HC Upholds Assessment Order for Non-Response to GST Notices

Case Details: Shashi Contractors vs. State of U.P. - [2025] 174 taxmann.com 95 (Allahabad)

Judiciary and Counsel Details

• Arun Bhansali, CJ. & Kshitij Shailendra, J.
• Akhil Agnihotri for the Petitioner.
• Ankur Agarwal, S.C. for the Respondent.

Facts of the Case

The petitioner, a taxpayer under the CGST Act, was initially issued a notice under Section 61 of the CGST Act after discrepancies were identified in its tax returns following scrutiny. This was followed by a notice under Section 73 of the CGST Act, seeking an explanation for the discrepancies in the returns. Despite multiple reminders, the petitioner failed to respond to these notices. Consequently, the Assessing Officer (AO) issued an assessment order under Section 73(9) of the CGST Act, creating a demand which included tax, interest, and penalty. The petitioner challenged the assessment order before the Allahabad High Court, contending that the order violated Section 75(6) of the CGST Act due to a lack of reasons and Section 75(7) for not specifying the penalty amount.

High Court Held

The Hon’ble Allahabad High Court held that the assessment order was valid and justified. The Court observed that the petitioner’s failure to respond to the repeated show cause notices meant that the Assessing Officer was not required to anticipate potential defenses but was entitled to base its decision solely on the material available on record. The show cause notice clearly specified the tax, penalty, and interest liabilities, with the penalty described as “as per CGST Act, 2017,” fulfilling the requirements of Section 75(7). The Court further concluded that the assessment order provided sufficient reasoning for the conclusion that the petitioner was liable for the demand. As such, the writ petition was dismissed in favour of the revenue, upholding the levied tax, interest, and penalty.

List of Cases Referred to

• M/s New Manoj Medical Store v. State of U.P. and 2 others Writ Tax No. 979 of 2025 (para 8).