Assistant Commissioner of State Tax Archives - Tax Heal

Best Judgment Assessment Stands Deemed Withdrawn Upon Late Return Filing with Tax, Interest, and Late Fee

Ashwani Kumar — Thu, 03 Sep 2026 07:05:18 +0000

Best Judgment Assessment Stands Deemed Withdrawn Upon Late Return Filing with Tax, Interest, and Late Fee

Issue

Whether a best judgment assessment order passed under Section 62 for non-filing of returns stands deemed withdrawn when the assessee subsequently files the return and pays the entire tax, interest, and late fee beyond the thirty-day period from the service of the assessment order.

Facts

Assessee & Period: The petitioner is a proprietary concern registered under the APGST Act, relating to the period of January 2023.
Non-Filing & Best Judgment Order: The petitioner failed to file its GSTR-3B return within the prescribed time, leading Respondent No. 1 to pass a best judgment assessment order under Section 62 raising a GST demand with interest.
Subsequent Compliance: The petitioner subsequently filed both GSTR-1 and GSTR-3B returns and discharged the entire tax liability along with applicable interest and late fees.
Delayed Filing: The filing of returns and payment of dues took place beyond the statutory period of thirty days from the service of the best judgment assessment order.

Decision

Held, yes; although the petitioner did not furnish the return within thirty days of the assessment order, the entire tax, interest, and late fees were duly paid while filing the return.
Following the binding Division Bench precedent in Brothers Engineering and Errectors Ltd. v. State of Andhra Pradesh, best judgment assessment orders stand deemed to be withdrawn once returns are filed—whether within the prescribed time or beyond it—along with payment of late fees.
Consequently, the assessment order dated 17.04.2023 stands deemed withdrawn in law.
Revenue authorities cannot initiate or continue any recovery proceedings for tax and dues arising out of the withdrawn assessment order [Para 10].
Verdict: Decided in favour of the assessee.

Key Takeaways

Deemed Withdrawal of Best Judgment Assessment: Payment of full tax, interest, and late fees alongside return submission invalidates the best judgment assessment, even if filed after the initial 30-day window.
Acceptance of Late Fee Cures Delay: When the GST portal accepts the return filed beyond thirty days upon payment of prescribed late fees under Section 47, the benefit of deemed withdrawal under Section 62(2) automatically applies.
Cessation of Recovery Proceedings: Once a Section 62 assessment order stands deemed withdrawn by operation of law, any pending or initiated recovery actions based on that order become legally unmaintainable.

HIGH COURT OF ANDHRA PRADESH

Siva Electricals

Assistant Commissioner of State Tax

Ninala Jayasurya and T.C.D. Sekhar, JJ.

WRIT PETITION No. 17618 of 2026^†

JULY 3, 2026

Anil Kumar Bezawada for the Petitioner.

ORDER

Ninala Jayasurya, J. – Heard learned counsel for the petitioner, who appeared through online. Also heard Mr. R Kalyan Chakravarthy, learned Government Pleader for Commercial Tax, representing respondent Nos.1 and 2.

2. The present writ petition is filed seeking to quash the proceedings of respondent No.1 dated 17.04.2023 and demand of Rs.12,61,060/- towards GST along with interest on various grounds.

3. The petitioner, a Proprietary concern, registered under the A.P.G.S.T Act, 2017 vide GSTIN:37DCWPS0612F2ZA could not file GSTR-3B return for January, 2023 within the statutory time limit specified under Section 39. Under the said circumstances, respondent No.1 passed Assessment Order dated 17.04.2023 in question under Section 62 of CGST Act, 2017. Petitioner filed GSTR-1 Statement on 11.05.2023 and also filed GSTR-3B return on 29.05.2023 by paying the entire tax along with applicable late fees.

4. Learned counsel for the petitioner inter alia submits that Section 62(2) of CGST, 2017 which provides for filing of return within thirty (30) days from the date of service of Assessment Order was amended vide Notification No.28/2023 – Central Tax dated 31.07.2023 with effect from 01.10.2023 whereby the time limit of thirty days was increased to sixty days. He submits that as the petitioner filed GSTR-3B return of January, 2023 within sixty days from the date of issuance of Assessment Order in question by paying the interest and late fee, the writ petition deserves to be allowed in terms of the orders of this Court in Brothers Engineering and Errectors Ltd. v. State of Andhra Pradesh 111 GST 611/101 GSTL 341 (Andhra Pradesh)/(2025) 34 Centax 39 (A.P.), etc. He also places reliance on the latest decision of this Court Indubaala Enterprises LLP v. Deputy Commissioner [W.P. Nos. 31323, 31324 and 31330 of 2025, dated 26-11-2025] & etc., and seeks to allow the writ petition.

