Uttarakhand HC Criticizes GST Dept. for Arbitrary Action Against Businesses Prior to Issuance of SCN [Read Order]
The court ruled that an interim order would be granted as requested and that any action would need to be properly compliant with the GST Act's rules
![Uttarakhand HC Criticizes GST Dept. for Arbitrary Action Against Businesses Prior to Issuance of SCN [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Uttarakhand-High-Court-GST-department-Input-Tax-Credit-taxscan.jpg "Uttarakhand HC Criticizes GST Dept. for Arbitrary Action Against Businesses Prior to Issuance of SCN [Read Order]")
The Uttarakhand High Court has criticized the Goods and Service Tax (GST) department for arbitrary action against businesses by blocking Input Tax Credit (ITC) before the issuance of show cause notice (SCN). Read More: Supreme Court Ends 50-Year Dispute on CA Firm’s Undervaluation of Shares: Grants 6% Simple Interest from 1975 and 9% Interest Post-Decree Kotdwar Steel Limited...
The Uttarakhand High Court has criticized the Goods and Service Tax (GST) department for arbitrary action against businesses by blocking Input Tax Credit (ITC) before the issuance of show cause notice (SCN).
Kotdwar Steel Limited ,the petitioner, filed the petition for passing an interim order against the action of the GST department. The division bench of Chief Justice G. Narendar and Justice Alok Mahra has held that the working of the Department is startling and shocking. It is not known and incomprehensible as to which provision of law permits the Department to take deterrent and coercive action, even prior to issuance of pre-intimation notice.
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The bench proceeded to assert that the behavior in question is comparable to punishing someone and then holding a trial. The Department's behavior is appalling. We believe that the goal of the GST Act is not to shut down companies or drive them out of business. To ensure tax compliance, the GST regime was implemented; it was not intended to cause livelihood losses.
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The court held that “We hope that the Department will bear this in mind. The growth of businesses and sustenance of businesses is vital for employment generation and growth of the Nation. If the Department can bear this in mind and act in consonance with the stated objectives of the Act, it would be rendering yeomen service to the business community. Such actions reflect a mind set, which we do not wish to name here”.
When the matter was listed on April 29, 2025, the court ruled that an interim order would be granted as requested and that any action would need to be properly compliant with the GST Act's rules.
To Read the full text of the Order CLICK HERE
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