2026-VIL-775-TEL
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SGST High Court Cases

GST - Assessment - Non-adherence to Statutory Time Period – Challenge to assessment on multiple grounds including that show cause notice was issued less than six months prior to passing of order as mandated by Section 74(2) of the CGST Act, 2017 and that the assessment was passed in violation of principles of natural justice without affording genuine opportunity of hearing - Whether the requirement of issuing show cause notice at least six months prior to passing of assessment order under Section 74(2) is mandatory and whether non-compliance thereof vitiates the assessment order - HELD - The provision of Section 74(2) requiring issuance of SCN at least six months prior to passing of assessment order does not appear to be mandatory in nature as no consequences thereof are provided and mere use of the word shall in such situation will not render it mandatory. Even otherwise such provisions must be tested on whether the assessee has suffered any prejudice. In the facts of the case the petitioner was granted multiple opportunities for filing reply and personal hearing at different stages after issuance of show cause notice - The personal hearing notices were issued and the petitioner participated in the hearing on 23.03.2026. The order was passed on 28.03.2026 well within the period of limitation for passing assessment order. The petitioner had not raised the grounds of non-observance of Section 74(2) in the earlier writ petitions filed before this court - The assessment order has been passed after affording multiple opportunities to the petitioner. No real prejudice has been caused to the petitioner by non-adherence to the time period of six months. The Supreme Court in its order dated 13.05.2026 has relegated the petitioner to avail the statutory remedy of appeal and in the modification order dated 29.05.2026 has observed that it is up to the petitioner to prefer statutory appeal or avail any other remedy in law. In the circumstances the writ petition should not be entertained - The writ petition is dismissed and the petitioner is relegated to avail the statutory remedy of appeal as per the observations of the Supreme Court - GST - Dismissal of appeal for non-deposit of statutory pre-deposit, Opportunity to cure procedural defects through defect memo - At the time of filing appeal, there was a shortfall in statutory pre-deposit of 10% required under Section 107(6)(b) of the CGST Act. The Appellate Authority rejected the appeal on the sole ground that statutory pre-deposit was not completed at the time of filing. However, prior to passing the Order-in-Appeal dismissing the appeal, the Petitioner had completed the shortfall deposit well within the one-month grace period under the statute and before the order was passed - Whether an appeal can be dismissed merely on procedural ground of non-deposit of statutory pre-deposit when such defect was subsequently rectified before the order of dismissal was passed - HELD – The procedural requirements for filing appeals such as deposit of statutory pre-deposit are mandatory but cannot be used as an excuse to deny justice without first giving the appellant adequate opportunity to rectify the defect. When a procedural defect exists in an appeal, the Appellate Authority is duty-bound to issue a defect memo intimating the Appellant of the deficiency and providing reasonable time to cure it, rather than summarily dismissing the appeal. Justice cannot be denied for failure to comply with procedure without granting opportunity to the Appellant to rectify procedural defects - The principles of natural justice require that when a defect has been cured before the order of dismissal is passed, the appeal should not be rejected on the basis of the defect. In this case the shortfall in pre-deposit was completed within the grace period provided by statute and before the appellate order was passed, therefore the ground for dismissing the appeal ceased to exist. The Appellate Authority acted in a mechanical manner without adequate consideration of the facts and without giving opportunity for cure - The Order-in-Appeal is set aside and the appeal is restored with direction to Appellate Authority to hear the matter on merits – The writ petition stands allowed
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