A. M. Marketplaces Pvt. Ltd. Vs Union of India (Bombay High Court)
The petition before the Bombay High Court raised a legal issue concerning the interpretation of Sections 73(2) and 73(10) of the Central Goods and Services Tax Act, 2017 (CGST Act), specifically whether a mandatory time gap of three months must be maintained between the issuance of a show cause notice and the passing of the final adjudication order.
At the outset, the Court noted that the petitioner was not pressing certain reliefs. Reference was made to an earlier procedural order dated 9 January 2025 dealing with deficiencies in recording service of notices by the Registry and directing issuance of administrative instructions to ensure proper verification of service in future cases.
The substantive issue before the Court was whether the statutory scheme under Section 73 of the CGST Act requires a minimum three-month period between issuance of notice under Section 73(2) and the passing of the order under Section 73(10). The petitioner relied on decisions of other High Courts interpreting these provisions to mean that such a gap is mandatory.
The Court examined the reasoning adopted by the Delhi High Court, which held that Section 73(10) prescribes the outer time limit of three years for passing an adjudication order, while Section 73(2) mandates that a show cause notice must be issued at least three months prior to that outer limit. According to that interpretation, the purpose of Section 73(2) is to ensure that the taxable person has a minimum period of three months to respond to the notice and be heard meaningfully before an adverse order is passed. The three-month period was therefore treated as mandatory, not discretionary.
