J&K HC sets aside S. 63 GST Assessment Passed against Registered Entity Treated as Unregistered [Read Order]

The Jammu & Kashmir and Ladakh High Court has set aside a GST ( Goods and Services Tax ) assessment order passed under Section 63 of the GST Act against a registered taxpayer after finding that the department wrongly treated the entity as unregistered and proceeded without proper opportunity of hearing.

Assessment proceedings were initiated against M/s DRF Infra Builders Pvt. Ltd. under Section 63 (best judgment assessment for unregistered persons), despite the show cause notice itself reflecting a valid GSTIN of the petitioner.

The petitioner challenged the show cause notice dated 30.09.2023 and the assessment order dated 22.12.2023 passed by the State Taxes Officer.

It was contended that the order was issued against a temporary ID instead of its actual GSTIN and on the incorrect premise that it was an unregistered entity.

It was further submitted that the petitioner became aware of the assessment only when its bank accounts were frozen in July - August 2025.

When it attempted to file an appeal under Section 107 of the GST Act, the GST portal did not accept the appeal, and the manual appeal filed before the appellate authority was dismissed as time-barred.

The petitioner also argued that no proper opportunity of hearing was granted before passing the assessment order and expressed readiness to deposit 10% of the disputed tax demand to show bona fides.

Justice Arun Palli (Chief Justice) and Justice Rjnesh Oswal quashed both the original assessment order dated 22.12.2023 and the appellate order dated 15.10.2025 that had rejected the appeal on limitation.

The Court granted the petitioner fifteen days’ time to file a response to the show cause notice and directed the proper officer to pass a fresh speaking order after granting due opportunity of hearing.

The petitioner was directed to deposit 10% of the tax demand in the meantime.

The Court clarified that the order was passed in view of the special facts and the consent of parties and should not be treated as a binding precedent.

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