2026-VIL-1125-DEL
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SGST High Court Cases

GST - Maintainability of writ petition against show cause notice under Section 74 issued after Audit - Rule 101(4) of the CGST Rules, 2017 - Audit was conducted and an amount was deposited through Form GST DRC-03 which the Petitioner claims was made under coercion and was appropriated in the Audit Report - Petitioner contended that Rule 101(4) makes it mandatory for the proper officer to consider the reply before finalising the audit findings - Whether the issuance of the show cause notice warrants interference merely because the Petitioner contends that its reply to the audit was not dealt with adequately - HELD - A statutory requirement obliging the proper officer to consider the reply of a registered person must be complied with, but whether the reply was considered, whether the consideration was adequate and what effect is to be given to the objections are matters which can be examined in the adjudicatory proceedings - It cannot be said that the audit authorities wholly ignored the reply, as the impugned proceedings refer to it and record that it was not satisfactory, and the mere fact that it was dealt with in one sentence cannot result in the Court adjudicating the tax liability or quashing the show cause notice – Further, issuance of a show cause notice by itself does not amount to determination of liability, and the petitioner can place all objections before the Adjudicating Authority, including those on limitation, computation, the manner of audit, and alleged coercion in respect of the payment and its appropriation - No interference is warranted at this stage with the show cause notice, the Petitioner is at liberty to raise all objections before the Adjudicating Authority – The petition is disposed of
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