5. On the other hand, learned Government Pleader for Commercial Tax while refuting the said submissions contends that as the petitioner has not filed the return within the extended time as contemplated under Section 62(2) of CGST Act, it is not entitled for the relief sought for.

6. This Court has considered the submissions made and perused the material on record.

7. Admittedly, petitioner failed to submit the return for January, 2023 within thirty days from the date of Assessment Order. However, subsequently it not only paid the tax liability but also paid late fee for the delay in payment of tax. It is also not disputed that while filing return for the month of January, 2023, interest was paid.

8. In similar circumstances, a Division Bench of this Court in Brothers Engineering and Errectors Ltd. (supra), following earlier judgments of the Hon’ble High Court of Madras in Helmet House v. Deputy State Tax Officer-1, Madurai [2024] (Madras)/(2024) 23 Centax 57 (Mad.) held that the orders of assessment would be deemed to have been withdrawn, once returns had been filed within the prescribed time or beyond prescribed time along with payment of late fee.

9. In the present case, the said decision would apply.

10. Accordingly, this Writ Petition is allowed declaring that the Assessment Order dated 17.04.2023 passed under Section 62 of CGST Act is deemed to have been withdrawn and no steps for recovery can be initiated or continued for recovery of the tax and dues raised under the aforesaid order of assessment. No costs. Miscellaneous petitions pending, if any, shall stand closed.

Best Judgment Assessment Orders Stand Deemed Withdrawn Upon Furnishing Returns and Remitting Dues Under Section 62(2)

Ashwani Kumar — Sat, 29 Aug 2026 09:51:02 +0000

Best Judgment Assessment Orders Stand Deemed Withdrawn Upon Furnishing Returns and Remitting Dues Under Section 62(2)

Issue

Whether best judgment assessment orders passed under Section 62 of the APGST/CGST Act stand deemed withdrawn when the assessee subsequently furnishes GSTR-3B returns along with tax, interest, and late fees, and explains the delay in filing.

Facts

Non-Filing of Returns: The petitioner, a registered person under APGST, failed to file GSTR-3B returns for the periods March 2024, April 2024, and August 2024.
Best Judgment Assessment: Due to the non-filing of returns within the statutory timeframe, the Department passed assessment orders under Section 62 dated 22.05.2024, 14.06.2024, and 01.11.2024.
Subsequent Compliance: The petitioner subsequently filed the GSTR-3B returns for all three default months and paid the full tax liability along with applicable interest and late fees.
Reason for Delay: The petitioner explained that the delay in filing the August 2024 return occurred because its GST registration had been cancelled retrospectively and was only later revived upon successful appeal.
Writ Petition: The petitioner approached the court seeking a declaration that the assessment orders were deemed withdrawn under Section 62(2) following complete compliance.

Decision

Section 62(2) mandates the deemed withdrawal of best judgment assessment orders passed under Section 62 once valid returns are furnished by the assessee.
The petitioner successfully satisfied all statutory preconditions by submitting the returns and remitting the requisite tax, interest, and late fees.
Since the delay in filing the August 2024 return was satisfactorily explained due to the interim cancellation and subsequent revival of GST registration, the delay was condoned to give full effect to Section 62(2).
Consequently, the assessment orders dated 22.05.2024, 14.06.2024, and 01.11.2024 were held to be deemed withdrawn, barring the Department from initiating recovery proceedings under those orders.
The issue was decided in favour of the assessee.

Key Takeaways

Automatic Benefit of Section 62(2): Furnishing valid GSTR-3B returns along with tax, interest, and late fee payments triggers the statutory mechanism under Section 62(2), rendering original best judgment assessment orders inoperative.
Condonation of Reasonable Delay: Administrative or procedural delays in filing returns—such as those arising from registration cancellation and appellate restoration—warrant condonation to ensure benefit under Section 62(2).
Bar on Revenue Recovery: Once Section 62(2) is satisfied, tax authorities lose jurisdiction to enforce demands or initiate recovery actions based on the superseded best judgment assessment orders.

HIGH COURT OF ANDHRA PRADESH

Surya Sreebhavani Infrastructure (P.) Ltd.

