Facts of the Case

M/S. PepsiCo India Holdings Pvt. Ltd. (GSTIN 18AAACP1272G1ZM), engaged in marketing soft drinks/fruit juices and manufacturing food products, was issued a show-cause notice dated 05.09.2023 under Section 73(1) of the CGST Act, 2017 alleging wrongly availed and utilized Input Tax Credit of Rs.19,51,41,111 for the period July 2017 to March 2018, based on a purported mismatch arising from non-furnishing of information in Table 14 of Form GSTR-9C. The petitioner challenged the notice before the Gauhati High Court, contending Table 14 had been made optional by a chain of CBIC notifications (Notification Nos. 56/2019, 79/2020, 30/2021, 14/2022 and 38/2023), and that, in any case, no notice under Section 61 read with Rule 99 (Form GST ASMT-10) had ever been issued before the Section 73 notice, rendering the proceeding without jurisdiction.

Issues Involved

  1. Whether a Section 73 show-cause notice founded solely on a scrutiny-stage discrepancy can be validly issued without first following the mandatory Section 61/Rule 99 procedure (Form GST ASMT-10 and consideration of the assessee's explanation).
  2. Whether non-furnishing of optional information (Table 14 of GSTR-9C) can even constitute a "discrepancy" triggering Section 61.

Petitioner's Arguments

  • Table 14 of Form GSTR-9C was made optional for FY 2017-18 onward by a chain of CBIC notifications, so its non-submission could not amount to a discrepancy.
  • Even assuming a discrepancy existed, Section 61 read with Rule 99 mandatorily requires issuance of Form GST ASMT-10 before invoking Section 73, which was admittedly never issued.
  • Relied on the Rajasthan High Court's ruling in Joint Commissioner vs. Goverdhandham Estate Pvt. Ltd. (SLP dismissed by the Supreme Court), which struck down an identical Section 73 notice issued without following Section 61, and on Godrej Sara Lee to argue the alternative statutory remedy was no bar where jurisdiction itself was assailed.

Respondent's Arguments

  • Furnishing Table 14 information was in fact mandatory, since it reconciled ITC with expenses in the financial statements, justifying the Section 73 notice read with Circular No.31/05/2018-GST.
  • Five opportunities for personal hearing had been given but the petitioner neither attended nor replied; the petitioner should be relegated to the statutory remedy instead of invoking writ jurisdiction.

Court Order / Findings

  • Applying Goverdhandham Estate Pvt. Ltd. (affirmed by the Supreme Court dismissing the department's SLP), the Court held that wherever a Section 73 notice is founded solely on a discrepancy detected during scrutiny of returns, the proper officer must first comply with Section 61 read with Rule 99 — issuing Form GST ASMT-10, considering the assessee's explanation, and reaching a finding under Section 61(3) that no satisfactory explanation was furnished — before assuming jurisdiction under Section 73.
  • It was undisputed that no ASMT-10 notice was ever issued, so the precondition for invoking Section 73 was never satisfied, regardless of whether Table 14 was ultimately optional or mandatory; the alternative-remedy objection was rejected since the very jurisdiction to issue the notice was under challenge.
  • Since limitation for issuing a fresh Section 61 notice for FY 2017-18 had by now expired, no fresh proceedings could even be initiated; the writ petition was allowed and the impugned show-cause notice was quashed in its entirety.

Important Clarification

  • A GST demand notice under Section 73 founded exclusively on a "discrepancy" detected during return scrutiny cannot be issued unless the proper officer has first complied with the mandatory Section 61/Rule 99 procedure.
  • Skipping the ASMT-10 step renders the Section 73 notice void for want of jurisdiction, and this defect can be raised by writ petition notwithstanding an available statutory remedy, since the jurisdictional foundation itself is under challenge.
  • This ratio, drawn from Goverdhandham Estate Pvt. Ltd. and now affirmed by both the Supreme Court and the Gauhati High Court, is significant for large corporates facing GSTR-9/9C reconciliation-based demands.

Sections Involved

  • Section 61, CGST Act, 2017 — scrutiny of returns, mandating a discrepancy notice and consideration of explanation before further action.
  • Rule 99, CGST Rules, 2017 — procedure for scrutiny, including Form GST ASMT-10/11/12.
  • Section 73, CGST Act, 2017 — determination of tax not paid/wrongly availed ITC, non-fraud, whose invocation was held to require prior Section 61 compliance where based on scrutiny discrepancies.

Decision – In Favour of

The decision is in favour of the assessee. The Section 73 show-cause notice was quashed in its entirety, and no fresh proceedings could even be initiated given the intervening expiry of limitation for issuing a Section 61 notice.

Case Details

Court: Gauhati High Court (High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh)
Case No.: WP(C)/6960/2023
Coram: Hon'ble Mr. Justice Soumitra Saikia
Date of Hearing: 20.06.2025; Date of Judgment: 19.09.2025

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