Vague SCN Based on Non-Existent Audit Quashed | HC

Case Details: Abbott Healthcare (P.) Ltd. vs. Excise and Taxation Commissioner, Punjab [2026] 185 taxmann.com 471 (Punjab & Haryana)

Judiciary and Counsel Details

• Deepak Sibal & Lapita Banerji, JJ.
• Bharat Raichandani, Rana Gurtej Singh & Marmik Kamdar, Advs. for the Petitioner.
• Sourabh Kapoor, Addl. AG, Brijesh Mittal & Simranpreet Singh, Advs. for the Respondent.

Facts of the Case

The assessee company was issued a show cause notice (SCN) under section 73(1) of the CGST Act, read with the Punjab GST Act and IGST, wherein allegations were raised regarding excess input tax credit (ITC) as per GSTR-9 tables 8A and 8D, ITC mismatches with financials and GSTR-2A, undischarged liability, and short payment under the reverse charge mechanism (RCM). The SCN was stated to be based on a special audit conducted by the Comptroller and Auditor General of India (CAG). It was, however, admitted that CAG had conducted no audit of the assessee company. The audit forming the basis of the SCN was, in fact, a CAG audit of the GST department in the State of Punjab. Thus, the SCN was premised on audit of GST department, and not on an audit of the assessee company. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the very foundation of the SCN was factually incorrect. It was noted that the SCN was based on a special audit by CAG. No audit of the assessee company had been conducted by CAG and the audit relied upon was in respect of the GST department in the State of Punjab. Further, it was held that the SCN was vague as it disclosed no basis or particulars for the alleged excess ITC, mismatches, undischarged liability, or short payment under RCM. It was observed that the law mandated disclosure of specific details of tax liability or wrongly availed ITC in the notice itself. Consequently, the SCN was set aside with liberty to proceed as per law.