Assistant Commissioner of State Tax

R RAGHUNANDAN RAO and T.C.D. SEKHAR, JJ.

WRIT PETITION NO. 12881 of 2026

MAY 6, 2026

R. Raghunandan Rao, J.-Heard Sri A. Sarveswar Rao, learned counsel for the petitioner and the learned Government Pleader for Commercial Tax appearing for the respondents.

2. The petitioner, who is a registered person, had not filed his returns for the months of March, April & August-2024. Consequently, the assessment orders under Section 62 of the Andhra Pradesh Goods & Service Tax Act, 2017 [for short “the Act, 2017”] came to be passed in relation to these periods. Thereafter, the petitioner filed his GSTR-3B returns and paid the tax, interest and late fee for taking the said returns on file.

3. The learned Government Pleader for Commercial Tax appearing for the respondents, on instruction, submits that the returns have been filed and no dues remain.

4. The details of these orders and payments are given below the table itself.

Month	Date of order	Total tax liability as per order in Rs.	Date of GSTR-3B	Tax	Interest	Late fee paid	No of day from date of order till GSTR-3B
Mar’2024	23.05.24	1,17,443	28.09.24	1,67,882	16,009	2,000	128
Apr’2024	14.06.24	1,17,444	29.09.24	1,78,402	10,038	2,000	106
Aug’2024	01.11.24	2,41,398	07.07.25	1,72,906	12,067	5,000	248 effective number of days shall be 11 days.

5. Sri A. Sarveswar Rao, learned counsel for the petitioner would submit that the delay in the filing of the GSTR-3B returns was also on account of the cancellation of the registration of the petitioner on 20.03.2025 with effect from 31.07.2024. It is contended that it is only after the cancellation of the registration had been revoked by the appellate authority on 26.06.2025 that the petitioner was able to deposit the remaining tax interest and late fee.

6. Section 62(2) of the Act, 2017, stipulates that any order of assessment passed under Section 62 of the Act, 2017, would be deemed to have been withdrawn upon necessary returns being filed by the registered person, along with payment of tax, interest and late fees. In the present case, the petitioner has taken the necessary steps. However, the delay in the filing of the returns for the month of August-2024 has been explained and as such, the said delay requires to be condoned.

7. In view of the aforesaid observations, this Writ Petition is disposed of by declaring that the orders of assessment dated 22.05.2024, 14.06.2024 and 01.11.2024 shall be deemed to have been withdrawn and the respondents cannot recover any tax on account of these assessment orders. There shall be no order as to costs.

As a sequel, pending miscellaneous applications, if any, shall stand closed.

Writ petition against GST assessment and rectification orders dismissed due to availability of efficacious alternative appellate remedy

Ashwani Kumar — Thu, 06 Aug 2026 10:30:08 +0000

Writ petition against GST assessment and rectification orders dismissed due to availability of efficacious alternative appellate remedy

Issue

Whether a writ petition challenging an assessment order and a rectification order on grounds of notice defects and limitation should be entertained when an efficacious alternative statutory appellate remedy is available.

Facts

For FY 2021-22, the Assistant Commissioner issued Form GST DRC-01 along with an annexure detailing a turnover variance.
The discrepancy arose from undisclosed turnover that appeared in the Works and Accounts Management Information System.
An Order-in-Original was passed raising a tax demand, which was subsequently followed by a Rectification Order.
The petitioner, a registered GST taxpayer, filed a writ petition challenging both the Order-in-Original and the Rectification Order.
The petitioner contended that no proper show cause notice was served beyond the summary in Form GST DRC-01 and that the rectification order was time-barred.
The Revenue submitted that the annexure to DRC-01 fully apprised the petitioner of the allegations and that efficacious statutory remedies were available under the Act.

Decision

Notice Defect Not Jurisdictional: A mere defect in a notice does not vitiate jurisdiction unless it goes to the root of the matter or causes a fundamental breach of principles of natural justice.
Adequate Notice Served: The annexure attached to Form GST DRC-01 sufficiently made the discrepancy known to the petitioner.
Alternative Statutory Remedy Must Be Exhausted: Disputes regarding factual discrepancies in turnover figures, procedural objections, and limitation are properly examinable by the Appellate Authority or the GST Appellate Tribunal (GSTAT).
Outcome: The High Court declined to exercise writ jurisdiction and dismissed the petition, granting liberty to the petitioner to pursue statutory appellate remedies (decided in favor of the Revenue).

