3 Month Gap Between GST SCN and Final Order Is Mandatory: Bombay High Court

The Nagpur Bench Bombay High Court has held that maintaining a mandatory minimum gap of three months between the issuance of a show cause notice under Section 73(2) of the Central Goods and Services Tax Act, 2017 (CGST Act) and the passing of the final adjudication order under Section 73(10) is essential and non-negotiable. Any adjudication completed in violation of this statutory timeline would be unsustainable in law. The bench of Justice Anil L. Pansare and Justice Nivedita P. Mehta has observed that the purpose of the three-month window is not merely procedural but substantive. Multiple statutory rights of the taxpayer—such as filing replies, seeking adjournments, personal hearing, and voluntary tax payment—are rendered illusory if the adjudication is rushed. Shortening the timeline defeats the legislative intent behind Sections 73 and 75 of the CGST Act. The ruling was delivered in a writ petition filed by a Delhi-based company challenging a GST demand order on the ground that the final order was passed without observing the minimum statutory time gap prescribed under the CGST Act. The show cause notice was issued on 15 May 2024, while the adjudication order followed on 9 July 2024, leaving a gap of barely one month and twenty-four days. The petitioner contended that such a truncated timeline violated the express mandate of Section 73(2) read with Section 73(10) of the CGST Act and effectively denied the taxpayer a meaningful opportunity to respond, comply, or seek personal hearing. The principal question before the Court was whether the three-month period prescribed under Section 73(2) of the CGST Act is mandatory only for notices issued near the limitation period under Section 73(10), or whether it applies to all show cause notices irrespective of when they are issued. Section 73(2) mandates that a show cause notice must be issued at least three months prior to the time limit prescribed for passing the order. Section 73(10) prescribes an outer limit of three years from the due date of filing annual return for passing an adjudication order. Sections 73(3), 73(5), and Section 75 further provide safeguards such as service of detailed statements, opportunity for voluntary payment, and mandatory personal hearing. The Court placed heavy reliance on earlier decisions, including Delhi High Court in C.H. Robinson Worldwide Freight India Pvt. Ltd. and Tata Play Limited, where it was held that the three-month gap is meant to provide adequate time to the assessee for filing replies, opting for voluntary compliance, and availing personal hearing. Andhra Pradesh High Court in Cotton Corporation of India, which ruled that violation of the three-month timeline renders the show cause notice itself otiose. The decisions emphasized that the statutory timeline is rooted in principles of natural justice and cannot be diluted for administrative convenience. The Court categorically held that any adjudication order passed without observing the minimum three-month gap is legally unsustainable. The show cause notice dated 15 May 2024 and the adjudication order dated 9 July 2024 were quashed and set aside. The matter was remanded to the adjudicating authority for fresh consideration in accordance with law. The tax authorities were also directed to remove the lien on the petitioner’s bank account, subject to there being no other legal impediment. The petitioner was directed to appear before the adjudicating authority on 23 January 2026. Case Details Case Title: A. M. Marketplaces Pvt. Ltd. Versus The Union of India Case No.: Writ Petition No. 7941 Of 2025 Date: 17-01-2026 Counsel For Petitioner: Anurag Soan Counsel For Respondent: Ketki Jaltare Vaidya, Advocate Click Here To Read Order Read More: IGST Refund Claim of Amalgamating Company for Pre-Amalgamation Exports: Gujarat HC to Deliver Judgment Today

3 Month Gap Between GST SCN and Final Order Is Mandatory: Bombay High Court

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