proper Officer to scrutinize the return and related particulars furnished by a registered person and to verify the same. In this case he submits, as there was no satisfactory explanation as to the discrepancies, the proper officer is authorised to take further action under various Sections of the CGST Act, such as Sections 65, 66, 67, 73 & 74 and that the order of demand issued on 08.02.2021, was a direct consequence of the initial inspection and seizure conducted on 03.06.2020, under Section 67 of the Act. The petitioner he submits failed to take any steps to supply any information to explain the discrepancies or to rectify the returns as allowed by statute. As such he submits on all counts, the petitioner’s case is not sustainable in law.
12. Having heard the learned counsel for the parties, this Court notes that the MGST/CGST Acts, 2017, provide complete self-contained appellate machinery, under Section 107 before the Appellate authority and thereafter under Section 109/117 before the GST Appellate Tribunal (GSTAT), wherein the Principal Seat and Guwahati State Bench, have since been constituted. It is a well settled principle that when a statute itself creates a right and provides a special forum for its enforcement, the machinery so created must ordinarily be resorted to, and recourse be not taken to seek relief under Article-226. In the case cited by the respondent i.e. Thansingh Nathmal (supra), the Supreme Court at Para- 7, a portion of which is extracted hereinbelow held as follows: –
“7. ……The jurisdiction of the High Court under Art. 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the Article. But the exercise of the jurisdiction is discretionary: it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self-imposed limitations. Resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under Art. 226, where the petitioner has an alternative remedy, which, without being unduly onerous, provides an equally efficacious remedy. Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Art. 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit, by entertaining a petition under Art. 226 of the Constitution, the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up.”
13. This Court similarly in the case of Jorabat Shillong Expressway Ltd. v. Union of India 116 GST 493/111 GSTL 165 (Meghalaya)//2026 SCC OnLine Megh 423 declined to entertain the writ petition, wherein the taxpayer had challenged a GST demand questioning the jurisdiction of the officers concerned and the classification and taxability of its services on the ground of availability of alternate remedy when no special grounds on natural justice or jurisdiction could be made out. In the instant case, the petitioner has not been able to show any exceptions to warrant exercise of jurisdiction under Article-226 of the Constitution.
14. The above noted observation has been made in view of the fact that firstly, the allegation of violation of the principles of natural justice has not been established, inasmuch as, the action of the respondent authorities is as per the statute and authorizing an inspection, is distinct from the adjudicatory functioning apart from the fact that no materials have been placed to show any element of bias. Further, the actions of the respondents being taken by the officers duly empowered as “Proper Officer” under Section 2(91) read with Section 3 & 5 of the CGST Act, the same cannot be held to be irregular or illegal. Secondly, the dispute is essentially one of fact and not law, as the issue raised, is whether the seized notepads and cash memos represent actual suppressed sales, or were mere estimates that were not relevant for the purpose of assessment. Added to this is the question as to whether the goods sold fall within the 5 to 12% slab claimed by the petitioner or the residuary 18% slab, applied by the respondents and also whether the bank deposits and GSTR-3B returns, can be reconciled with the seized materials, which to the mind of this Court require examination and appreciation of documentary and testimonial evidence.
15. The judgments placed by the learned counsel for the petitioner i.e. Godrej Sara Lee Ltd. (supra), and NEEPCO (supra) in the circumstances of the instant case which involves disputed facts and not on a pure question of law are distinguishable, and are of no assistance to the case of the petitioner and as such, are not further elaborated upon.
16. In this view of the matter, as the writ petition does not disclose any jurisdictional error, denial of natural justice, or that the issue concerned is a pure question of law, the same is not entertained and stands dismissed, however by allowing the petitioner to take recourse to alternate remedy for appeal under Section 109 of the MGST Act. Needless to add, as the writ petition had been filed when the GSTAT had not been constituted, the delay if any shall be favourably considered by the Tribunal.
