Judgment
[ 34861 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdictionf TUESDAY, THE TVVENTY SEVENTH DAY OF JANUARY TWO THOUSAND AND TTA'ENry SX PRESENT THE HONOURABLE THE CHIEF JUSTICE SRI APARESH KUII,IAR SINGH AND THE HONOURABI-E SRI JUSTTCE G.M. MOHIUDDIN l/lrRlT PETITION NO: 1498 OF 2026 Between:
lV!/s Goldstone lnfra, Having its office at Flat No.'102 Goldstone Jewel Park, Sy.No.246/F Puppalaguda, Manikonda, Hyderabad Rangareddy District, Telangana - 500089 Rep. by its Managing Partner ...PETITIONER AND 1. The Additional Commissioner, Customs & Central Tax, Ranga Reddy CGST Commissionerate, Hyderabad O/o. Princlpal Commissioner of Central Tax Ranga Reddy GST Commissionerate, GST Bhavan H.No.1-98/7/43, VIP Hills, Jaihind Enclave, Madhapur, Hyderabad - 500081 2. Union of lndia, Ministry of Finane, Represented by its Secretary, North Block, New Delhi-110001 ...RESPONOENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order, or direction more particularly one in the nature of a Writ of Mandamus declaring the Show cause notice datd 21-3-2O25 in OR no.1612024 and onsequent Order-in-Original dated 13.10.2025 vide Order no.7212o25-26-Adjn (ADC)€ST passed by Respondent No.1 compositely for the Financial Years 2018 -19 lo 2023-24 u/s.74(1) of the Central Goods and Service Tax Ac( 2017 (cST Act) as being arbitrary, illegal, violative of principles of natural justice and without authority of law apart from being violative of Articles 1a' 19(1xg) and 265 of the constitution of lndia and viorative of Rure 142 (1A) ot GST Rules and to consequenfly set aside the same and afl consequentiar proceedings.
lA NO: 1 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all furtherr proceedings including the recovery of tax demand, interest and penalty pursuanl to Order-in-Original dated 13:10.2025 vide Order no.7212o25-26-Adjn (ADA)-GST passed by Respondent No.1 for the Financial Years 2018-19 to 2023- 24.
Counsel for the Petitioner: SRI C.V NARASIMHAM Counsel for the Respondent No.l: SRI DOMINIC FERNANDES, SC FOR CBIC Counsel l'or the Respondent No.2: SRI N.BHUJANGA RAO, DEPUW SOLICITOR GENEREAL OF INDIA The Courtt made the following: ORDER
IN TEE MGECOT'RT FORTEE STATEOFTELANGANA ATEYDERABAI) TEEHON'BLETHECEIEE'W AND THE HON'BLE SRI JUSTICE G.M.MOEII'DDIN WRIT PETITION No.l498 of 2026 D*ed:27.01.2026 Between:
lWs. Goldstone Infra, Having ib offtce at FlatNo.l02, Goldstone Jewel Park, Sy.No.246lP, Puppalaguda, Manikonda, Hyderabad, Ranga Reddy Disnict, Telangana - 500 089, Rep. by its Managing Partner.
...Petitioner and The Additional Commissioner, Customs & Central Tax, Ranga Reddy CGST Commissionerate, Hyderabad, O/o. Principal Commissioner of Cenfial Tax, Raaga Reddy GST Commissionerate, GST Bhavan, H.No.l-98/7/43, VIP Hills, Jaihind Enclave, Madhapur, Hyderabad - 500 081, and another.
...Respondents ORDER: (Aparesh Kumar Sinch. CJ) l,eamed counsel Sri C.V.Narasimbam appears for the petitioner.
Sri Dominic Femandes, leamed Senior Standing Counsel for Central Board of [ndirect Taxes and Customs, appears for respondent No.l.
The writ petition is fited challengirrg the show cause notice dated 21.03.2025 and the order-in-original, datad 13.10.2025 covering tax periods
2 2018- L9 to 2023-24, mairiy on the following grounds: i) that no hearing was granted after the reply was filed by the petitioner which amounts to violation of principtes of natural justice; ii) Rule 142(1A) of the Central Goods and Services Tax Rules, 20L7 (hereinafter referred to as, "the Rules') require issuance of mandatory notice in Form GST DRC4IA since the subject period coveied pre-amended period of 2018-19 and 2019-20 which was not issued; and iii) a consolidated order for all the tax periods is not pennissible.
On the;se grounds, the impugned orders are liable to be set aside.
