In a recent decision, the Andhra Pradesh High Court addressed a dispute involving Baba Agriculture Export and the Union of India, among others. The case revolved around an assessment order issued under the Central Goods and Services Tax (CGST) Act, 2017. The petitioner contested the order on the grounds that it violated Rule 142(1A) and Section 75(4) of the CGST Act by not providing a show-cause notice or an opportunity for a personal hearing before the order was passed. This, they argued, rendered the order void from the beginning.
The respondents countered that the petitioner had engaged in the hearing process and had even requested additional time, implying a waiver of any objections. They also pointed out that the petitioner had an alternative remedy through an appeal. The central issue was whether the absence of a pre-show-cause notice under Rule 142(1A) invalidated the entire assessment proceedings under Section 73 of the CGST Act.
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The Court upheld its previous stance that non-compliance with Rule 142(1A), which requires a pre-show-cause intimation, invalidates the assessment process. Since no prior notice was issued, the assessment order was deemed legally unsustainable. Consequently, the Court set aside the Order-in-Original and remanded the matter back to the Assessing Authority to restart proceedings with the necessary notice. Additionally, the period from the original order to the High Court's decision was excluded from limitation considerations under Section 75(10). The writ petition was granted without any costs imposed.
Order date: 08 Oct 2025
Parties: Baba Agriculture Export v. Union of India & Ors.
Facts –
- The petitioner challenged the Order-in-Original No.70/2024-25-GST dated 25.02.2025 issued under Section 73 of the CGST Act, 2017, alleging violation of Rule 142(1A) and Section 75(4).
- It was contended that no show-cause notice (SCN) or opportunity of personal hearing was provided before passing the order, rendering it void ab initio.
- The respondents argued that the petitioner had participated in the hearing process and sought additional time, thereby waiving any objection. They also raised the ground of alternative remedy of appeal.
Issue –
- Whether failure to issue a pre-show cause notice under Rule 142(1A) vitiates the entire assessment proceedings under Section 73 of the CGST Act?
Order –
- The Court reiterated its consistent view that non-compliance with Rule 142(1A) — which mandates issuance of a pre-show-cause intimation — vitiates the entire assessment process.
- Since the record revealed no prior notice was issued before the Order-in-Original, the assessment order was held unsustainable in law.
- The Order-in-Original dated 25.02.2025 was set aside, and the matter was remanded to the Assessing Authority to conduct proceedings afresh after issuing the necessary notice under Rule 142(1A).
- The period from the date of the impugned order to the date of the High Court’s order was directed to be excluded for limitation under Section 75(10).
- The writ petition was allowed, with no order as to costs.
