In a recent decision by the High Court of Jammu & Kashmir and Ladakh, the case of Zakir Hussain v. Union of India & Ors. addressed the issue of late replies to show cause notices (SCNs) under the GST framework. The petitioner, a contractor registered under GST, faced a demand order for the fiscal year 2020-21 amounting to ₹15,44,922. This demand was issued by the State Taxes Officer (STO) following an SCN that required a response by December 30, 2024. The petitioner submitted his reply on January 20, 2025, which was after the deadline but before the final order was passed. However, the STO disregarded this late reply, treating the situation as if no response had been made.
The petitioner argued that ignoring the reply violated the principles of natural justice. The court examined whether replies submitted after the SCN deadline but before the final order must be considered. It concluded that the GST Act does not impose a strict deadline for responses to SCNs. The court emphasized that if a reply is received before the final order, it should be considered to uphold justice and fairness.
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Consequently, the court set aside the STO's order, instructing them to issue a new, reasoned order after taking the late reply into account and providing an opportunity for a hearing. The court also ruled that any tax already collected would depend on the outcome of the new order. This decision underscores the importance of considering all relevant submissions in tax proceedings to ensure fairness.
Case Title: Zakir Hussain v. Union of India & Ors.
Order Date: 10 October 2025
Facts:
- The petitioner, a GST-registered contractor, challenged a demand order dated 26.02.2025 issued under Section 73(9) of the SGST Act by the State Taxes Officer (STO), Circle Kishtwar, raising a demand of ₹15,44,922 for FY 2020–21.
- A show cause notice (SCN) dated 25.11.2024 was issued under Section 73(1), requiring a response by 30.12.2024.
- The petitioner submitted a reply on 20.01.2025—after the deadline but before the order was passed. The STO, however, ignored the reply and passed the final order, treating it as a non-response.
- The petitioner contended that non-consideration of the reply violated principles of natural justice.
Issue:
- Whether a reply submitted after the period specified in the SCN but before the passing of a final order under Section 73(9) must be considered by the proper officer?
Order:
- The Court held that the GST Act does not prescribe a statutory deadline for filing replies to SCNs under Section 73(1).
- While the officer may fix a reasonable time, if the reply is received before the order under Section 73(9) is passed, it is incumbent upon the officer to consider it in the interest of justice, equity, and fair play.
- Failure to do so renders the order violative of natural justice.
- The Court set aside the impugned order dated 26.02.2025 and directed the STO to pass a fresh, reasoned order after considering the reply dated 20.01.2025 and granting an opportunity of hearing.
- Any tax already recovered shall remain subject to the outcome of the fresh order.