Leamed counsel for the petitioner has ref€rred to the reply to the show cause notice dated 22.0g.2fr25 (Annexure P-4 at page No.l27) and, submittod that the petitioner has opted for personal hearing, but after the reply rry65 f,rted no personal hearing was given to the petitioner. He has also referred to the order-in-original dated BJA.Z025 (Annexure P-1) and submitted that after the petitioner submitted a letter dated L0.09.2025,.to personal hearing was given to'the petitioner.
Show cause notice was issued oo21.03.2025 (Annexure P-2 at page No.78.l and the last notice was issued on 10.09.2025, on which day the :
:, petitioner atso filed ttre reply wherein it has r"qrr"rtd for pemonal hearing Therearfter no opportunity was given to the petitioner.
The petitioner took sonre time to collect the data in order to fltle the reply. Though no formal' extension of time was given to fite the repty, the
3 petitioner requested for a personal hearing vide iS rcply dated 10.09.2025, which was not considered.
He submits that the respondenb have not issued Fonn GST DRC-OIA notice as mandated by la2(lA) of the Rules. He refers to para 14.2 (page No.55) of the order-in-original and submie thar the Additional Qgmmis5iener had extracted the amended version of the Rule. He did not refer to the pre-amended Rule. That aspect has been specifically addressed by this Court in lWs. New Morning Star Travels vs. the Deputy Commissionerr and held that for the prio.r period the rcquirement is mandatory and it cannot be avoided. In support of his contention, he also relied on the decision of a Coordinate Bench of this Court in IWe.DBL-Deco (JV) vs. Assistant Commissioner (ST)2.
He has submitted that each assessment year is separate. The law applicable would also be different. Almost all the High Courts have held that consolidated order is not permissible. Reliance is placed on the Division Bench decision of the High Court of Andhra Pradesh at Amaravati in SJ.Constructions vs. the Assistant Commissioner3.
kamed Senior Standing Counset for Cental Board of Indirect Taxes and Custorns has referred to the list of dates subrnitted by him and submits that the show cause notice was issued on 21.03.m25. The petitioner was t zoz3 1to; rut l:46 - AaHC = 2o23 (79) csrL 430 (Ap) " W.P.No.8l60 of 2024, decid€d on 10.06.2f.24 ' w.P.No.l lo28 0f 2025 and barch, dared 17.@.2025
4 requ:ircd to submit reply within thirty days. He was also provided the opportunity of, personel hearing on many occasions i-e., 25.05.2025, 08.01' .2025, 10.07.2025, 23.07 .202s, 23.07 .202s and t 2.OB.2O21 Only on 10.@.2025 the petitioner filed his reply. As per Section 75(4) and (5) of the Centr:rl Goods and Services Tax Act,2017 (hereinafter referred to as,..ttre Acf), the petitioner was granted opportunity of personat hearing on more than tlree occasions, but he did not avail the oppotunity of personal hearing rather Eled the belated reply. The present proceedings is under Section 74 of the Act.
()n the issue of composite order, as per him the matter is no longer res integra. He has referred to the decision of the High Court of Delhi in Mathur Polymers vs. Union of India{. He submits that the decision refened to at para 2l i.e., Ambika Traders v. Additidnal Commissioners was msriled before the llon'ble Supreme Court, but the. challenge was withdrau.n. Af paras 2l ta 24 of Mathur polymers (supra), the High Court of Delhi has obcewed ttrat in cases involving allegatiotrs of fraudulent availmen: of ITC, where tre tnansactions are spread across several years, a consolidated notice may in fact be required in order to establish the iltegal modality adopted by such businesses and entities. The language of the legislation itself does not prevent issuance of show cause notice or order for multiple y,:ars in a consolidated manner. The said decision was carried to the ' J20251 177 trxmann.com 860 (Delhi) I [20251 l?7 rxmaur.com 134 (Delhi)
5 Hon'ble Supreme Court in S.L.P (C) Diary No.50279/2025 (lvfls.Mathur Potymers vs. Union of India) and was dismissed ot07.ll-20T5. The other similar matters were withdrawn.
He has invited the attention of this Court to Rule f42(lA) and submitted that nowhere in Rule 142(lA) there is any ref€r€nce to the 'period'. The reference is only to tlre 'notice'. The word "shall" in the said Rule has been amended as 'may' with effect from 15.10.2020. Admittedty, the strow cause notice was issued after that date. The Rule very clearly sap 'may' issue a notice. There is no reference to the period therein. Any other ioterpretation would amount to reading into the provision somahing that is obviously missing. He submits that there are judgments oo both sides on Rule 142(lA). On the face of it, the purpose of the provision is to put th€ tax payer to notice that if he wans to pay the tax, he can pay the tax before the show cause notice is issued. Read along with Section 74(5) and 74(8) of the Act, he gets a reduction in the penalty in either event he has to pay the tax.