Key Takeaways

Exhaustion of Alternative Remedies: High Courts will not entertain writ petitions under Article 226 when efficacious statutory appellate remedies under Section 107 or Section 112 are available to resolve disputes of fact and law.
Sufficiency of DRC-01 Annexures: Service of a summary in Form GST DRC-01 along with detailed annexures satisfies the requirement of informing the taxpayer of allegations, preventing claims of complete lack of notice.
Forum for Fact-Finding: Technical objections regarding return-figure discrepancies and procedural limitation periods must be raised before statutory appellate authorities rather than through extraordinary writ jurisdiction.

HIGH COURT OF ORISSA

Ritesh Mitra

Assistant Commissioner of State Tax

Harish Tandon, CJ.
and MURAHARI SRI RAMAN, J.

WP(C) No. 12141 of 2026

MAY 18, 2026

Jaish Joshi, Adv. for the Petitioner. Sunil Mishra, Standing Counsel for the Respondent.

ORDER

1. Assailed in the writ petition are the Order dated 5^th August, 2024 passed under Section 74 of the Central Goods and Services Tax Act, 2017 and the Odisha Goods and Services Tax Act, 2017 (Collectively, “GST Act”) pertaining to tax periods from 01.04.2021 to 31.03.2022 (Annexure-2) read with Rectification Order dated 7^th March, 2026 by the Assistant Commissioner of State Tax, Bargarh Circle, Sambalpur, on the grounds inter alia that without issuing Show Cause Notice for initiation of proceeding under Section 74, the final order raising demand could not have been passed and the Rectification Order under Section 161 being kept passed keeping the application for more than one and half years, the order impugned is barred by limitation.

2. It is submitted by the learned counsel for the petitioner that Order-in-Original dated 5^th August, 2024 passed by the Assistant Commissioner of State Tax, Bargarh Circle, Sambalpur, cannot be sustained in the eye of law inasmuch as it has been passed without serving Show Cause Notice on the petitioner. Therefore, there is no initiation of proceeding under Section 74 of the GST Act in the eye of law. Arguments are expanded by submitting that mere service of Summary of Show Cause Notice dated 17^th February, 2024 would not suffice to invoke jurisdiction under Section 74 of the GST Act. Contending that the authority having not applied conscientious mind by adhering to the statutory mandate the orders impugned are liable to be quashed.

3. Vehemently opposing entertainment of writ petition against the orders impugned, challenge against which is the domain for the authorities conferred with the power under the GST Act and the Rules framed thereunder, Mr. Sunil Mishra, learned Standing Counsel appearing for the CT & GST Organization would submit that the Order-in-Original as well as the Rectification Order has been passed having due regard to the statutory provisions. Drawing attention of this Court to Annexure-1, i.e., Notice in Form GST-01 it is submitted that the Annexure appended to said notice clearly reveals the allegation/objection to be met by the petitioner. This annexure with precision made it known to the petitioner that in the returns furnished for the tax periods 2021-22 the taxable person concealed to disclose certain turnover though the amount is reflected in the Works and Accounts Management Information System.

4. Heard Mr. Jaish Joshi, learned counsel for the petitioner and Mr. Sunil Mishra, learned Standing Counsel appearing for the CT & GST Organization.

5. At the outset, it may be apposite to observe that mere defect in the notice may not vitiate jurisdiction to initiate proceeding unless such notice goes to the root of the matter and the order passed thereon is passed without adhering to the principles of natural justice. Lack of jurisdiction to issue notice under Section 74 of the GST Act for finding discrepancy in the figures disclosed in the returns can be considered by the Appellate Authority or, as the case may be, the Goods and Services Tax Appellate Tribunal. This Court on a bare perusal of Annexure appended to the Notice in Form GST DRC-01 finds that discrepancy noticed by the authority concerned has been made known to the petitioner. If the petitioner is aggrieved with such allegation, and could not place before the Adjudicating Authority at the first instance, there is ample scope for him to agitate grievance before the statutory authorities empowered in this behalf for consideration of factual merit of the matter. The statutory authorities are clothed with power to adjudicate not only the facts but also the legal perspective of the subject-matter for which they are created. The nature of grounds as pressed into service by the counsel for the petitioner in the writ petition, in the considered opinion of this Court, can be appreciated by the authorities under the GST Act and the Rules framed thereunder on perusal of connected records of the Authorities below. Therefore, such disputed question of fact is to be left for the appropriate authority to consider.

