SCN Issued u/s 74 of GST Act Despite Return Filed: Patna HC sets aside Orders [Read Order]
The Court noted that the petitioner had indeed filed the return prior to the issuance of SCN, and that the entire proceeding was triggered only due to non-communication in the prescribed form.
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The Patna High Court has set aside the assessment and appellate orders passed against a contractor who was issued a show cause notice ( SCN ) under Section 74 of the GST ( Goods and Services Tax ) Act, 2017, despite having filed his GST returns and paid taxes. The petitioner, Parvinder Singh had sought quashing of the assessment order dated 15.01.2021, the appellate order...
The Patna High Court has set aside the assessment and appellate orders passed against a contractor who was issued a show cause notice ( SCN ) under Section 74 of the GST ( Goods and Services Tax ) Act, 2017, despite having filed his GST returns and paid taxes.
The petitioner, Parvinder Singh had sought quashing of the assessment order dated 15.01.2021, the appellate order dated 25.03.2025, and the consequent demand raised via DRC-07, while also requesting protection from coercive recovery measures.
It was argued by the counsel of the petitioner that he had been regularly filing returns, including for March 2020, where CGST and SGST were duly deducted as tax at source on supplies worth ₹10,25,422 made to the Local Area Engineering Organisation, Katihar.
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Although the return was filed on 07.12.2020, the respondent authority issued an SCN on 10.12.2020 under Section 74 treating the petitioner as a defaulter. The SCN was uploaded only under the “Additional Notices” tab on the GST portal without proper service through email or SMS. Consequently, no reply was filed, and tax, interest, and penalty were imposed under Section 74(9), resulting in demand order DRC-07.
The petitioner contended that the authorities failed to verify from the GST portal that the return and tax payment had already been made. Moreover, the petitioner’s business was formally closed on 30.09.2021, with the GST department itself certifying that no tax dues were outstanding.
However, the State counsel (SC-11) argued that although the return was filed belatedly, the petitioner failed to intimate the adjudicating authority through Form DRC-01B as required under the law.
It was further submitted that no interest was paid on delayed payment, justifying the issuance of SCN under Section 74. Also, the counter affidavit admitted that if the petitioner had filed intimation in Form DRC-01B, no further proceedings under Sections 73 or 74 would have been initiated.
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The Court noted that the petitioner had indeed filed the return on 07.12.2020, prior to the issuance of SCN, and that the entire proceeding was triggered only due to non-communication in the prescribed form.
The Bench concluded that the facts of the case did not justify the initiation of proceedings under Section 74, based on the admission in the State's counter-affidavit.
Accordingly, the Patna High Court set aside the assessment order dated 15.01.2021, the appellate order dated 25.03.2025, and the consequential demand. The writ petition was allowed, granting relief to the petitioner against coercive recovery.
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