Allahabad HC Stays GST Demand with 10% deposit for Lack of Pre-SCN

Ds Chewing Products Llp Vs State Of U.P. And 3 Others (Allahabad High Court)

Allahabad High Court, in DS Chewing Products LLP vs. State of U.P. & Others, granted interim relief to the petitioner by staying a GST demand order. The petitioner challenged the assessment order issued under Section 73 of the Goods and Services Tax Act, arguing that the Assessing Authority failed to issue a pre-show cause notice as required by law in 2020. The petitioner contended that the absence of such notice amounted to a violation of mandatory procedural safeguards, rendering the assessment order legally flawed.

In support of its argument, the petitioner relied on the Division Bench judgment in Skyline Automation Industries vs. State of U.P. (Writ-Tax No. 1512 of 2022), where the court ruled that failure to issue a notice under Rule 142(1A) of the GST Rules was a fundamental procedural defect that could not be remedied by subsequent communications. The Allahabad High Court noted that the Delhi High Court had taken a similar view in Gulati Enterprises vs. GST Authorities, where it quashed a show cause notice issued before the amendment of Rule 142(1A) on October 15, 2020. Given these precedents, the petitioner argued that the assessment proceedings suffered from a legal infirmity.