]]> Availability of Efficacious Alternate Appellate Remedy Precludes Writ Relief Against GST Orders Passed Without Personal Hearing https://www.taxheal.com/arun-monga-and-ashutosh-kumar-jj-6.html Wed, 09 Sep 2026 07:54:08 +0000 https://www.taxheal.com/?p=140344 Availability of Efficacious Alternate Appellate Remedy Precludes Writ Relief Against GST Orders Passed Without Personal Hearing Availability of Efficacious Alternate Appellate Remedy Precludes Writ Relief Against GST Orders Passed Without Personal Hearing Issue Whether a writ petition challenging an Order-in-Original and a subsequent rectification rejection order can be entertained when the statutory remedy of appeal… Read More »

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Availability of Efficacious Alternate Appellate Remedy Precludes Writ Relief Against GST Orders Passed Without Personal Hearing

Availability of Efficacious Alternate Appellate Remedy Precludes Writ Relief Against GST Orders Passed Without Personal Hearing
Issue
Whether a writ petition challenging an Order-in-Original and a subsequent rectification rejection order can be entertained when the statutory remedy of appeal under Section 107 of the CGST/RGST Act is available to the taxpayer.
Facts
  • The department audited the petitioner’s records for FY 2021-22, issuing Form GST ADT-02 followed by a Show Cause Notice in Form GST DRC-01 proposing tax demand.
  • The Adjudicating Authority passed an Order-in-Original on December 3, 2025, confirming tax, interest, and penalty, and uploaded it on the GST portal.
  • The petitioner claimed lack of knowledge of the order due to a change in their registered accountant and the absence of manual service.
  • On March 3, 2026, the petitioner filed a rectification application seeking a personal hearing. During its pendency, the Electronic Credit Ledger was debited/blocked, and garnishee notices in Form GST DRC-13 were issued to bankers.
  • The rectification application was rejected on April 24, 2026, without granting a personal hearing, prompting the petitioner to file a writ petition seeking to set aside the orders and unblock their accounts.
Decision
  • The High Court held that a statutory appeal before the Appellate Authority under Section 107 was available against both the Order-in-Original and the rectification rejection order.
  • Given the existence of an efficacious alternate statutory remedy, the court declined to entertain the writ petition.
  • The writ petition was dismissed, granting the petitioner liberty to file an appeal within 30 days.
  • The court directed that if the appeal is filed within 30 days, it shall be entertained without raising objections on limitation and decided strictly on merits. All legal contentions were left open.
Key Takeaways
  • Alternate Remedy Bar: High Courts will generally refrain from exercising writ jurisdiction under Article 226 when a statutory appeal under Section 107 of the GST Act is available.
  • Limitation Relief on Dismissal: When relegating a petitioner to an appellate authority, courts often extend time-bound protection against limitation objections to ensure the case is heard on merits.
  • Service via Portal: Orders uploaded on the GST portal are legally valid communications, and claims of non-receipt due to internal administrative changes (e.g., change of accountant) may not bypass statutory appeal routes.
HIGH COURT OF RAJASTHAN
Innotex (India) (P.) Ltd.
v.
State of Rajasthan
Arun Monga and Ashutosh Kumar, JJ.
D.B. Civil Writ Petition No. 15049 OF 2026
AUGUST  10, 2026
Ravi Gupta, Adv. for the Petitioner. Ms. Mahi Yadav, AAG and Ms. Chelsi Agarwal, Adv. for the Respondent.
ORDER
Arun Monga, J. – The petitioner herein, inter alia, seeks quashing of the order dated 03.12.2025 passed under Section 73 of the CGST/RGST Act, 2017, whereby demand of GST amounting to Rs.2,58,55,445/-, interest amounting to Rs.1,69,26,223/- and penalty of Rs.26,31,862/- has been raised against the petitioner, along with the consequential order dated 24.04.2026, rejecting the petitioner’s application for rectification.
2. Brief facts of the case are that the petitioner’s books of accounts, records and returns for the Financial Year 2021-22 were audited by the respondent-department, pursuant to which Form GST ADT-02 dated 01.09.2025 was issued. Thereafter, Form GST DRC-01 dated 18.09.2025 was issued proposing a tax demand of Rs. 2,58,55,445/-, along with applicable interest and penalty. Pursuant thereto, an order under Section 73 of the CGST/RGST Act, 2017 was passed on 03.12.2025, confirming a tax demand of Rs. 2,58,55,445/-, interest of Rs. 1,69,26,223/- and penalty of Rs. 26,31,852/-. The said order was uploaded on the GST portal under the head “Additional Notices and Orders”. The petitioner contends that the order was neither served manually nor supplied in hard copy and that it came to know of the order only when an officer of the respondent-department subsequently informed the petitioner telephonically about the outstanding demand. It is stated that the petitioner’s GST-related affairs were being handled by its accountant, whose email ID and mobile number were registered on the GST portal, but who had left the petitioner’s service by the time the relevant notices and order were issued. Consequently, the petitioner claims to have remained unaware of the proceedings. Upon engaging a new counsel and having the GST portal examined, the petitioner came to know of the order and the demand raised thereunder.
2.1 Thereafter, on 03.03.2026, the petitioner submitted an application under Section 161 of the CGST/RGST Act, 2017 seeking rectification of the order dated 03.12.2025 and specifically sought an opportunity of personal hearing to place on record the relevant reconciliation and supporting material. While the said application was pending consideration, the respondent-department, on 07.04.2026, debited the balance available in the petitioner’s Electronic Credit Ledger and blocked the ledger to the extent of approximately Rs. 4.52 crores. The rectification application was thereafter rejected vide order dated 24.04.2026 on the ground that no error apparent on the face of the record was found, without granting the petitioner the requested opportunity of personal hearing. The petitioner has consequently approached this Court challenging the order dated 03.12.2025 as well as the rectification rejection order dated 24.04.2026. The petitioner states that the statutory appeal against the order dated 03.12.2025 could not be instituted within the prescribed period as the petitioner claims to have acquired knowledge of the order only subsequently, and therefore seeks condonation of the delay in filing the appeal on the aforesaid ground.
2.2 . Respondent No.3 issued Form GST DRC-13 dated 12.05.2026 under Section 79(1)(c) of the CGST/RGST Act, 2017 to the Managers of Punjab National Bank, Delhi and Bank of Baroda, in respect of the petitioner’s bank accounts, directing them to place a hold on Rs.4,54,13,530/- and remit the same towards the demand. It is, therefore, prayed that the order dated 03.12.2025 and the rectification rejection order dated 24.04.2026 be set aside and, in the alternative, the matter be remitted to respondent No.3 for fresh consideration on merits after affording an opportunity of hearing to the petitioner, with consequential directions for removal of the hold/attachment over the petitioner’s bank accounts and unblocking of the Electronic Credit Ledger after re-crediting the amount debited therefrom.
3. In the aforesaid backdrop, we have heard the learned counsels for the parties and perused the record.
4. At the outset, learned counsels for the respondents object to the maintainability of the writ petition herein stating that the alternative remedy as provided under Section 107 of the CGST Act, 2017, has not been availed.
5. Statutory remedy by way of an appeal under Section 107 of the CGST Act, 2017 before the Appellate Authority is provided against the impugned order dated 18.02.2026. Section 107 reads as under:-
“Section 107. Appeals to Appellate Authority.-
(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.
x-x-x-x-x”
6. In view of the aforesaid, we are not inclined to directly entertain the writ petition without the petitioner exhausting its alternate statutory remedy.
7. Accordingly, the present writ petition is dismissed with liberty to seek appropriate statutory remedy of an appeal under Section 107 of the CGST/RGST Act, 2017. In case the appeal is filed within 30 days, the same shall be entertained without raising any objection as to limitations and shall be disposed of on merits with respect to the impugned rectification order dated 24.04.2026 read with Order-in-Original dated 03.12.2025.
