The Supreme Court has stayed further proceedings arising from a Goods and Services Tax (GST) show cause notice after observing that the matter raises a significant jurisdictional issue, while taking note of the petitioner’s contention that the tax authorities had issued a fresh show cause notice under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017 for the very same tax demand that was already pending in statutory appeal before the Joint Commissioner (Appeals). 

The Bench of Justice Ujjal Bhuyan and Justice Atul S. Chandurkar issued notice in the Special Leave Petition (SLP) challenging the Uttarakhand High Court’s order and directed that all further proceedings pursuant to the show cause notice dated 21 February 2025 shall remain stayed until the next date of hearing. The matter has been listed for further consideration on 29 September 2026. 

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The dispute arose after the tax department passed an adjudication order against the petitioner under Section 74 of the UKGST Act on 8 July 2025. Instead of entertaining a writ petition challenging the order, the Uttarakhand High Court declined to exercise its writ jurisdiction, observing that the petitioner had an effective statutory appellate remedy under Section 107 of the Act.

The High Court held that since an appeal mechanism was available under the GST law, the petitioner could not bypass the statutory remedy by directly invoking the writ jurisdiction under Article 226 of the Constitution. Consequently, the writ petition was dismissed on 30 May 2026, leaving it open to the petitioner to pursue the statutory appeal. 

Before the Supreme Court, the petitioner argued that while its appeal against the adjudication order was already pending before the Joint Commissioner (Appeals), the GST authorities issued yet another show cause notice under Section 74 of the CGST Act relating to the same tax demand.

According to the petitioner, such parallel proceedings amounted to a jurisdictional error, as the authorities could not simultaneously pursue fresh adjudication over an issue that was already under appellate consideration.

The petitioner further contended that this jurisdictional issue had been overlooked by the Uttarakhand High Court while dismissing the writ petition. 

After hearing counsel for the petitioner, the Supreme Court found the contention substantial enough to warrant examination. While issuing notice in the Special Leave Petition, the Court granted interim protection by staying all further proceedings initiated pursuant to the impugned show cause notice dated 21 February 2025 until further orders.

The interim order effectively prevents the GST authorities from proceeding with the fresh adjudication while the Supreme Court considers whether the issuance of the second show cause notice suffers from lack of jurisdiction. 

The Supreme Court’s interim order is likely to attract attention from taxpayers and GST practitioners dealing with situations involving overlapping adjudication and appellate proceedings.

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