It is not the case of the petitioner that he agreed wift the show cause notice and wanted to make the paym,ent. [t has Eled firc reply denying the contenb of the show cause notice. There is no prejudice caused to tbe petitioner. He cannot be allowed to argue that had Form GST DRC4IA notice been issued, the petitinner would have paid the amount within thirty days.
Iramed Senior Standing Counsel submib that fte order of a Coordinate Bench of this Court in M/s.DBLDeco (JV) Gupra) is a consent
6 onder. He contends that no prejudice ii caused to the petitioner by non- issuance of intimation for pre-amended period, He has referred to the dpcisi:ons of the High Court of Madras in ABT Limited vs, Additional Commissioner of GST and Central Excises (paras 3 and 7), Vishaka Exports vs. Assistant Commissioner (ST)7 (paras 8 and 9), the decision of the High Court of Gauhati in Ashikr Business @rivate) Limited vs. Union oflndiat - regarding prejudice t€st (paras 21,22,26 and30) and the decision of the High Court of Allahabad in Etesh Agrawal vs. Union of Indiae (paras ti and 9).
I{e has relied on Grasim lndustries Ltd. vs. Collector of Customs, Bombayro (para l0) on, the principles of statutory interpretation. According to him, if no such expression 'period' is used in rule 142(lA), the court should not read such intention into the provision.
He has lastly submitted that atl the grounds can be taken by the petitioner before the appellate authority as welt.
In the reply submissions, leamed cowsel for the petitioner so far as the ffust ground is concemed, has submitted that there is violation of principles of natural justice. The offrcer should have granted some more 5 1zozl1 t59 taxmarn-com 289 (Madras) 71zozr1 ee osr zto gr,raaras;
! IZOZ+1 t6Z trxnnru.cou 7lt (Gauhati) e lzOZf; tst txmann.com 538 (Allahabad) 'o (2002) 4 scc 29?
7 time. The petitioner was not given personal hearing, which has resulted in serious prcjudioe.
Regarding Rule 142(lA), leamed co,rnsel for the petitioner has submitted that the submissions of the leamed Senior Standing Counsel are agaiost the decision of this Court in IWs.DBL-Deco (JV), which has addressed the issue. It is bindiug on the .
So far as the passing of composite order for multiple tax periods is concemd leamed counsel for the petitioner submits that the case of Mathur Polymers (supra) is only on the question of ITC, whereas in the case of the petitioner, ITC is one of the issues. There are other issues involved where serious prejudice would be caused if separate show cause notice and proceedings were not initiated for separate years.
We have heard leamed counsel for the parties and considered the grounds urged.
The impugned show cause notice dated 21.03.2025 and the Order-in- Original, dalrd, 13.10.2025 have been challenged inter alia on the following grounds:
i) That no personal hearing was graoted after tlre reply filed by the petitioner which amounted to violation of principles of natural justice and the procedure laid down under the CGST Act;
8 ii) That a composite order has been passed for the Financial years 20 I I -20 t9 ta 2023 -2024; arrd.
iir) No intimation in Form GST DRC-0IA was issued for the subject period in violation of Rule 142(LA) of the CGST Rules,2017.
We propose to deal with each of these grounds hereinafter.
A penrsal of the impugned order-in-originar dated 13.10.2025 shows that show c'ause notice was issued upon the petitioner on 2L.03.2025 (Annexure P2) asling the petitioner to submit reply within thirty days from the date of receipt ofnotice as to why (i) Rs.1,25,08,575l- being the GST payable on the constru:tion services provided to independent buyers; (ii) Rs.35,74,500/_ being ttre GST payable on the construction services provided to landowners;
(iiD Rs.2,80,35,763/- behg the ineligible ITC availed should not be demand,:d from them; apart from (iv) Rs:55,g67l- being the ineligible ITC availed from suo moht cancelled; (v) Rs.67,8g4/- being the ineligibte ITC availed; (vi) Rs.1,09,47,703/- being the GST payabte on the difference of turnover declared in the GST raums and data submitted; and figures reported under the head 'Revenue from operations' in ITRs filed for the period ftom 2018-19 to 2022-23; (vii) appropriate interest at applicable rate(s) orr the amounts mentioned at (i) to (vi) above; (viii) penalty on the amounts rlemanded at (i) to (vi) above should not be imposed on them under Section 74(1) read with Section I22(2)(b) of the CGST/TGST/IGST Acts,
9 2017 by reason of fraud, wilful misstatement and zuppression of facts to evade tax as detailed supra; and (ix) penalty equal to tbe amounts dernanded at (i) to (vi) above should not be imposed on them under Section Lzz(l)(axw) of the CGST/TGST Acts, 2017 andthe corresponding section of IGST Act,2017 for failure to keep, maintain or retain books of account and other documents in accordance with the provisions of this Act or the rules madetheretrnder.
