Facts of the Case

The petitioner, Baba Agriculture Export, challenged an Order-in-Original No.70/2024-25-GST dated 25.02.2025 passed under Section 73 of the CGST Act, 2017, contending it had never been served with a prior show cause notice as mandated by Rule 142(1A) of the CGST Rules, 2017. The petitioner also challenged the underlying show cause notice dated 25.11.2024 as void ab initio for constructive non-service and denial of personal hearing under Section 75(4), and separately challenged Notification No. 56/2023-Central Tax as ultra vires Section 73(10) to the extent it extended limitation without valid statutory authorisation.

Issues Involved

  1. Whether an assessment order passed under Section 73 without prior issuance of the intimation contemplated under Rule 142(1A) of the CGST Rules is sustainable.
  2. Whether the writ petition was maintainable given the petitioner's alleged prior availing of a personal hearing and the existence of an alternative appellate remedy.

Petitioner's Arguments

  • The Order-in-Original was passed in contravention of Rule 142(1A) of the CGST Rules, 2017, as no prior show cause notice/intimation was served on the petitioner before the demand was raised.
  • The proceedings were also vitiated by constructive non-service and denial of an opportunity of personal hearing under Section 75(4) of the Act, and the extended limitation relied upon under Notification No. 56/2023 was without valid statutory backing.

Respondent's Arguments

  • The petitioner had never earlier raised any objection regarding non-service of a prior notice under Rule 142(1A) and had, in fact, availed an opportunity of personal hearing, during which further time was sought.
  • The petitioner had an equally efficacious alternative remedy of statutory appeal, rendering the writ petition not maintainable.

Court Order / Findings

  • Notwithstanding the department's objections on maintainability and the petitioner's conduct, the Court applied its consistent line of authority, holding that non-issuance of the intimation/notice mandated under Rule 142(1A) of the CGST Rules vitiates the entire assessment process, regardless of subsequent participation in a personal hearing.
  • The Order-in-Original dated 25.02.2025 was accordingly set aside, and the matter remanded to the assessing authority to complete the assessment afresh after issuance of the necessary notice.
  • The period from the date of the impugned order till receipt of the present order was directed to be excluded for computing limitation.

Important Clarification

  • The Andhra Pradesh High Court has taken a consistent view that skipping the Rule 142(1A) intimation before issuing a formal show cause notice under Section 73/74 is a fatal procedural defect that vitiates the entire assessment, irrespective of whether the assessee later participated in a personal hearing on the substantive demand.
  • Such quashing is typically accompanied by exclusion of the intervening period for limitation purposes, ensuring the department is not time-barred from redoing the assessment properly.

Sections Involved

  • Section 73, CGST Act, 2017 - determination of tax not paid/short paid, including the limitation under Section 73(10).
  • Rule 142(1A), CGST Rules, 2017 - communication of details of tax ascertained as payable, prior to issuance of notice.
  • Section 75(4), CGST Act, 2017 - mandatory opportunity of hearing.

Decision – In Favour of

Decided in favour of the assessee; Order-in-Original set aside and matter remanded for fresh assessment after proper notice.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: Writ Petition No. 24140/2025
  • Coram: Justice R. Raghunandan Rao and Justice T.C.D. Sekhar
  • Date: 8th October, 2025

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