6. The Hon’ble Supreme Court in Radha Krishan Industries v. State of Himachal Pradesh 86 GST 665/48 GSTL 113 (SC)/(2021) 3 SCR 406 , held, inter alia, that where an effective alternative remedy is available to the aggrieved person, the High Court ought to restrain itself from exercising power under Article 226 of the Constitution of India and when a right is created by statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution of India. It is made clear that this rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.

7. In view of such enunciation of principles by the Hon’ble Supreme Court of India, this Court desists from entertaining this writ petition questioning the legality of the orders assailed herein. However, liberty is granted to the petitioner, if so advised, to approach appropriate forum as available under the Goods and Services Tax Act, 2017 and Rules framed thereunder.

8. With the aforesaid observation, the writ petition along with the pending Interlocutory Application (s), if any, shall stand dismissed.

Section 74 SCN Lacking Specific Reasons and Relied-Upon Documents Is Invalid; Consequential Recovery Quashed

Ashwani Kumar — Sat, 01 Aug 2026 12:49:41 +0000

Section 74 SCN Lacking Specific Reasons and Relied-Upon Documents Is Invalid; Consequential Recovery Quashed

Issue

Whether a Show Cause Notice issued under Section 74(1) that merely reproduces the statutory text without stating specific reasons or providing relied-upon documents is legally valid, and whether consequential recovery orders and bank account attachments can be sustained.

Facts

A Show Cause Notice (SCN) under Section 74(1) was issued to the petitioner alleging tax or Input Tax Credit (ITC) default involving fraud.
The SCN failed to disclose specific grounds or reasons for invoking Section 74 and merely reproduced the statutory text of the provision.
The petitioner requested the relied-upon documents from the department to prepare a defense, but the department failed to supply them.
Due to the non-supply of documents, the petitioner was unable to effectively participate in the subsequent adjudication proceedings.
The Proper Officer proceeded to issue a final recovery order and attached the petitioner’s bank account under Sections 79 and 83, respectively.
The petitioner filed a writ petition before the High Court challenging the Section 74(1) SCN, the consequential recovery order, and the bank account attachment.

Decision

The statutory mandate requiring the Proper Officer to specify distinct and clear reasons under Section 74 was not fulfilled in the SCN.
Non-supply of relied-upon documents violated the principles of natural justice and denied the petitioner a fair opportunity to defend the case, thereby vitiating the entire adjudication.
Such foundational illegality in the initiating SCN cannot be cured at the appellate or revisional stage.
Since the underlying SCN was invalid, all consequential actions—including the recovery order and bank account attachment—lacked legal foundation and were quashed.
The writ petition was allowed in favour of the assessee, and the matter was remitted back to the department with liberty to issue a fresh SCN with specific reasons and proceed in accordance with law.

Key Takeaways

Vague SCN Is Fatally Defective: A Section 74 SCN that merely mechanically reproduces statutory text without detailing specific facts, grounds, or reasons is legally invalid and void ab initio.
Mandatory Supply of Relied-Upon Documents: Failure to supply the documents relied upon by the department violates principles of natural justice and deprives the assessee of a meaningful opportunity of defense.
Incurable Foundational Flaw: A jurisdictional defect in the Show Cause Notice goes to the root of the matter and cannot be cured retroactively at appellate or revisional stages.
Consequential Recovery Invalidated: If the initiating SCN is quashed for procedural and foundational illegality, all subsequent enforcement actions—such as tax recovery and bank account attachments under Sections 79 and 83—automatically collapse.

HIGH COURT OF CHHATTISGARH

N.N. Wires and Steels (P.) Ltd.

Assistant Commissioner of State Tax

Rakesh Mohan Pandey, J.

WPT No. 109 of 2021

JULY 16, 2026

Pankaj Singh, Adv. for the Petitioner. Ms. Aradhana Jain, Dy. Govt. Adv. for the Respondent.