8. It is made clear that all issues and contentions raised in the present writ petition are left open to be urged before and adjudicated upon by the appellate authority in accordance with law.
9. Accordingly, the present writ petition stands disposed of.
10. All pending application(s) also stand disposed of.
]]> Garnishee Notices Issued Without Deciding Pending Interest Dispute Representations Are Unsustainable Pending Adjudication https://www.taxheal.com/suman-shyam-and-advait-m-sethna-jj-8.html Wed, 09 Sep 2026 07:47:28 +0000 https://www.taxheal.com/?p=140341 Garnishee Notices Issued Without Deciding Pending Interest Dispute Representations Are Unsustainable Pending Adjudication Issue Whether garnishee proceedings under Form GST DRC-13 can be sustained for recovering interest on delayed tax payments when the petitioner’s detailed representations disputing the computation and lack of Show Cause Notice remain undecided by the tax authorities. Facts The tax authorities… Read More »

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Garnishee Notices Issued Without Deciding Pending Interest Dispute Representations Are Unsustainable Pending Adjudication
Issue
Whether garnishee proceedings under Form GST DRC-13 can be sustained for recovering interest on delayed tax payments when the petitioner’s detailed representations disputing the computation and lack of Show Cause Notice remain undecided by the tax authorities.
Facts
  • The tax authorities (Respondent No. 4) issued garnishee notices in Form GST DRC-13 against the petitioner’s debtors to recover interest on delayed payment for the period FY 2017-18 to FY 2021-22.
  • The petitioner contended that no Show Cause Notice (SCN) was issued and no formal adjudication was conducted to determine the interest liability before initiating recovery actions.
  • The petitioner submitted detailed representations dated August 25, 2023, and October 27, 2023, along with their own interest computations, which remained pending without any decision from the revenue authorities.
  • Despite the pending representations and the dispute over whether interest on self-assessed tax could be adjusted against the Electronic Cash Ledger balance, the authorities initiated garnishee proceedings under Section 79.
Decision
  • The High Court acknowledged that differing judicial views exist on the adjustment of interest against Electronic Cash Ledger balances.
  • The court noted the admitted fact that the petitioner’s representations had not been considered or decided by the authorities.
  • The court held it appropriate to direct the revenue authorities to decide the petitioner’s representations by passing a reasoned order in accordance with the law and relevant judicial precedents.
  • The court directed that no coercive or precipitative steps be taken pursuant to the impugned Form GST DRC-13 notices until a decision is taken on the representations and formally communicated to the petitioner.
  • The petition was disposed of with all merits kept open for the authorities to adjudicate.
Key Takeaways
  • Prior Determination Required: Recovery measures like garnishee notices (DRC-13) under Section 79 should not be precipitously enforced while a taxpayer’s bona fide representations disputing interest computation remain pending.
  • Principles of Natural Justice: Administrative fairness mandates that authorities must consider and decide a taxpayer’s objection through a reasoned order before taking coercive steps.
  • Interim Protection Against Recovery: Courts will grant stay against garnishee proceedings to prevent arbitrary recovery when fundamental procedural steps or interest adjustments are under legal dispute.
HIGH COURT OF BOMBAY
BVG India Ltd.
v.
Union of India
Suman Shyam and Advait M. Sethna, JJ.
WRIT PETITION NO. 673 OF 2024
AUGUST  5, 2026
Bharat Raichandani, Mahesh Raichandani and Bhagrati Sahu, Advs. for the Petitioner. Karan Adik, Sangeeta Yadav, Advs., Smt. Shruti D. Vyas, Addl. GP and A.R. Deolekar, AGP for the Respondent.
ORDER
Advait M. Sethna, J. – The Writ Petition is filed primarily challenging the Garnishee Notices bearing different dates, more particularly, Notices dated 30th March 2023 (“Impugned Notices”). These are issued by Respondent No.4 in FORM GST DRC-13 under Rule 145(1) of the Central Goods and Services Tax Rules (“CGST Rules”) read with Section 79(1)(c) of the Central Goods and Services Tax Act, 2017 (“CGST Act”).