The petitioner filed its reply on 10.09.2025 (Annexure P.3) much after the exprry of thirty days period. The proper offtcer fixed several dates for pemonal hearing on 25.0i5.2025, 08.07.2025, 10.07.2025, 23.07.2025 ar:d 12.08.2025 vide letters dated 07.05.2025, 25.M.2025, 27.06.2025, 15.07.2025 and 06.08.2025. The petitioner/tax payer did not attend personal hearing to present its defence. Another opportunity of pemonal hearing was given on 10.09.2025 vide letter dated 02.09.2025. The petitioner did not appear on that date also, but sent e-mail on 11.09.2025. It is, therefore, evident that tlre contention of the petitioner that no opportunity of personat hearing was granted is not correct.
As per Section 75(4) of the CGST Act, an opportunity of personal hearing is to be grantd where a request is received in writing frorn the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. Sub-section (5) of Section 75 provides that if sufftcient cause is shown by the person chargeable with tax, the proper
10 offtoer shall grant time to the said person and adjourn the hearing for reasons to br: recorded in writrng. It is therefore wident that by granting several opportunities of personal hgaring after expiry of the period of thirty days of tbe s,:rvice of show cause notice, the proper officer duly comptied with the requirement of personal hearing. The contention of the petitioner that it should have been granted opportunity of personal hearing after furnishing its reply on 10.09.2025 much after the explry of thirty days period for filing its reply.,and even after several opportunities of perSonal hearing does not merit acceptance.
The petitioner has assailed the impugned order by asserting that a composite order for all the financiat periods could not be passed as each tax period related to a separate cause of action which the assessee was entitled to take <lefence. Therefore, separate proceedings ought to have been initiated for dir[ferent tax periods. The petitioner has ptaced,reliance on the decision of the High Court of Andhra Pradesh rendered in W.p.No.ilO2g of 2025 and batch in the case of S.J.Constructions (supra). The expression used in sub- sectio:ns (3) and (a) of Section 74 of the CGST Act relating to issuance of notice covering different tax periods has been interpreted'by the learned Division Bench of Delhi High Court in together with the definition of 'tax period' under Section 106 of the CGST Act, in contrast with the language used in Section 74(10) of the CGST Act, where the term .financial year, is used. ()n the basis of the interpretation of the aforesaid provision, it has been
ll held that the legislature was conscious of the fact that notice catr relate to a period and need not to be for a specific financial year. It has gooe on to hold that in cases invotving allegations of fraudulent availment of input tax credit (ITC), where the transactions are spread across several years, a consolidated notice may in fact be -required to be given in order to establish the illegal modality adopted by such businesses aud entities. The language of the legislation" ibelf, does not prevetrt issuance of show cause notice or order for multiple yea.rs in a consolidated nranner. The opinion of the Dethi High Court is extracted hereunder:
21. Heard. This Court has, in the past, considered several ordcrs-in- original inrolving der:rands on the ground of allegations of Faudulent availment of ITC and has held tlnt there are several factual isgres in such cases, which would need to be looked into, which carmot be adjudicated in a writ paition- In the decision of Ambika Tmders vs.
Additional Commissioner [2025J t77 tixnunn.com 134 @elhi/t[.P{C) 4853n025, in the context of issuance of multipte consolidated SCNs and passing of a consolidated order, this Court observed as unden 43. Insofar as the issue ofconsolidated notice for various financial years is concerned, a perusal of Section 74 of the CGST Act would itself shows that at least insofar as fraudulently availed or utilised ITC is concemod the language used in Scction 7a(3) of the CGST Acr aod Section 74(a) of the CGST Acr is "for any p€riod" snd 'for such p6iods" rEsp€ctively. This $6 61p thqn that a notice can b€ issued for a period which could one fmancial yea.r. Similar is the language cven in Section 73 of the CGST Acr. The rclevant prcvisions r€ad as undi:r :
?3. Dctcrminatiooof tax pcrtaining to the p€riod up to Financial Year 2023-24, trot paid or shoa paid or erroneordy refirodcd or input lax crcdit wroogly a\ailcd or utitiscd for any ressm othc( ttrn fraud or any wilful-missirtcment or arppression of hcs.- Xxx (3) Wbcre a notice has b€f,,, issEd,for any period t fu sub-sectiou (l), tte proper officer may s€rv€ a stateocoq contaiaing thc derails oftax not paid or sbort paid or erroneoraly refi.roH or input tax credit rvrongly availcd or utilised/r suci p*iods & dva those correred under sub-scction (lj, oo the pcrson cha4geablc with tax.