ORDER

1. The petitioner has filed this petition seeking the following relief(s):-

“10.1. Appropriate Writ(s) and/or order(s) and/or direction(s) to the Respondents to serve upon the Petitioner with detailed Show cause Notice with copies of RUD’s in accordance with 74(1) of Chhattisgarh Goods and Services Tax Act, 2017 read with 74(1) of Central Goods and Services Act, 2017 and allow them reasonable opportunity to submit their defense reply with a reasonable opportunity of being heard;

10.2 . Appropriate Writ(s) and/or order(s) and/or direction(s) restraining the Respondent from taking any action in pursuance of impugned Summary of Show Cause Notice issued in Form GST DRC-01 bearing Ref. No. ZD220620013571 dated- 26.06.2020 (Annexure-P/1) and/or matters connected thereto till the pendency of this writ petition before this Hon’ble Court;

10.3 . Appropriate Writ(s) and/or order(s) and/or direction(s) restraining the Respondent from taking any action in pursuance of Order dated-01-09-2020 (Annexure-P/4) and/or matters connected thereto till the pendency of this writ petition before this Hon’ble Court;

10.4 . Appropriate Writ(s) and/or order(s) and/or direction(s) restraining the Respondent from taking any action in pursuance of Letter bearing No. 316, dated-02-02-2021 (Annexure-P/5) ander matters connected thereto till the pendency of this writ petition before this Hon’ble Court;

10.5 . pass any order(s), direction(s), writ(s) or any other relief or relief(s) this Hon’ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice:,

10.6 . Allow the writ with cost;

10.7 . Grant Ad-interim reliefs in terms of prayer under Para. 10.2, 10.3 and 10.4 above. And for this act of kindness, the Petitioner shall, as in duty bound, every pray.”

2. The instant petition has been directed against the notice issued under Section 74 (1) of the CG GST Act, 2017 (for short, the Act, 2017) dated 26.06.2020 (Annexure P/1), subsequent order of recovery issued on 01.09.2020 (Annexure P/4) and order of attachment of bank account dated 02.02.2021 (Annexure P/5).

3. Learned counsel appearing for the petitioner would submit that the notice under Section 74 (I) of the Act, 2017 was not issued in accordance with the provisions of said Section, therefore, said notice, subsequent notice and order are bad in law. He would contend that respondent authorities were under obligation to demonstrate as to how the petitioner failed to pay tax properly. He would pray to allow this petition.

4. On the other hand, Ms. Jain, learned counsel appearing for the respondents would submit that there is efficacious alternative remedy to prefer an appeal under Section 107 of the Act, 2017, therefore, this petition is not maintainable. It is also contended that the petitioner purchased goods from the non-existing dealers and claimed bogus ITC from bogus dealers and when these facts were brought into the notice of the respondent authorities, impugned notice & order were issued. She would submit that though the petitioner applied for relevant documents from the department, but failed to participate in the further proceedings, therefore, the order of recovery and order of attachment were passed against him; thus, she would pray that this petition deserves to be dismissed.

5. Section 74 of the Act, 2017 is reproduced as under:-

Section 74. Determination of tax ²[, pertaining to the period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts.-

(1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice.

(2) The proper officer shall issue the notice under subsection (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order.

(3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax.

(4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice.

(5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.

(6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder.

(7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable.

(8) Where any person chargeable with tax under subsection (1) pays the said tax along with interest payable under section 50 and a penalty equivalent to twenty-five per cent. of such tax within thirty days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded.

(9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order.

(10) The proper officer shall issue the order under subsection (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund.

(11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded.

²[(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.]

Explanation 1.- For the purposes of section 73 and this section,-

(i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132;

(ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under 1[sections 122 and 125] are deemed to be concluded.

Explanation 2.- For the purposes of this Act, the expression “suppression” shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer.

*Enforced w.e.f. 1st July, 2017.

1. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 113 of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for “sections 122, 125, 129 and 130”.

2. Inserted by section 137 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.

6. Bare perusal of the above quoted provision would make it clear that the authority concerned has to specify reasons in accordance with Section 74 of the Act, 2017, but in the notice impugned, the authority concerned reproduced the provision of Section 74 of the Act, 2017. It is also not in dispute that the petitioner approached the department to supply relevant documents but those documents were not provided, therefore, the petitioner could not participate in the subsequent proceedings.

7. Hon’ble Supreme Court in the matter of Ritesh Tewari v. State of U.P (2010) 10 SCC 677 in paragraph 32 has held as under :-

“32. It is settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order. It would be beyond the competence of any authority to validate such an order. It would be ironical to permit a person to rely upon a law, in violation of which he has obtained the benefits.”

8. From bare reading of the above quoted judgment, it is apparent that if something is done illegally from the very beginning, it can not become legal later on. In other words, if provisions of law have not been complied with at the foundational stage, it can not be rectified at appellate stage or revisional stage.

