Gauhati HC Quashes GST Order Passed Without Show Cause Notice
Can the department pass a GST Section 73 order without issuing a show cause notice (SCN) or granting a hearing?
Let’s break down this key judgment and what it means for taxpayers and businesses facing GST demands.
What Is GST Section 73?
Section 73 of the CGST Act, 2017 deals with recovery of tax not paid or short paid, or erroneous refunds where there’s no fraud, willful misstatement, or suppression of facts.
It requires:
- A proper SCN (Show Cause Notice) under Section 73(1)
- Opportunity of personal hearing before passing an adverse order
Gauhati High Court Ruling: Case Snapshot
Case Title: M/s Tribeni Steels vs State of Assam & Ors.
Citation: Gauhati HC, WP(C)/3745/2023
Date of Order: 6 June 2024
Key Observations:
- No SCN was issued to the petitioner.
- No personal hearing was provided.
- This violated principles of natural justice.
Court’s Verdict:
“An order passed under Section 73(9) without complying with sub-sections (1) and (4) is unsustainable in law.”
Accordingly, the court quashed the order and remanded the matter back for fresh proceedings in accordance with law.
Legal Reference Points
| Section | Description |
|---|---|
| 73(1) | Mandates issue of a show cause notice |
| 73(4) | Personal hearing to be given on request or mandatorily before adverse decision |
| 73(9) | Final order determining tax liability |
Related Case Law:
- GKN Driveline vs UOI (SC) – Notice is a precondition for recovery
- Canon India Ltd. case – Decisions passed without jurisdiction or due process are invalid
Why This Judgment Matters
- Protects businesses from arbitrary GST demands
- Reminds officers to strictly follow procedural safeguards
Expert View: Practical Tip for Taxpayers
If you receive a GST demand without a show cause notice or hearing:
Immediately file a writ petition
Keep records of previous compliance or replies
Do not ignore GST DRC-01 or DRC-01A communications
📝 Also read our guide on How to reply to GST SCN effectively
Quick Summary for Google Snippet
Gauhati High Court held that GST orders under Section 73 passed without a show cause notice or personal hearing are void.
FAQ Section
Q1. What is the difference between Section 73 and 74 under GST?
Section 73 applies to cases without fraud or willful misstatement.
Q2. Can GST be recovered without SCN?
No. Both the CGST Act and courts mandate SCN before any recovery action.
Q3. What if I miss a hearing date?
Always respond in writing and request an adjournment if needed. Courts may protect you if there’s no willful default.
🔗 Related Government Resources
Conclusion: Know Your Rights, Defend Them Legally
This Gauhati HC ruling reaffirms a critical GST principle—no tax can be demanded without due process. At Efiletax, we help you respond to GST notices, draft replies, and file appeals with expert-backed support.