2. Heard. Rule. Rule returnable forthwith, with the consent of the parties.
3. The Petitioner has assailed the Impugned Notices which seek recovery of interest under Section 50 of the CGST/MGST Act, 2017, for the F.Y. 2017-18 to F.Y. 2021-22.
4. Mr. Raichandani, learned counsel for the Petitioner would firstly contend that there is no show-cause notice issued to the Petitioner, neither is there any adjudication of its interest liability, by the Respondents. He would further submit that there is a dispute between the Respondents and Petitioner about computation of interest liability. The Petitioner made representations vide letters dated 25th August 2023 (Exh.- P) and 27th October 2023 (Exh.-R) setting out the requisite details along with the interest computation. However, without any adjudication of the same, the Respondents proceeded to initiate garnishee proceedings against the Petitioner’s debtors.
5. Mr. Raichandani would rely on the following decisions :-
(i) Asstt. Commissioner of CGST & Central Excise v. Daejung Moparts (P.) Ltd. 82 GST 69 (Madras)/W.A. Nos.2127 and 2151 of 2019 dated. 19.12.2019;
(ii) Mahadeo Construction Co. v. Union of India 81 GST 271/36 GSTL 343 (Jharkhand)/2020 SCC OnLine Jhar 1725;
(iii) R.K. Transport (P.) Ltd. v. Union of India 2022 SCC OnLine Jhar 1782;
(iv) Union of India v. LC Infra Projects (P.) Ltd. [2021] 44 GSTL 60 (Karnataka)/2020 SCC OnLine Kar 5093;
(v) Kesoram Industries Ltd. v. Commissioner of Central Tax 100 GST 173/78 GSTL 291 (Telangana);
This in support of his contention that without undertaking adjudication as stipulated under Section 73, 74 of the CGST Act, no recovery proceeding under Section 79 thereof can be initiated, by the Respondents, for recovery of the alleged interest amount.
6. Mr. Raichandani has further relied on the following judgments :-
(i) Arya Cotton Industries v. Union of India 105 GST 191/87 GSTL 353 (Gujarat)/2024 SCC OnLine Guj 3107;
(ii) Vision Distribution (P.) Ltd. v. Commissioner, State GST 34 GSTL 90 (Delhi)/2019 SCC OnLine Del 12136;
He would in the above context submit that once the amount deposited in the Electronic Cash Ledger is in the nature of advance tax and interest under Section 50 of the CGST Act, being compensatory in nature, such interest, can be levied only till the date of such deposit. Once the amount stands credited to the Government Treasury, no further interest can be demanded, merely on the ground of subsequent filing of the Returns.
7. Mr. Raichandani would urge that in light of the law laid down in the aforementioned decisions, the actions of the Respondents culminating in the Impugned Garnishee Notices are illegal and unsustainable.
8. Per Contra, Mr. Adik, the learned counsel for the Respondent Nos. 3 to 5 would primarily submit that mere deposit of money into the Electronic Cash Ledger by the Assessee, does not amount to payment and/or discharge of its tax dues. In this context, Mr. Adik has placed due reliance on the following judgments:-
(1) Megha Engineering & Infrastructures Ltd. v. Commissioner of Central Tax 73 GST 787/26 GSTL 183 (Telangana)/Writ Petition No.44517 of 2018 decided on 18-04-2019.;
(2) RSB Transmissions (India) Ltd. v. Union of India  (Jharkhand)/2022 SCC OnLine Jhar 1788 and;
(3) Sona Enterprises v. State of A.P  (Andhra Pradesh)/2026 SCC OnLine AP 1236.
