The Supreme Court has set aside a GST demand order of over ₹8.9 crore against a company after finding that there was no material on record to show that the show cause notice had been properly served, holding that such failure violated the principles of natural justice.
The bench of Justice Aravind Kumar and Justice Prasanna B. Varale has observed that although the adjudication order stated that the notice had been served, there was no material available to substantiate such service. The Court held that the absence of proof of service amounted to a violation of natural justice and warranted interference.
The case arose from proceedings initiated against a private company engaged in manufacturing and selling Ayurvedic health supplements. The company had entered into a logistics support agreement with a clearing and freight agent for warehouse operations in Gurugram. After the agreement ended in July 2022, the company shifted its business operations and warehouse from Haryana to Delhi and claimed that the agent’s control over the Gurugram premises ceased thereafter.
In May 2024, tax authorities issued a show cause notice proposing reversal of Input Tax Credit (ITC) and demanding Rs. 8.90 crore. The demand was later confirmed through an Order-in-Original passed in August 2024.
The company challenged the show cause notice and the order before the Punjab and Haryana High Court, primarily on the ground that the notice had not been served and that the order was passed ex parte in violation of natural justice. However, the High Court dismissed the petition, observing that an alternative statutory remedy was available and noting that there was no specific pleading regarding non-uploading of the notice on the GST portal.
At the same time, the Court rejected the assessee’s contention that the show cause notice itself was vague or issued without application of mind, clarifying that this argument lacked merit.
Allowing the appeal in part, the Supreme Court set aside the demand order and permitted the company to file a reply to the show cause notice. The assessing officer was directed to reconsider the matter and pass a fresh order after adjudication.
The Court also clarified that the assessee cannot again challenge the show cause notice on grounds of vagueness or lack of material particulars. Issues relating to jurisdiction may still be raised in the reply and examined by the assessing authority.
Case Details
Case Title: SRIDEVA SATTVA PRIVATE LIMITED Versus STATE OF HARYANA & ORS.
Case No.: @SLP (C) No.33078 of 2025
Date: 30.01.2026
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