t2 (4) The s€rvice ofsucL statcmcot sball be dec@cd to bc s€rvicc of trotice b[ srrh persoa under arb-cmtim (l), $$ject to the cooditioa thaf 6e goulds rclied rpon br such tax pcriods othcr than those covered ur&r sub-section (l) are tbe saEc as arc mi:otioned in thc carlicr nri&i.
Xxx ?4. Dctcrmination of tix pertainiry to thc pcriod rp to Fioaacial Ycar 2023-24, rct paid or shoa paid or enorcously rrfuoded or ioput tax crcdit w:oogly availcd or utiliscd by reasou of fraud or any wilfrrl-misstst€mcot or supprEssiotr of hcts.- )kx (3) Wb€re a lotice has fu isalrdfor any period ruadrr sub-scction (t), the proper officer may serrc r statement, containing ttc rbaifs of tlx not paid or sbort paid or crroncously refrt[dcd or input tax crEdit $oogly rt/ailcd ot frlisdlor nrch periods ot}€r thao tbose covrted under anb-rcction (l), oo the person chargcabtc with tax.
(4) The scrvicc of statcment urder sub-sectioa (3) shall be deemcd b be s€rvice of notice undcr wb-ecction (l) of Scction 73, $bjcct to the mnditiou thrt thc grounds relied upou in the said statcmcot, cxc€pt tte ground of &aud, or any wilful- misstatcment or suppression of hcts to c!'adc tax, for pcriods other than thosc covered und& suEsectioo (l) are the same as are rnentioned itl the earlier notice."
44. Some of the other provisions of the CGST Act, which are relevant, include Section 2(106) ofthe CGST Act, which defines "tax period" as unden 2. (106) "tax period" means the period for which the rcturn is required to be fumished.
45. Thus, Sections 74(3), 74(4),73(3) ad 73(4) of the CGST Aet use the term 'for any period" and "for such periods". This would be in contrast with the language used in Section 73(10) ad 74(10) of the CGST Act where the term'financial yead'is used. The said provisions rcad as uadcc 73 (10)rT[q prcp€r offic€r sb.ll issue the od€r under sub- section (9) within tbree years toE the due date for furnishing of annual retum for tlre financial ),ear to which the tax not paid or short paid or inprt tax credit wrongly availed or utilised relates to or withil thl€e years ftom the date of ermneous refund" 74 (10) The proper officer shall issre the order under sub- s€ction (9) within a period offive years Eom the due darc for fumishing of annual retum for the firuncial year to which thc tax not paid or short paid or iDPut tax q€dit wrong{y availed or utilised relates to or within five years from the date of erroneous refund" The kgislature is thus, conscious of the fact that insofar as wmngfully avaited ITC is concerned, the notice can
13 relateto aperiod and ued uot to be for a specifrc financial y€ar.
46.The naturE of ITC is such that fraudulent utilization and availment of the saaxe cannot be established on Exlst occasions without conn€cting transactions over different financiat years.
The purchase could be sbown in one financial year and the supply may be shown inthe aext financial year. It is only when either are found to be fabricated or the firrrs are found to be fake that the maze oftransactions can be anatysed and established as being fraudul€Nf or bogus.
47. A solitary arailment or.utilization of ITC in one financial year n y actually not be capable of by itself establishing the pattem of fraudulent avaitnent or utilization- It is only when the series of transactions are anatpd investigatd and enquird into, and a consiste,nt pattern is established, that the fraudulent availmeirt and utilization of ITC rnay be revealed. The language in the aboveme,ntioned provisions" i€., the word 'period' or 'periods' as against 'financial year' or 'assessment year' are therefore, signifrcant.
48-The ITC mechanism is one of the salient features of the GST regime which was introduced to errcourage genuine businesses.
In the words of Shri Pranab Mukherjee, the then Hon'ble President of India, who addressed the Nation at the [aunch of the GST on 1$ July, 2017, ffC was highlighted as one of the core Gatures integral to the framework of the GST regime. The relevant extract of the said speech of the Hon'ble President is set out below:
"f am told that a key feature of the system is that buyers will get credit for tax paid on inputs only when the seller has actually paid taxes to the goverrunat. This creates a strong incentive for btryers to deal with honest and compliant sellers who paytheir dues prornptly."
49. It is seen tbat the said feature of ITC has been misused by large number of wrscrupulotrs dealers, businesses wbo have in fact utilized or arailed of ITC through non-existent supplierVpurchases, fake firrns and non-existent entities. The ultimate benefrciary of ttre ITC in t&e most cases rnay not even be the pemons in whose name the GST registration is obtained- Businesses, individuals, and entities have charged cornrnissiom for passingon ttc. h sev,eral cases, it has also been noticed that the persons in whose name the GST registration stands are in fact domestic helps, drivers, employees, etc., of businessmen who are engaged on salary and who may not even be aware that tlreir identities are berng misuses.
ln the above decisioq the court has fulty considered the stattrtory scheme as also ttre legislative history of the GST Act and held
t4 'that in cases relating to avaihnent of Input Tax Credit, considering the maze of transactions and due to the fact that the transactions may be spread over several y@rs, issuance of a .consolidated notice for multiple Financiat. Years would be permissible and telrable.
22. Thus, this Court is of the opinion that in cases involving allegations of fraudulent availment of ITC, where the transactions are spread acr)ss several years, a consolidated notice may in faot be required in such cases in order to establish the illegal modality adopted by urch businesses and entities. The language of-the legislation, itserf, does not prevent issuance of SCN or orrder for mtrltiple years in a consolidated mannetr " The chatlenge to the aforesaid judgment by the aggrieved petitione.r in s.L.P (Civil) Dairy No.50279 of 202s was dismissed vide judgment dated 07.1t.2025 holding that no good grounds were made out. It is also to be taken note of that as per Section 7a(10) of the CGST Act, an order under sub-section (9) has to be passed within a period of five years from the due date fcrr fumishing of annua[ 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 fi.ve years from the date of erroneous refund. As per the CBIC Circulirr, the last date for passing of order under Section 74 of theCGST Act for the Financiat Year 2018-19 was extended upto 3l.l z.zo25. The impugrred order has been passed on 1,3.10.2fr2s and, as such even for the Financial Year 2018-19, the composite order has been passed well within the period of limitatibn prescribed under Section 74(lO) read with Section 74(g) of the Act. The assessee carurct claim to be prejudiced if the adjudication procee(lings for multiple years have been conclirded before the period of limitation prescribed under Section 74(10) of the CGST Act.
15 The contention made on behalf of the petitioner that the decision in the case of Mathur Polymers (supra) relates to the question of input tax credit only would make no difference so far as the principle of law as regards issuance of show cause notice and passing of adjudication order for multiple years uoder Section 74 of the CGST Act is concemed.
The petitioner has also raisod an issue of non-issuance of notice or intimation in Form GST DRC-0IA before issuance of the show cause notice.
According to the petitioner, the amendment to Rule 142(LA) of the CGST Rules by substituting the expression 'proper offrcer shall' with 'proper officer may' was made with effect fiom 15.10.2020. The show cause notice covered period prior to that. As such, the proper officer was obliged to issue intimation in Form GST DRC-OIA. He has refened to tte decision of Andhra Pradesh High Court in IWs.New Morning Star Travels (supra) in support of the submission that for the period prior to 15.10.2020, requirement of issuance of intimation in Fonn GST DRC{IA was mandatory and could not have been arroided. He has also referred to the decision in W.P.No.8l60 of 2024, dated 10.06.2024, in he case of Ws.DBL-Deco (JV) (supra).
On the other hand" leamed counsel for the Revenue has invited the attention of the Court to the language used in Rule 142(1A) of the CGST Rules after amendment with effect ft,om 15.10.2020 and submitted that the Rule does not refer to any period therein, but onty communication of details
16 of an:f tax, interest and p€nalty. He submits that on the interpretation of Rule 142(lA) of the CGST Rules, diverse judgments have been rendered. The purpose of provision is to put the tax payer to notice so that he can pay the tax before the show cause notice is issued. He gets a reduction in penalty in the ev:nt he pays the tax. It is not the case of the petitioner that it agreed to make the payment.
