Case Law Details
B.K. Steels Vs Assistant Commissioner (State Tax) (Telangana High Court)
The writ petition concerned assessment proceedings for Financial Year 2022–23 under Section 74 of the Goods and Services Tax Act, 2017. The dispute arose after an earlier common order of the Telangana High Court dated 25.07.2024 in W.P. Nos. 18654 and 18766 of 2024 had set aside the assessment order dated 30.05.2024 on the ground that the petitioner had not been granted the personal hearing required under Section 75(4) of the Act.
In the earlier order, the High Court restored the matter to the Assessing Officer with specific directions to provide the petitioner a personal hearing and pass a fresh order in accordance with law. The Court also directed that no fresh notice was required and permitted the petitioner to file a reply to the existing show cause notice within seven days and raise all available grounds during the personal hearing.
Following the remand, instead of adjudicating on the original show cause notice after granting personal hearing, the Assessing Officer issued a second show cause notice and thereafter passed a fresh adjudication order dated 11.03.2026 under Section 74.
The petitioner challenged the impugned order, contending that the Assessing Officer had failed to comply with the High Court’s earlier directions. It was also submitted that the petitioner’s reply had not been duly considered. The petitioner further pointed out that in another connected matter relating to Financial Year 2023–24, the High Court had already set aside a similar assessment order passed after issuance of a fresh show cause notice and had remanded the matter with liberty to decide the case on the basis of the first show cause notice.
The respondents argued that there was no material difference between the original and the second show cause notices and, therefore, the petitioner had suffered no prejudice.
The High Court declined to examine the merits of the allegations forming the basis for invoking Section 74. Instead, it confined itself to the legality of the procedure adopted after remand. The Court held that its earlier order had expressly required the Assessing Officer to adjudicate on the first show cause notice, after granting the petitioner a personal hearing and considering the reply filed by the petitioner.
The Court observed that the Assessing Officer was obliged to comply with those directions and could not issue a second show cause notice in place of completing adjudication on the original notice. It held that adopting such a course was not permissible in view of the earlier judicial directions and, in effect, amounted to overreaching the order of the High Court, which could not be permitted.
Noting that a similar course had already been disapproved in another writ petition involving the same petitioner, the Court found it appropriate to interfere on this legal ground.
Accordingly, the High Court set aside the impugned adjudication order dated 11.03.2026 and remanded the matter to the Assessing Officer. The Assessing Officer was directed to pass a fresh order on the basis of the first show cause notice, after complying with the requirement of personal hearing and after duly considering the petitioner’s reply, in accordance with law.
The writ petition was disposed of without any order as to costs, and all pending miscellaneous applications were directed to stand closed.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Sri Goondla Venkateswarlu, learned counsel appears for petitioner.
Sri Swaroop Oorilla, learned Special Government Pleader for State Tax appears for respondents.
2. The impugned proceedings relate to Financial Year 2022-23 in respect of which after the remand by this Court vide common order dated 25.07.2024 in Writ Petition Nos.18654 and 18766 of 2024, a fresh show cause notice was issued leading to passing of the order dated 11.03.2026 under Section 74 of the Goods and Services Tax Act, 2017 (for short ‘the Act’). The text of the order passed in those Writ Petitions is extracted hereunder as it has some bearing on the outcome of the present Writ Petition.
“3. Learned counsel for the parties fairly admitted that a right of personal hearing as envisaged under Section 75(4) of the Goods and Services Tax Act, 2017 has not been provided to the petitioner before passing Assessment Order and therefore. it is agreed that the Assessment Order may he set aside and the Assessing Officer may be directed to provide personal hearing to the petitioner and pass a fresh order in accordance with I ow.
4. In view‘ of the consensus arrived at, Assessment Order dated 30.05.2024 is set aside. The matter is restored back in the file of Assessing Officer, who shall give personal hearing to the petitioner on 08.08.2024 at 11:30 A.M. or any other date as per Assessing Officer’s convenience. For this purpose, !to fresh notice trill be required to be issued to the petitioner. The petitioner will be at liberty to raise all possible grounds during personal hearing.
5. The petitioner may file reply to the show cause notice within 7 days from today.
The Writ Petitions are disposed of. No costs.’
3. What has happened after the remand by this Court is that the Assessing Officer without passing a fresh assessment order after compliance of the personal hearing requirement as per liberty granted by this Court has issued a second show cause notice and decided vide impugned order dated 11.03.2026.
4. Learned counsel for the rival parties have addressed us on the permissibility of the Assessing Officer to undertake an exercise despite an order passed by this Court in effect confining the adjudication to the show cause notice issued upon the petitioner.
5. The impugned order covers Financial Year 2022-23 which was the subject matter of Writ Petition No.18766 of 2024.
6. Learned counsel for the petitioner submits that a reply of the petitioner was not duly considered. Learned counsel for the petitioner further pointed out that in the other connected Writ Petition No.18654 of 2024 which relates to the Financial Year 2023-24, similar action has been taken by issuance of a fresh show cause notice and an adjudication order passed thereupon confirming the demand on grounds which were not taken in the show cause notice. It is submitted that vide order dated 11.06.2026 in W.P.No.17540 of 2026, this Court has set aside the fresh assessment order in W.P.No.18654 of 2024 while granting liberty to the Proper Officer to pass order afresh on the first show cause notice. Similar order may be passed in the present writ petition.
7. Learned counsel for the respondents on the other hand submits that there is no difference in the show cause notice issued at the first instance and the show cause notice upon which the adjudication has been made after the remand by this Court. As such, in effect, the petitioner has not suffered any prejudice.
8. We have heard the learned counsel for the parties.
9. Bereft of getting into the details of ingredients which have been taken to invoke the provision of Section 74 of the Act in the first show cause notice or the notice issued for the same Financial Year at the second instance after the remand leading to the impugned adjudication, we are of the considered view that in the light of the directions passed by this Court vide common order dated 25.07.2024 in the Writ Petitions referred to hereinabove. the Assessing Officer was obliged to adjudicate on the show cause notice after giving a personal hearing to the petitioner and upon consideration of any reply furnished by him. The course adopted by the Assessing Officer to issue a second show cause notice without carrying out the adjudication proceeding was something which was not permissible in view of the directions passed by the Court in the previous round of litigation. Such a course on the part of the Assessing Officer would in effect amount to overreaching the order of this Court, which cannot be permitted. In similar circumstances, vide order dated 11.06.2026 in W.P.No.17540 of 2026, this Court has remanded the matter to the Proper Officer in W.P.No.18654 of 2024 in the case of the same petitioner. Therefore, on this legal ground, we are constrained to interfere in the impugned adjudication order by setting it aside while giving an opportunity once again to the Assessing Officer to pass an order on the basis of the first show cause notice and compliance of the personal hearing after due consideration of the reply furnished by the petitioner, in accordance with law.
10. Accordingly, the impugned order is set aside. The matter is remanded to the Assessing Officer.
The instant Writ Petition is accordingly disposed of There shall be no order as to costs.
Miscellaneous applications, if any pending, shall stand closed.
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