9. Mr. Adik has placed reliance on the decision of the Orissa High Court in P.K. Ores (P.) Ltd. v. Commissioner of Sales Tax [2022] 92 GST 583/62 GSTL 6 (Orissa)/(2023) 108 GSTR 457. The Court observed that since interest is an integral part of tax which is belatedly paid in respect of self-assessment, Section 80 of Orissa Goods and Services Tax Act, 2017 clearly excludes grant of instalment. There is no scope for the Commissioner of CT & CGST to entertain application for the grant of instalment. Moreover, the interest levied on account of such belated deposit of admitted tax as per self-assessed Returns cannot be allowed to be deposited in instalments. Accordingly, the Assessee shall be liable to pay prescribed interest on the amount due from first day such tax was due to be payable till date tax is paid. In view of the proviso to Section 80, if default occurs in payment of one instalment, the Assessee would be required to deposit the entire outstanding balance payable on the date of default, without further notice. The Commissioner of CGST was, therefore, justified in rejecting the contention of the Assessee to deposit interest levied on belated deposit of admitted tax under self-assessed Returns, furnished in terms of Sections 39, 59, 80 of the OGST/CGST Act read with Rule 158 thereof.
10. Mr. Adik would in the above context submit that the Petitioner’s contentions being contrary to the law as referred to above, do not merit acceptance, in the given factual matrix. However, Mr. Adik has fairly agreed that the Representations of the Petitioner dated 25th August 2023 (Exh.-P) and 27th October 2023 (Exh. – R) remains to be decided by the Respondent No.4. In view thereof, the Court would pass appropriate orders/directions in the given facts and circumstances.
11. We have perused the record and analysed the rival contentions of the learned counsel for the parties before us. The issue that arises for our determination in these proceedings is whether the interest on self-assessed tax pursuant to filing such returns attract adjustment/deductions on account of the amount available in the Petitioner’s Electronic Cash Ledger. Consequently, whether in such fact situation, the Garnishee proceedings initiated by way of the Impugned Notices, would be sustainable in the eyes of law.
12. In the aforesaid backdrop, upon hearing the learned counsel for the parties, we find that there are decisions where differing/contradictory views are taken by Courts on the issues formulated above. However, it is an admitted position that the Representations of the Petitioner dated 25th August 2023 (Exh.-P) and 27th October 2023 (Exh. – R) are not decided and/or adjudicated by the Respondent No.4.
13. In light of the above, in our considered view, it would be prudent to direct the Respondents to decide such Representations of the Petitioner in light of the legal provisions and the applicable judicial pronouncements. Therefore, in our view, the following Order would serve the ends of justice.
ORDER
(i) The Representations of the Petitioner dated 25th August 2023 (Exh.-P) along with another dated 27th October 2023 (Exh.-R) be decided by Respondent No.4 on its own merits and in accordance with law by passing a reasoned order.
(ii) The said/concerned Respondent shall intimate the Petitioner once such decision on the Petitioner’s Representations is taken.
(iii) We clarify that we have not delved into the merits of the rival contentions which in the given factual complexion, are expressly kept open.
(iv) Considering the nature of the issues raised the Respondent No.4 may decide the Representations of the Petitioner as expeditiously as possible and in any event, within six weeks from the uploading of the order.
(v) Needless to clarify that such decision by the concerned Respondent would have a bearing on the Impugned Notices and the actions taken in furtherance thereof. Accordingly, we direct that the Respondents shall not take any precipitative steps pursuant to the Impugned Notices until the decision on the said Representations is taken and intimated to the Petitioner. In the event such decision goes against the Petitioner, in exercise of our discretionary jurisdiction, we direct that the same shall not be acted upon for a further period of 3 weeks thereafter, so as to enable the Petitioner to take appropriate legal steps, in accordance with law.