As per his reply to the show cause notice, the petitioner had contested the grounds on which show cause notice was issued. In this regard, he has referrerl to the decision of the ABT Limited (supra) and Vishaka Exports (supra) rendered by the Madras High Court. In both the decisions, which relate to tax period prior to 15.10.2020, it has been held that the amendment is prospective and therefore, apply to the show cause notice. The decision rendercd by the Andhra Pradesh High Court in lWs.New Morning Star Travels (zupra) and that of the Madras High Court in Vishaka Exports (supra) on the interprctation of the amended Rule 142(1A') of the CGST Rules are divergent. He has submitted tlmt in the facts and circumstances of the case, flre test is whether non-intimation under Rule l%(l$)of the CGST Rules has, in the ultimate analysis, led to any prejudice to the assessee. The petitioner though in its reply to the show cause.notice raised the issue of non- intirnation of the tax, peoalty and interest ascertained by the proper officer under Rule 142(lA) of the CGST Rules, but it, at the same time, contested the charges contained in the show cause notice. Therefore, the requirement
t7 of the intimation was rendered formal. If issuance of such intimation could not have served any benefit to the assess@, it would be futile on the part of ttrc writ court to enforce on the revenue authorities fulfilment of that condition as no real prejudice is shown to have been caused- In Elesh Agarwal (supr{, the Division Bench of Allahabad High Court had in a sirnilar circumstances held that no real prejudice has been causd to the petitioner for reason of the discrepancy alleged in issuance of show cause notice in Form GST DRC 01A.
Upon consideration of the stand of the parties, the following position emerged on the requirement of issuance of intimation under Rule 142(14).
Rule 142(lA) either before or after amendment did not use the expression 'period'. The legislafure consciously amended the expression 'shall' used in unamended Rule 142([) as 'may'. The Rule does not refer to the 'period' for which the intimation relates.
Though the petitioner has placed reliance on the decision of IWs.New Morning Star Travets (supra) as to the requirement of compliance of intimation in ForrrGST DRC-0lA for the tax period prior to the amendment to the Rule with effect from 15.10.2020, lut tbe petitioner has not shown any prejudice caused by its non-compliance. Petitioner, in his reply, has sfiongly contested the grounds taken in the show cause notice, apart from taking a plea of non-issuance of intimation in Form GST DRC-0lA. ln the case of IWs.New Morning Star Travels (supra), it has been held that in a case
r8 where the interpretation of a statute [eads to ambiguity, the benefit ought to go to the tax payer. The decision, however, does not address as to whether non-issuance of such intimation led to any prejudice, in the facts and circumstance of the case. A constitution Bench of the apex court in ECIL vs. Bi.Karunakarrt, at para 30(v), has held that the theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the nrle of law and to assist the individuat to vindicate his just rights. They are not incantations to be invoked nor rites to be perforrred on all and sundry occasions. whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts imd circumstances of each case.
In Dharampal satyapal Limited vs. Deputy commissioner of central Excise, Gauhatil2, rendered in a case relating to New tndustrial Policf in the Norttr-Eastern region, the apex court has while dealing with the issue rrf violation of principles of naturat justice held that even if it is found by the court that there is a violation of principles of natural justice, the court may not necessarity strike down the action and refer the matter back to the authorities to take fresh decision after comptying with the procedural requirement in those cases where non-grant of hearing has not caused any prejudice to'the person against whom the action is taken. The validity of the order Ins to be decided on the touchstone of 'prejudice'. The ultimate test is Itltell; 4scc7z7 t2lzots; 8 scc 519
t9 always the sanre viz., the test of pryiudice or the test of fair hearing. Ttrc opinion of the apex court at para 40 of the said judgment is extracted as under:
"40.In this behalt we need to notice one other exception which has been carved out to the aforesaid principte by the courts: Even if it is found by the court that there is a violation of principles of naturat juSice, the courts bave held that it may not be niressary to strike down the action and refer tbe matter back to the authorities to take &esh decision after'complying with the procedurat in those cases where non-grant ofhearing has not caused any prejudice to the p€rson againsl whom the action is taken. Therefure, bvery violation of a&cet of natural justice may not lead to the conclusion thatthe order passed is always null and void. The validity of the order has to be decided on the touchstone of "prejudie". The ultimate test is always the same viz. the test of prejudice or the test of fair hearing."
