Interim Stay Granted on SCN Issued in DRC-01 Without Serving Notice in ASMT-10 | HC

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Mandatory GST notice compliance

Case Details: Sanmati Metals vs. State of Himachal Pradesh - [2025] 172 taxmann.com 24 (Himachal Pradesh)

Judiciary and Counsel Details

  • M.S. Ramachandra Rao, CJ. & Jyotsna Rewal Dua, J.
  • J.S. Bedi, Goverdhan Sharma, Advs. for the petitioner.
  • Rakesh Dhaulta, Additional Advocate General, Ms Priyanka Chauhan, Arsh Rattan & Sidharth Jalta, Deputy Advocate Generals, for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer, was issued a show-cause notice (SCN) in Form GST DRC-01 under Section 73(1) of the CGST Act, 2017, alleging discrepancies in tax filings. However, prior to issuing the SCN, the department failed to serve Form GST ASMT-10, as required under Rule 99 of the CGST Rules, 2017, which mandates notifying the assessee of any discrepancies and granting an opportunity for clarification. Aggrieved by this procedural lapse, the petitioner filed a writ petition before the High Court of Himachal Pradesh, challenging the validity of the SCN. The petitioner contended that compliance with Rule 99 is a mandatory procedural prerequisite, and the absence of Form GST ASMT-10 rendered the proceedings legally unsustainable. The petitioner further argued that the issuance of an SCN without prior notice violates principles of natural justice, as it deprives the assessee of an opportunity to explain or rectify the discrepancies before coercive proceedings are initiated.

High Court Held

The Hon’ble High Court of Himachal Pradesh held that the issuance of Form GST ASMT-10 under Rule 99 of the CGST Rules, 2017, is a mandatory procedural requirement before issuing a show-cause notice in Form GST DRC-01 under Section 73(1) of the CGST Act, 2017. The Court observed that non-compliance with this statutory mandate constitutes a procedural infirmity, rendering the subsequent proceedings untenable. Accordingly, the Court granted an interim stay on all further proceedings arising from the impugned SCN.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied