Allahabad HC Quashes Section 74 GST SCN Over Officer’s Prejudice

HCL Infotech Ltd. Vs State of Uttar Pradesh and 2 others (Allahabad High Court)

Summary: The Allahabad High Court considered a challenge to a show cause notice dated 22.07.2026 issued to HCL Infotech Ltd. under Section 74 of the UPGST Act, 2017 for FY 2017-18. The petitioner raised three principal objections: limitation, the effect of the earlier writ order dated 27.09.2024, and alleged prejudice reflected in paragraph 3(ग) of the impugned notice. After the submissions were completed, the petitioner also contended that proceedings under Section 73 had earlier been initiated for the same tax period through a notice dated 30.09.2023, which was dropped on 30.12.2023, and therefore a subsequent Section 74 notice could not be issued on the same grounds.

The record showed that the earlier Section 73 notice proposed a total demand of Rs.57612310.2, comprising tax, interest and penalty across several issues including imported-goods ITC, TRAN-1 credit, zero-rated supplies, unreconciled ITC and ITC reversal under Rules 42 and 43. Those proceedings were dropped on 30.12.2023. A subsequent Section 74 notice dated 03.08.2024 was challenged in the earlier writ proceedings, in which the High Court quashed the notice but expressly left it open to the authorities to initiate fresh Section 74 proceedings if the ingredients of fraud, wilful misstatement or suppression of facts to evade tax existed.

In the present proceedings, the High Court held that the earlier writ order had attained finality and had specifically permitted fresh proceedings under Section 74 subject to the stated condition. On limitation, the Court considered Section 75(3) of the Act and held that, in view of the positive direction issued by the writ Court, fresh proceedings could be undertaken within two years from communication of the order dated 27.09.2024. However, the Court found the observations in paragraph 3(ग) of the impugned notice to be out of line and indicative of prejudice, particularly as the prejudice appeared connected with the petitioner having earlier approached the Court and obtained relief.

On that ground alone, the impugned notice was held unsustainable and was set aside. The matter was remitted for issuance of a fresh Section 74 notice, if jurisdictional facts exist, preferably by an officer other than the officer who issued the impugned notice. The Court prescribed timelines for the fresh notice, reply, supply of documents and hearing, and directed that proceedings be concluded by 31.12.2026.

Challenge to Section 74 Show Cause Notice

The petitioner challenged the show cause notice dated 22.07.2026 issued under Section 74 of the UPGST Act, 2017 for FY 2017-18.

Three submissions were initially advanced on behalf of the petitioner. First, it was contended that the notice was beyond limitation, as the limitation to issue the notice had expired on 05.08.2024. The petitioner submitted that there was no provision permitting a fresh notice beyond that period and that the earlier order dated 27.09.2024 in Hcl Infotech Ltd Vs. Commissioner, Commercial Tax And Another, 2024:AHC:158274-DB contained no specific direction permitting such issuance.

Second, the petitioner submitted that the earlier writ Court order had recorded findings in its favour which affected the jurisdictional facts relied upon by the adjudicating authority.

Third, the petitioner alleged that paragraph 3(ग) of the impugned show cause notice contained recitals demonstrating prejudice against the petitioner.

After the submissions had been completed, the petitioner additionally contended that proceedings under Section 73 had already been initiated for the same tax period through notice dated 30.09.2023 and had subsequently been dropped or withdrawn on 30.12.2023. According to the petitioner, the same grounds could not subsequently form the basis of a Section 74 notice.

Earlier Section 73 Proceedings

The Court recorded that notice dated 30.09.2023 had been issued under Section 73(1) of the Act. The notice raised several issues concerning the petitioner’s ITC and tax position for FY 2017-18.

ITC on Import of Goods

The first issue concerned ITC availed on import of goods which, according to the notice, had not been substantiated with relevant evidence such as bills of entry. The proposed reversal of ITC was Rs.620875, with interest of Rs.670545 and penalty of Rs.62087, making the stated total Rs.1353507.

ITC Availed Through TRAN-1

The second issue concerned ITC availed through TRAN-1. The notice recorded CGST ITC of Rs.21931776 and proposed reversal together with interest of Rs.23686318 and penalty of Rs.2193177, with the stated total being Rs.47811271.

Zero-Rated Supplies

The third issue concerned zero-rated supplies made without payment of tax, including export and SEZ supplies declared in GSTR-9 but allegedly not substantiated with LUT and other relevant evidence.

The notice recorded taxable value of Rs.6222877 and proposed IGST of Rs.1120118, interest of Rs.1209727.4 and penalty of Rs.112011.8. The total figure stated in the demand summary was Rs.13565871.

Unreconciled ITC

The fourth issue concerned unreconciled ITC as per Table 12(F) of GSTR-9C. The notice recorded unreconciled IGST of Rs.474921 and proposed interest of Rs.512914 and penalty of Rs.47492, with the stated total being Rs.1035327.

ITC Reversal Under Rules 42 and 43

The fifth issue concerned exempted, nil-rated and non-GST outward supplies and the alleged non-reversal of ITC under Rules 42 and 43.

The notice proposed reversal comprising IGST of Rs.878330, CGST of Rs.397426 and SGST of Rs.1004221, together with interest of Rs.948596, Rs.429220 and Rs.1084558 respectively, and penalties of Rs.87833, Rs.39742 and Rs.100422 respectively. The stated total was Rs.4970348.

Total Demand Proposed in Earlier Notice

The demand summary in the Section 73 notice recorded total IGST tax of Rs.3094244, interest of Rs.3341782.4 and penalty of Rs.309423.8, while the CGST figures were Rs.22329202, Rs.24115538 and Rs.2232919 respectively, and the SGST figures were Rs.1004221, Rs.1084558 and Rs.100422 respectively.

The grand total stated in the notice was Rs.57612310.2, comprising tax of Rs.26427667, interest of Rs.28541878.4 and penalty of Rs.2642764.8.

The Section 73 notice was dropped on 30.12.2023.

Earlier Section 74 Notice and Writ Proceedings

After the Section 73 proceedings were dropped, another show cause notice on the same issues was issued under Section 74 of the Act on 03.08.2024.

The petitioner challenged that notice in Writ Tax No. 1396 of 2024. Among other grounds, the petitioner specifically contended that the earlier Section 73 proceedings had been dropped and that the same issue could not be reopened through Section 74 proceedings.

The earlier writ Court considered the distinction between Sections 73 and 74 of the CGST Act. It recorded that Section 73 operates in cases of wrongly availed or utilised ITC for reasons other than fraud, wilful misstatement or suppression of facts to evade tax, whereas Section 74 applies where such circumstances exist.

The earlier Court held that, for jurisdiction to arise under Section 74, the adjudicating authority must expressly mention in the show cause notice that it was prima facie satisfied that ITC had been wrongly availed or utilised due to fraud, wilful misstatement or suppression of facts to evade tax.

The earlier Section 74 notice dated 03.08.2024 was quashed because the basic ingredient was lacking. However, the writ petition was allowed while leaving it open to Respondent No. 2 to initiate fresh proceedings under Section 74 by issuing a fresh show cause notice containing the basic ingredients regarding fraud, wilful misstatement or suppression of facts to evade tax, if they so exist.

Effect of Earlier Writ Court Order

The High Court in the present proceedings noted that the earlier order dated 27.09.2024 had attained finality. Neither side was shown to have challenged that order before the Supreme Court, and it was not the petitioner’s case that it had sought review.

The Court therefore held that the petitioner could not successfully contend at this stage that the earlier order did not permit the Revenue to issue another notice under Section 74.

The Court specifically noted two aspects of the earlier order. First, the writ Court had not reached a finding that there was no jurisdiction to initiate proceedings under Section 74. Second, paragraph 28 had expressly granted liberty to initiate fresh proceedings under Section 74, subject to the existence of fraud, wilful misstatement or suppression of facts to evade tax.

The Court considered the words “if they so exist” in that direction to be material.

Limitation Under Section 75(3)

The petitioner had challenged the impugned notice as being beyond limitation. The Court considered Section 75(3) of the Act, which provides that where an order is required to be issued pursuant to the direction of an Appellate Authority, Appellate Tribunal or court, such order shall be issued within two years from the date of communication of that direction.

The Court observed that Section 75(3), read literally, contemplates a situation where an adjudication order has been set aside by an Appellate Authority, Appellate Tribunal or Court and a fresh order is required to be issued.

However, the Court considered the provision together with the specific direction contained in the earlier writ order. It held that, although no final adjudication order had been passed and only the show cause notice had been set aside, the specific direction of the writ Court meant that the limitation to pass a fresh order existed up to two years from communication of the order dated 27.09.2024.

The Court stated that adopting a literal reading of the word “order” in Section 75(3) so as to conclude that no limitation survived for issuance of a fresh show cause notice would defeat the ends of justice and contradict the earlier writ order, which had attained finality.

The Court further held that the direction of the writ Court had to be given effect to and that, so long as compliance by the Revenue was within two years from communication of the order dated 27.09.2024, it remained within the limitation prescribed by law in the circumstances of the case.

Prejudice Found in Impugned Show Cause Notice

The Court separately considered the observations contained in paragraph 3(ग) of the impugned show cause notice.

The Court held that those observations were “clearly out of line”. It observed that they were neither required in the context of the dispute nor desirable to be allowed to stand.

The Court further held that merely expunging those observations would not resolve the matter because the plain recital indicated an element of prejudice on the part of the adjudicating authority. The Court considered the matter further aggravated to the extent that the prejudice appeared to stem from the petitioner having approached the Court earlier and having obtained relief.

It was solely for the reason of the element of prejudice noticed that the High Court held the impugned notice could not be sustained and set it aside.

Fresh Section 74 Proceedings Permitted

While setting aside the impugned notice, the Court remitted the matter for issuance of a fresh notice under Section 74, if the jurisdictional facts exist.

The Court directed the Additional Commissioner (Grade 1), State Tax, Gautam Budh Nagar, to assign the matter to an officer other than the officer who had issued the impugned show cause notice. The fresh officer was specifically advised to apply mind to the facts of the case neutrally and without being prejudiced by any observation made in the order.

Directions for Fresh Proceedings

1. The fresh notice, if necessary, may be issued within two weeks from the date of the order.

2. If such notice is issued, the petitioner shall have four weeks to respond and file its written reply.

3. If any RUDs and/or non-RUDs are required, the petitioner may make an appropriate application along with its reply.

4. Documents requested by the petitioner and available with the adjudicating authority shall be supplied within the next two weeks. If any document is declined, an appropriate reasoned order shall be passed and communicated to the petitioner.

5. Thereafter, an appropriate hearing date shall be fixed with at least 15 days’ advance notice to the petitioner, followed by a reasoned and speaking order.

Proceedings to Be Concluded by 31.12.2026

The Court noted that the period of limitation was expiring and directed that the proceedings be concluded as expeditiously as possible without allowing undue or long adjournments.

The Court specified that the proceedings should be concluded by 31.12.2026.

Final Decision

The Allahabad High Court set aside the impugned show cause notice dated 22.07.2026 under Section 74 of the UPGST Act, 2017 on the ground that the element of prejudice noticed in the notice rendered it unsustainable.

The Court did not finally preclude fresh proceedings under Section 74. Instead, the matter was remitted for issuance of a fresh notice if the jurisdictional facts exist, with the matter to be assigned to an officer other than the officer who issued the impugned notice and with directions for neutral consideration, supply of documents, opportunity to reply and hearing.

The writ petition was accordingly disposed of.

Cases Discussed

• Hcl Infotech Ltd Vs. Commissioner, Commercial Tax And Another, 2024:AHC:158274-DB (Allahabad High Court)

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

1. Heard Sri Atul Gupta, Learned counsel for the petitioner and Sri Ankur Agarwal, learned Standing Counsel for the State.

2.Challenge has been raised to the show cause notice dated 22.07.2026 issued to the petitioner under Section 74 of the UPGST Act, 2017 (hereinafter referred to as ‘the Act ‘) for Financial Year 2017-18.

3. Three fold submissions have been advanced. First, it has been submitted that the notice dated 22.07.2026 had been issued beyond limitation. The limitation to issue the notice expired on 05.08.2024. In absence of any provision in the Act to allow for issue of fresh notice beyond that period of limitation and in absence of any specific direction issued by the writ Court in its order dated 27.09.2024 in Hcl Infotech Ltd Vs. Commissioner, Commercial Tax And Another, 2024:AHC:158274-DB, the impugned show cause notice is time barred and therefore without jurisdiction. In any case, it may never have been issued with reference to Section 75(3) of the Act. Second, it has been submitted that the order of the Writ Court had clearly recorded findings in favour of the petitioner. Those hit on the jurisdictional facts claimed to be in existence, by the adjudicating authority.

4. Third, it has been submitted that the impugned show cause notice contains recital in paragraph 3 (ग) clearly indicating prejudice against the petitioner. After submissions were complete and order was being dictated, another submission has been advanced that the revenue authorities had no jurisdiction to issue impugned show cause notice inasmuch as they had first initiated proceedings under Section 73 of the Act for the same tax period, vide show cause notice dated 30.09.2023. It was dropped/withdrawn on 30.12.2023. On the same grounds, the second show cause notice may not have been issued under Section 74 of the Act.

5. On the other hand, learned Standing Counsel would contend, once the writ Court granted liberty to the revenue authorities to issue fresh show cause notice under Section 74 of the Act – vide order dated 27.09.2024 passed in Hcl Infotech Ltd (supra), by own force of law created under Section 75(3) of the Act, fresh notice may have been issued before expiry of 2 years from the date of communication of the order of the writ Court dated 27.09.2024. To the extent the impugned show cause notice has been issued within that time, there is no bar of limitation. On the second and fourth issue, it has been submitted, all contentions being advanced were raised before the writ Court on the first occasion in Hcl Infotech Ltd (supra). On a holistic consideration of such submissions, the writ Court quashed the earlier show cause notice issued under Section 74 of the Act dated 03.08.2024 and thereafter left it open to the revenue authorities to issue a fresh show cause notice under Section 74 of the Act. Therefore it cannot be gain said that the writ Court had adjudicated the merit issue or that the revenue lost jurisdiction to issue a fresh notice either occasioned by the earlier show cause notice issued under Section 73 of the Act dated 30.9.2023 (later dropped) or for reason of later show cause notice dated 03.08.2024 issued under Section 74 of the Act being quashed by the writ Court. On the third issue, learned Standing Counsel fairly states that the observations contained in paragraph 3 (ग) of the impugned show cause notice are out of place.

6. Having heard learned counsel for the parties and having perused the record, the facts are undisputed. In that, notice dated 30.09.2023 was issued to the petitioner under Section 73(1) of the Act on the following counts:

“1. ITC availed on import of goods, however, not substantiated with relevant evidences like BOE

You are hereby directed to substantiate with relevant evidences whether the goods have been imported and IGST has been paid or not during the course of import of goods.

If IGST not paid by you, then show cause why not the “ITC availed on said import” should be reversed along with interest as per section 50 and applicable penalty in the following manner:

Particulars	IGST	CGST	SGST	Total
Reversal of ITC	620875	0	0	620875
Interest @ 18%	670545	0	0	670545
Penalty	62087	0	0	62087
Total	1353507	0	0	1353507

2. ITC availed through TRAN-1, however, not substantiated with relevant evidences:

	CGST	SGST
ITC availed through TRAN-1	21931776	00

You are hereby directed to furnish explanation with supporting evidences whether the ITC availed through TRAN-1 form has been substantiated by the appropriate authority in accordance with provisions of Section 140 of the CGST Act. If not verified by the proper officer, then show cause why not the same should be reversed along with interest as per section 50 and applicable penalty in the following manner:

Particulars	IGST	CGST	SGST	Total
Reversal of ITC	0	21931776	0	21931776
Interest @ 18%	0	23686318	0	23686318
Penalty	0	2193177	0	2193177
Total	0	47811271	0	47811271

3. Zero-rated supply made without payment of tax (Export and SEZ) declared in GSTR-9, however, not substantiated with LUT and other relevant evidences:

	Taxable value	IGST	SGST	CGST	CESS
Zero-rated supply declared in GSTR-9	6222877	0	0	0	0

On verification from the portal, it has been found that no RFD-11 submitted by the company for the financial year 2017-18. The company is directed to provide the reason for non-payment of tax on above mentioned zero-rated supply in the absence of LUT. If the company is unable to explain such short/non-payment of tax, then show cause why the tax along with interest as per section 50 and applicable penalty should not be charged upon the company in the following manner: –

Particulars	IGST	CGST	SGST	Total
Short paid tax @ 18%	1120118	0	0
Interest @ 18%		0	0
Penalty	112011.8	0	0
Total	2441857.2	0	0

4. Unreconciled ITC as per table 12(F) of GSTR-9C:

Unreconciled ITC	ITC to be reversed
	IGST	SGST	CGST	CESS
	474921	0	0

You are hereby directed to furnish whether the unreconciled ITC has been paid or not. If not deposited by you, then show cause why not the same should be reversed along with interest as per section 50 and applicable penalty in the following manner:

Particulars	IGST	CGST	SGST	Total
Reversal of ITC	474921	0	0	474921
Interest @ 18%	512914	0	0	512914
Penalty	47492	0	0	47492
Total	1035327	0	0	1035327

5. You have made exempted/nil rated/non-GST outward supplies; however, it has been noticed that reversal of ITC as per rule 42 and 43 not been done. Why proceeding for its reversal may not be initiated. Clarification is hereby expected;

S. No	Issue	Table No. in GSTR-09	Taxable value	SGST	CGST	IGST	Cess	Total
A	B	C	D	E	F	G	H	I
1	Total supplies	5N+10-11	43,12,80, 476.65	2,74,29,5 20.55	2,74,29, 520.55	2,06,34, 534.39	0	7,54,93,5 75.49

mjm,j,j

2	Exempt Supplies	5C+5D+5 E+5F	1,19,32,3 91.67	0	0	0	0	0
3	Common input tax credit	60+13-12	–	2,06,99,2 97.18	4,26,31, 073.18	3,54,47, 728.5	0	9,87,78,0 98.86
4	ITC to be reversed	(S.No.2/ S.No.1)(x) S.No. 3	0	5,72,694. 88	11,79,4 89.2	9,80,74 5.02	0	27,32,92 9.1
5	ITC reversed as per GSTR-09	7C+7D	0	1,75,268	1,75,26 8	1,02,41 5	0	4,52,951
6	Differenc e/Excess ITC claimed	S.No.4(-) S.No. 5	0	3,97,426. 88	10,04,2 21.2	8,78,33 0.02	0	22,79,97 8.1

You are here by directed to furnish whether the excess claimed ITC has been paid or not. If not deposited by you, then show cause why not the same should be reversed along with interest as per section 50 and applicable penalty in the following manner:

Particulars	IGST	CGST	SGST	Total
Reversal of ITC	878330	397426	1004221	2279977
Interest @ 18%	948596	429220	1084558	2462374
Penalty	87833	39742	100422	227997
Total	1914759	866388	2189201	4970348

On the basis of all the anomalies discussed above, your total proposed demand is being summarized as below:

Cause of Demand	Act	Place of Supply	Tax	Interest	Penalty	Total
Point No. 1	IGST	U.P.	620875	670545	62087	1353507
	CGST	U.P.	0	0	0	0
	SCST	U.P.	0	0	0	0
Point No. 2	IGST	U.P.	0	0	0	0
	CGST	U.P.	21931776	23686318	2193177	47811271
	SCST	U.P.	0	0	0	0
Point No. 3	IGST	U.P.	1120118	1209727.4	112011.8	13565871
	CGST	U.P.	0	0	0	0
	SCST	U.P.	0	0	0	0
Point No. 4	IGST	U.P.	474921	512914	47492	1035327
	CGST	U.P.	0	0	0	0
	SCST	U.P.	0	0	0	0
Point No. 5	IGST	U.P.	878330	948596	87833	1914759
	CGST	U.P.	397426	429220	39742	866388
	SCST	U.P.	1004221	1084558	100422	2189201
Total	IGST	U.P.	3094244	3341782.4	309423.8	6745450.2
	CGST	U.P.	22329202	24115538	2232919	48677659
	SCST	U.P.	1004221	1084558	100422	2189201
Grand			26427667	28541878.4	2642764.8	57612310.2
Total