The apex court has also referred to the decision of ECIL (supra).
further held that so far as courts are concerned, they ,re ernpowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. By referring to the words used in ECIL (supra), at para 3[, it was observed therein ttrat since the courts/tribunals will apply their judicial mind to the question and give their reasons for setting aside or not seffing aside the order of punishment, (and not any internal appellate or revisiotral authority), there would be neither a breach of the principtes of natural justice nor a denial of the reasonable opportunity. Keeping in view the aforesaid prirrciples in mind; the apex court went on to hold that even when the court finds that there is infraction of principles of natural justioe, it has to address a further question as to whether any purpose would be served in remitting the case to the authority to make fresh demand of amount
20 recovt:rable, only after issuing notice to show cause to the appellant. The apex <:ourt found that such an exercise would be totally futile having regard to the law laid down in the case of RC.Tobacco (Private) Limited vs.
Union of Indiar3.
We find that in the case of IWs. New Morning Star Travels (supra), this isr;ue of prejudice test was neither raised nor taken into consideration by the leermd court. The case in IWs.DBr-Deco (Jv) (supra) decided by this court rvas based upon the eonsent of the respondenUrevenue to set aside the impugned order for not issuing the notice under Rule 142 by reserving liberty to issue such notice In the case of Ashika Business (Private) Limited (supra), at paras 21,22 and26, the Gauhati High court has also relied on the prejudice test.
The Allahabad t{ig[r Court in Elesh Agarwal (supra) has also taken a similar view in a case raising non-issuance of Form GST DRC-0[A.
It would be pertinent to refer to the opinior.r of the apex court on what constitutes a per incuriam or sub stlentio decision rendered in the case of Bilkis Yakub Rasool vs. union of Indiara. At para 154, on the rule of sub stlentto being another exeeption to the rule of precedents, the opinion of the apex cr>urt is as under:
'154. Another exception to the rule of precedents is the rule of sub silentto. A decision is passed sub silentio when the particular point of law in a decision is not perceived by the court or not present to its mind or is not consciously determined by the t31zoos1 7 sccz2s " eozq)s scc48l
21 I ) oourt and it does not form part of the ratio decidendi it is not binding vide Arnit Das (1) vs. State of Biharrs."
It follows therefrom that a decision is passed sub stlentio when the particular point of law in.a decision is not perceived by the court or not pres€nt to ib mind or is not consciously determined by the court and it does not form part of the ratio decidendi, it is not binding. (Also see paras 13, l3.l to 13.8 of Odisha State Financial Corpbrrition vs. Vigran Chemical Industries ri. [n such a siiration, the decision in the case of IWs. New Morning Star Travels (supra) can be said to be rendered szD silentio a.s the test ofprejudice was neither raised nor considered by the learned court. This court is therefore of the opinion that non-issuance of intimation in Forrn GST DRC-0IA under amended Rule 142(lA) for the period prior to 15.10.2020 upon the petitioner did not result in causing any prejudice for the purposes of sriking down the impugned order.
The petitioner has an efficacious altemative remody of appeal to raise alt avaitable grounds of law and fact under Section l0(l) of the Act.
I( in &e ultimate analysis, the petitioner could not show any prejudice for non-issuance of the intimation in Form GST DRC{IA, this Court could refrain from exercising its discretionary jurisdiction under Article226 of tlre Constinrtion of lodia as it could only be a fonnality.
15 (zo@) s sct +aa t6 zozs scc Onune sC t60g
22 For the aforcsaid reasons, this court is of the considered opinion that the p'etitioner has not been able to make out a case for interference in the impqgned show cause notice and the Order-in-Original on any of the grounds raised by it in writjuris{iction. The petitioner may avail the remedy of statutory appeal taking all such grounds of law as available on facb.
Needl xs to say, in such,a case, the appellate authority would consider the explanation of the petitioner for delay, if any, in preferring the appeat aking into accourt that the petitioner was prosecuting his remedy before this court in the vrit jurisdiction.
llhe writ petition stands dibmissed. There shall be no order as to costs.
IUiscellaneous applications, if any, shall stand closed.
SD'-M. NAGAMANI ASS]STANT REGISTR,AR I 6 ,/TRUE COPY" SECTION OFFICER To, 1. One GC to SRI C.V IIARAS|MHAM, Advocate tOpUCl 2. One CC to SRI DOMINIC FERNANDES, SC FOR CB|C [OPUCI 3. One CC to SRI N.BHUJANGA RAO, DEPUTY SOLICITOR GENERAL OF ND[qloPUC] 4. Two CD Copies PMK BS dtl-
l HIGH COURT DATED:27 t01t20i6 cof ORDER WP.No.{498 of 2026 DISMISSING THE WRIT PETITION WTHOUT COSTS * p{ ,r\,\'g c.E 1 27 f @