14. The Petition is Disposed of in the above terms. No Costs.
15. All concerned to act on an authenticated copy of this order.
]]> Consolidated Show Cause Notice Covering Multiple Financial Years Under Section 73 Is Legally Invalid and Liable to Be Quashed https://www.taxheal.com/ziyad-rahman-a-a-j-43.html Wed, 09 Sep 2026 07:42:13 +0000 https://www.taxheal.com/?p=140338 Consolidated Show Cause Notice Covering Multiple Financial Years Under Section 73 Is Legally Invalid and Liable to Be Quashed Issue Whether issuing a single consolidated/composite Show Cause Notice under Section 73 covering multiple financial years (FY 2020-21 to FY 2022-23) is legally sustainable. Facts A consolidated Show Cause Notice (SCN) was issued to the petitioner… Read More »

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Consolidated Show Cause Notice Covering Multiple Financial Years Under Section 73 Is Legally Invalid and Liable to Be Quashed
Issue
Whether issuing a single consolidated/composite Show Cause Notice under Section 73 covering multiple financial years (FY 2020-21 to FY 2022-23) is legally sustainable.
Facts
  • A consolidated Show Cause Notice (SCN) was issued to the petitioner under Section 73 for multiple financial years, specifically spanning FY 2020-21 and FY 2022-23.
  • The petitioner filed a writ petition challenging the validity of the SCN on the ground that a composite notice spanning across different financial years is impermissible.
  • The petitioner relied on binding Division Bench rulings which held that clubbing distinct assessment periods into a single, consolidated SCN is invalid.
Decision
  • The court held that the petitioner’s submission had merit, as the Division Bench had already established that consolidated SCNs covering distinct assessment periods are impermissible under Section 73.
  • In light of established precedent, the court quashed the impugned composite Show Cause Notice.
  • Liberty was granted to the tax authorities to issue separate, year-specific Show Cause Notices for each relevant financial year.
  • The period from the date of the quashed SCN until the receipt of the certified copy of the judgment was ordered to be excluded when computing the limitation period for initiating fresh proceedings.
  • All other substantive contentions on the merits were left open for fresh determination.
Key Takeaways
  • No Composite SCNs: Tax authorities cannot issue a single, consolidated Show Cause Notice under Section 73 for multiple financial years; each financial year constitutes a distinct assessment period requiring a separate notice.
  • Saving Limitation Period: When a composite SCN is quashed on procedural grounds, the period spent during the litigation is excluded from the limitation timeline, allowing the revenue to issue fresh year-wise notices.
  • Binding Precedent: Clubbing distinct periods in a single demand notice violates the statutory framework of Section 73, as affirmed by Division Bench rulings.
HIGH COURT OF KERALA
Benny Augustine
v.
State Tax Officer
ZIYAD RAHMAN A.A., J.
WP(C) NO. 29405 OF 2026
AUGUST  21, 2026
Nirmal Krishnan, Adv. for the Petitioner. Gireesh G., Sr. Govt. Pleader for the Respondent.
JUDGMENT
1. This writ petition is submitted by the petitioner challenging Ext.P2 consolidated Show Cause Notice which was issued by the respondents for multiple financial years namely, 2020-2021 and 2022-2023. The main challenge raised against the sustainability of the same is that, issuance of a composite notice for multiple assessment years was found to be not legally sustainable as per the decision rendered by this Court in oint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories [2025]  108 GST 750/95 GSTL 356 (Kerala)/[2025 KHC OnLine 149] and Tharayil Medicals v. Deputy Commissioner, SGST Department, Thrissur   (Kerala)/ [2025 KHC OnLine 467].
2. After hearing the learned counsel for the petitioner and the learned Standing Counsel for the respondents, I find merits in the said submission, in view of the fact that, such a finding was indeed entered into by the Division Bench of this Court in the decisions referred to above.
3. In such circumstances, in the light principles laid down by this Court in the above referred judgments, an interference is required. Accordingly, this writ petition is disposed of, quashing Ext.P2, granting liberty to the respondent to issue separate notices for the relevant assessment years. However, the period from the date of Ext.P2 till the date of receipt of certified copy of the judgment shall be excluded while computing the period of limitation for initiating fresh proceeding. All the other contentions of the parties are left open.
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