That notice was dropped on 30.12.2023.

7. Thereafter, another show cause notice on the same issues was issued to the petitioner, this time under Section 74 of the Act. It is dated 03.08.2024. It was challenged by the petitioner by means of earlier writ petition being Writ Tax No. 1396 of 2024. Amongst others, it was specifically pressed by the petitioner that the second show cause notice (issued under Section 74 of the Act) was bad in law for reason of earlier notice issued under Section 73 of the Act having been dropped. Contention of the petitioner has been noted in paragraph-10 of the order of the writ Court. Analysis of the same has been made in subsequent paragraphs. Thereafter, it was reasoned as below:

“22. ….The field of operation of Section 73 and 74 of the CGST Act is altogether different i.e. Section 73 operates in all other cases of wrongly availed or utilized Input Tax Credit for any reason other than fraud or wilful mis-statement or suppression of facts and Section 74 comes into play when the excessive Input Tax Credit has been availed due to some fraud or wilful mis-statement or suppression of facts. Thus it is patently manifest that for deriving the jurisdiction to initiate proceedings under Section 74 of the CGST Act, the adjudicating authority must expressly mention in the Show Cause Notice that he is prima-facie satisfied that the person has wrongly availed or utilized Input Tax Credit due to some fraud or a wilful mis-statement or suppression of facts to evade tax and that must be specifically spelled out in the Show Cause Notice. Once the aforesaid basic ingredient of the Show Cause Notice under Section 74 of the CGST Act is missing, the proceedings becomes without jurisdiction as the adjudicating authority derives jurisdiction to proceed under Section 74 of the CGST Act only when the basic ingredients to proceed under Section 74 are present. ”

8. After considering the law laid down by the Supreme Court in that context, the writ Court concluded that the show cause notice dated 03.08.2024 did not make a whisper either that the petitioner had wrongly availed or utilised ITC occasioned by fraud or willful misstatement or suppression of facts to evade tax. That basic ingredient of Section 74 found lacking, the writ petition was allowed on the following terms:

“28. Accordingly, this writ petition is allowed. The Show Cause Notice dated 03.08.2024 is quashed leaving it open for Respondent No. 2 to initiate fresh proceedings under Section 74 of the CGST Act against the petitioner by issuing a fresh Show Cause Notice containing the basic ingredients regarding fraud or wilful mis-statement or suppression of facts to evade tax, if they so exist. ”

(emphasis supplied)

9. The above order of the writ Court has attained finality. Neither side is shown to have challenged the same before the Supreme Court. Also, it is not the case of the petitioner that it had sought any review of that order. Consequently, it cannot be successfully canvassed by the petitioner, at this stage, that the order of the writ Court did not allow the revenue another opportunity to issue a notice under Section 74 of the Act. First, the writ Court is not shown to have reached any finding that there was no jurisdiction to initiate proceeding under Section 74 of the Act and second, by virtue of specific direction contained in paragraph 28 of the order, leave was granted to the adjudicating authority to initiate fresh proceeding under Section 74 of the Act, subject to the condition that there must exist ingredients of fraud or willful misstatement or suppression of facts to evade tax. By making that direction conditional and by employment of the words ‘if they so exist’ there survives no doubt in that regard.

10. On the issue of limitation, besides the fact that the writ Court had issued a positive direction allowing the revenue authority to initiate fresh adjudication proceedings, provision of Section 75(3) of the Act is also relevant. For ready reference, it reads as below :

“Section 75. General provisions relating to determination of tax.-

(1). …

(2.) …

(3) Where any order is required to be issued in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two years from the date of communication of the said direction.”

