The Delhi High Court quashed an ex-parte GST assessment order against M/s RBC Financial Services Pvt. Ltd. due to a vague show-cause notice and lack of reasoning in the assessment. The petitioner challenged the assessment for the fiscal year 2019-20, which demanded a payment of ₹1,09,404, including tax, interest, and penalty. The petitioner argued that the show-cause notice was not properly served and was a generic template lacking specific details or reasons for the tax demand under Section 73. Furthermore, the final assessment was passed without addressing the merits of the case, merely citing the petitioner's non-appearance.
The Court found that the show-cause notice did not provide any factual basis for the proposed tax demand and merely instructed the petitioner to upload certain documents. Similarly, the assessment order failed to explain how the tax liability was determined. The Court ruled that a valid show-cause notice must clearly state the reasons and grounds for invoking Section 73, and a template notice does not meet legal standards. Consequently, the assessment order was set aside.
Read More: GST - Delhi High Court: No further penalty leviable once tax and interest is paid under Section 74(5) prior to issuance of show cause notice [Order attached]
The Court directed the petitioner to appear before the adjudicating authority on December 15, 2025, ensuring they have the opportunity to file replies and present their case. The GST portal access for the petitioner must be restored within a week to facilitate compliance. A fresh order will be issued after considering all submissions. The Court also noted that the validity of Notification 56/2023 remains undecided, pending the Supreme Court's decision and related cases in the Delhi High Court. The writ petition was disposed of with these directions.
Parties: M/s RBC Financial Services Pvt. Ltd. v. Union of India & Ors.
Order Date: 18 November 2025
Facts
- The petitioner challenged the assessment order dated 30.05.2024 for FY 2019–20 which demanded ₹1,09,404 (tax, interest, penalty).
- The challenge also included the validity of Notifications 9/2023 and 56/2023 issued under Section 168A extending limitation, which are already pending adjudication before the Supreme Court (SLP 4240/2025).
- The petitioner argued that the Show Cause Notice was never effectively served or brought to their knowledge. The SCN was a template-style notice containing no foundational facts or reasons for invoking Section 73. The final assessment was passed ex-parte, merely citing non-appearance, without addressing merits.
- The Court examined the SCN and observed that it did not disclose any basis for the proposed demand, except for directing the petitioner to upload certain documents.
- Even the assessment order lacked reasoning and did not record how liability was established.
Issue
- Whether a GST assessment order can be sustained when the show-cause notice is vague and unreasoned, and the final order is passed ex-parte without disclosing the basis of tax liability?
Order
- The Court held that a valid SCN must disclose reasons, factual basis, and grounds for invoking Section 73; a template notice is legally insufficient.
- Since both the SCN and the assessment order lacked reasons, the proceedings stood vitiated. The assessment order dated 30.05.2024 was set aside.
- The petitioner was directed to appear before the adjudicating authority on 15 December 2025 at 11:30 AM, and the authority must grant a full opportunity to file replies and be heard.
- The GST portal access for the petitioner must be restored within one week to enable compliance. A fresh order shall be passed after considering all submissions.
- The Court clarified that the validity of Notification 56/2023 remains open, subject to the Supreme Court’s decision and the pending Engineers India Ltd. batch before Delhi HC.
- Writ petition disposed of with directions.
