Facts of the Case

The petitioner, M/s. Rajeswara Reddy Avula, Hyderabad, was assessed under Section 73 of the Telangana Goods and Services Tax Act and the Central Goods and Services Tax Act, 2017 for FY 2019-20 vide an order dated 31.08.2024 passed by the Assistant Commissioner (GST), Charminar Division. In the writ petition filed under Article 226 of the Constitution, the petitioner also challenged Notification No. 09/2023-Central Tax dated 31.03.2023 and Notification No. 56/2023-Central Tax dated 28.12.2023 — which extended the limitation period under Section 73(10) of the CGST Act for FY 2019-20 — as ultra vires Section 168A of the CGST Act, along with the corresponding State notifications, and further challenged the impugned order for lacking a DIN and signature.

Issues Involved

  1. Whether the impugned Section 73 assessment order could be sustained where the Proper Officer confirmed the tax demand without considering the petitioner's written reply to the show cause notice, solely because the petitioner had not attended a personal hearing.
  2. Whether Notification Nos. 09/2023-Central Tax and 56/2023-Central Tax, extending the limitation period under Section 73(10) of the CGST Act, are ultra vires Section 168A of the CGST Act, 2017.

Petitioner's Arguments

  • The petitioner had admittedly filed a written reply/objections to the show cause notice, which was received by the Proper Officer.
  • The Proper Officer did not consider this reply, solely on the ground that the petitioner had not attended a personal hearing despite two adjournments.
  • Even assuming non-attendance at the personal hearing, the Proper Officer was legally obligated to consider the written reply on record before confirming the tax demand.
  • On this ground alone, the impugned order deserved to be set aside, with liberty to the respondents to pass a fresh order in accordance with law.

Respondent's Arguments

  • The respondents, represented by counsel for the Union of India, the State Tax Department and the CBIC, raised no objection to the petitioner's request that the impugned order be set aside and the matter remanded for a fresh decision.

Court Order / Findings

  • The Court confined itself to the limited ground urged by the petitioner — that the Proper Officer had failed to consider the written reply to the show cause notice merely because the petitioner did not attend the personal hearing.
  • Since the reply on record had not been considered, the Court set aside the impugned order dated 31.08.2024 and directed the Proper Officer to rehear the petitioner and pass a fresh order in accordance with law, expeditiously.
  • The writ petition was disposed of without expressing any opinion on the merits of the case, and no costs were imposed; pending interlocutory applications, if any, were closed.
  • The Court did not decide the broader constitutional challenge to Notification Nos. 09/2023-Central Tax and 56/2023-Central Tax extending the Section 73(10) limitation period, having disposed of the petition on the narrower natural-justice ground alone.

Important Clarification

  • A GST assessing officer under Section 73 cannot confirm a tax demand by disregarding a taxpayer's written reply to a show cause notice merely because the taxpayer did not attend a personal hearing — the reply on record must be considered on its merits.
  • Where an assessment order is set aside on this limited natural-justice ground, the underlying tax demand remains open for fresh adjudication; the taxpayer secures a rehearing, not a decision on merits.

Sections Involved

  • Section 73 of the Central Goods and Services Tax Act, 2017 and the corresponding Telangana GST Act — governs determination of tax not paid or short paid for reasons other than fraud, under which the impugned order was passed.
  • Section 168A of the Central Goods and Services Tax Act, 2017 — empowers extension of time limits in special circumstances; the vires of Notification Nos. 09/2023 and 56/2023-Central Tax issued under this provision was raised but left undecided.
  • Article 226 of the Constitution of India, 1950 — invoked for the writ remedy before the High Court.

Decision – In Favour of

Disposed of, in favour of the Assessee to the limited extent that the impugned assessment order was set aside for non-consideration of its written reply, with the matter remanded for a fresh decision and no opinion expressed on merits; no costs were imposed, and the broader challenge to the limitation-extension notifications remains undecided.

Related Case Laws

No directly on-point case notes on non-consideration of a Section 73 reply to a show cause notice are currently published on this site.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: W.P. No. 36627 of 2024
  • CNR: HBHC010713602024
  • Coram: Justice Sujoy Paul and Dr. Justice G. Radha Rani
  • Decision Date: 30-12-2024

Link to Download the Order

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