11. In the first place, the section contemplates remand of a proceeding after adjudication order may have been set aside by an Appellate Authority, Appellate Tribunal or a Court. Therefore it has to be acknowledged that where an adjudication order may have been passed but is later set aside by the Appellate Authority, Appellate Tribunal or a Court, the revenue would have limitation to pass a fresh order. That limitation is two years from the communication of the order of the Appellate Authority, Appellate Tribunal or a Court, as the case may be.

12. Read together with the direction issued by the writ Court, it cannot be disputed that even though, no final order had been passed but only show cause notice had been set aside, by virtue of specific direction issued by the writ Court, the limitation to pass a fresh order existed upto two years from the communication of the order dated 27.09.2024.

13. To reason that no limitation survived to issue a fresh cause notice under Section 74 of the Act by reading the provisions of Section 75(3) of the Act literally, may limit its application only to cases where final adjudication order may have been set aside. It would defeat the ends of justice and contradict the order of the writ Court that has attained finality. Though the legislature may have worded the provision in the manner noticed above – to refer to only an order, by virtue of specific direction issued by the writ Court (in the instant case), no submission may be successfully advanced on the strength of strict reading of the word ‘order’ appearing in Section 75(3) of the Act. If at all that issue should have been raised and canvassed at the relevant time before the writ Court or in proceedings that may have arisen upon the order dated 27.09.2024 passed by the Writ Court. Since the order has long attained finality, it does not survive to the petitioner to now raise an objection in that regard.

14. In any case once a positive direction has been issued by the writ Court, that direction had to be given effect to by the revenue authorities. To the extent, compliance made by the revenue authorities is within two years from the date of communication of the order dated 27.09.2024 passed by the writ Court, the same remains within the limitation prescribed by law. If the writ Court had not made any observation for the future course to be adopted and if the writ Court had not left it open to the revenue to initiate fresh proceedings under Section 74 of the Act, the matter may have been dealt with differently. Here, positive writ issued cannot be diluted at the subsequent stage i.e. at the stage of giving effect to the order of the writ Court.

15. Last, on the observations made by the adjudicating authority, in paragraph 3 (ग) of the impugned show cause notice, it has been recited as below:

16. Those observations are clearly out of line. Neither those were required to be made in the context of the dispute nor those are desirable to be allowed to stand. However, the matter may not rest even if those observations are expunged. Plain recital of the same does indicate element of prejudice existing with the adjudicating authority. Further, to the extent that prejudice stems from the fact that the petitioner had approached this Court on earlier occasion and had been granted relief, compounds the matter further.

17. Solely for reason of element of that prejudice noticed, the impugned notice cannot be sustained and is set aside. The matter is again remitted for issuance of notice under Section 74 of the Act, if jurisdictional facts exist. For that purpose, the following further observations are being made:

i. The Additional Commissioner (Grade 1) State Tax, Gautam Budh Nagar, may assign the matter to any officer other than the officer who has issued the impugned show cause notice with a clear advice to apply mind to the facts of the case neutrally, without being prejudiced by any observation made in this order.

ii. Such fresh notice, if necessary, may be issued within a period of 2 weeks from today.

iii. If such notice is issued, petitioner shall have four weeks’ time to respond to the same and file its written reply.

iv. If any RUDs and/or non-RUDs are required, the petitioner shall make proper application in that regard along with its reply.

v. All documents that may be prayed for by the petitioner and, as may be available with the adjudicating authority may be supplied to the petitioner within next two weeks. If any document is to be declined, appropriate reasoned order may be passed and communicated to the petitioner in that regard.

vi. Thereafter, appropriate date for hearing may be fixed with at least 15 days’ advance notice to the petitioner and reasoned and speaking order may be passed thereon, thereafter.

18. Since period of limitation is expiring, we further provide that the proceedings may be concluded as expeditiously as possible without allowing for any undue or long adjournments, by 31.12.2026.

19. Writ petition is accordingly disposed of.