9. As the notice under Section 74 of the Act, 2017 was not issued strictly in accordance with law and documents were not supplied to the petitioner to defend his case, subsequent order of recovery and attachment of bank account cannot be held valid. Accordingly, this petition is allowed and the impugned notices & /attachment order are hereby quashed.

10. The matter is remitted back to the authorities concerned to issue fresh notice under Section 74 of the Act, 2017 with specific reason and thereafter the competent authorities would be at liberty to take proper decision, if so advised.

Show Cause Notice Issued Without Specific Reasons and Relied-Upon Documents Is Void and Invalidates Recovery

Ashwani Kumar — Thu, 30 Jul 2026 07:31:08 +0000

Show Cause Notice Issued Without Specific Reasons and Relied-Upon Documents Is Void and Invalidates Recovery

Issue

Whether a Show Cause Notice issued under Section 74(1) that merely reproduces statutory text without disclosing specific reasons or supplying relied-upon documents is legally valid, and whether consequential recovery and bank account attachment orders are sustainable.

Facts

Initiation of Proceedings: The proper officer issued a Show Cause Notice (SCN) under Section 74(1) of the CGST/SGST Act alleging fraud, wilful misstatement, or suppression of facts.
Defect in SCN: The SCN lacked specific grounds or factual details and merely reproduced the general language of Section 74.
Denial of Relied-Upon Documents: The petitioner requested copies of the documents relied upon by the department to form its allegations, but the Revenue failed to supply them.
Inability to Defend: Due to the vague SCN and non-supply of relied-upon documents, the petitioner was unable to file an effective reply or participate meaningfully in subsequent adjudication proceedings.
Consequential Actions: The department proceeded to pass a recovery order under Section 79 and issued an order for the attachment of the petitioner’s bank account under Section 83.
Writ Petition: The petitioner filed a writ petition challenging the defective SCN, the recovery order, and the bank account attachment.

Decision

The statutory requirement to specify clear and precise reasons under Section 74 was not fulfilled, making the SCN defective and invalid.
Non-supply of relied-upon documents violated principles of natural justice and denied the petitioner a fair opportunity to defend, thereby vitiating the entire adjudication.
A foundational illegality in issuing the SCN strikes at the root of jurisdiction and cannot be cured or rectified at the appellate or revisional stage.
Since the underlying SCN was invalid, the consequential recovery order and bank account attachment lacked legal foundation and were quashed.
The matter was remitted back to the department with liberty to issue a fresh, specific SCN under Section 74 and proceed in accordance with law. Decided in favor of the assessee / matter remanded.

Key Takeaways

Requirement of Specificity in SCN: A Show Cause Notice under Section 74 cannot be a mere mechanical reproduction of the statutory provision; it must state clear facts, specific allegations, and grounds to enable an effective defense.
Mandatory Supply of Relied-Upon Documents: Failure to supply documents relied upon by the department violates natural justice and invalidates the adjudication proceedings.
Incurable Voidness: Jurisdictional flaws in the SCN undermine the validity of all subsequent steps, rendering consequential recovery and asset attachment actions legally unenforceable.

HIGH COURT OF CHHATTISGARH

N.N. Wires and Steels (P.) Ltd.

Assistant Commissioner of State Tax

Rakesh Mohan Pandey, J.

WPT No. 109 of 2021

JULY 16, 2026

Pankaj Singh, Adv. for the Petitioner. Ms. Aradhana Jain, Dy. Govt. Adv. for the Respondent.

ORDER

1. The petitioner has filed this petition seeking the following relief(s):-

10.5 . pass any order(s), direction(s), writ(s) or any other relief or relief(s) this Hon’ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice:,

10.6 . Allow the writ with cost;

10.7 . Grant Ad-interim reliefs in terms of prayer under Para. 10.2, 10.3 and 10.4 above. And for this act of kindness, the Petitioner shall, as in duty bound, every pray.”

5. Section 74 of the Act, 2017 is reproduced as under:-

(2) The proper officer shall issue the notice under subsection (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order.

²[(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.]

Explanation 1.- For the purposes of section 73 and this section,-

(i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132;

*Enforced w.e.f. 1st July, 2017.

2. Inserted by section 137 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.

7. Hon’ble Supreme Court in the matter of Ritesh Tewari v. State of U.P (2010) 10 SCC 677 in paragraph 32 has held as under :-