Gauhati HC Interferes with GST Recovery Notice, Orders Fresh SCN to Uphold Fair Hearing [Read Order]

In a recent ruling, the Gauhati High Court has intervened in a GST dispute that set aside a recovery notice and directed the tax department to issue a fresh show cause notice, and it was held that the company had not been given a fair opportunity to respond before recovery proceedings were initiated.

The petitioner, R S Cooling Appliances, challenged a recovery notice dated 03 January 2026, arguing that no prior intimation or show cause notice had been served. They also sought to set aside an earlier adjudication order dated 05 April 2022.

The counsel, R S Mishra, M Dey, B Sarma, appearing for petitioner said that the recovery notice was the first time the company became aware of any proceedings.

In response, the revenue counsel, Keyal, submitted that the final order had been dispatched by registered post but could not confirm whether it was actually served.

After hearing both sides, Justice Sanjay Kumar Medhi observed that “interest of justice would be served if the proceeding is directed to be done afresh, whereby the petitioner would get an opportunity to submit his show cause reply.”

The court observed that the petitioner had not been given any prior intimation or opportunity to respond before the recovery notice was issued, and that mere dispatch of the order by registered post without proof of service could not satisfy the requirement of fair hearing.

It was also held that, in the interest of justice, the recovery proceedings must be initiated afresh with a proper show cause notice, allowing the petitioner to file a reply and be heard, while clarifying that this interference was limited to the denial of opportunity and would not prejudice the merits of the taxdispute.

Accordingly, the writ petition was disposed of

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