The Supreme Court has quashed a GST demand order exceeding ₹8.9 crore directed at a company, determining that there was insufficient evidence to demonstrate proper service of the show cause notice. The Court’s ruling emphasised that this deficiency constituted a breach of the principles of natural justice.
The bench of Justice Aravind Kumar and Justice Prasanna B. Varale specified that although the adjudication order cited that the notice had been served, there was no material available to substantiate such service. The Court ruled that the lack of evidence of service directed to a breach of natural justice and warranted interference.
The case is concerned with the proceedings initiated against a private company engaged in manufacturing and selling Ayurvedic health supplements. The company had entered into a logistics support agreement with a clearing and freight agent for warehouse operations in Gurugram.
The company, after the agreement ended in July 2022, shifted its business operations and warehouse from Haryana to Delhi and claimed that the agent’s control over the Gurugram premises ceased afterwards.
An SCN in May 2024 has been issued by the tax authorities asking for the reversal of Input Tax Credit (ITC) and demanding Rs 8.90 crore. Thereafter, the demand was confirmed via an order-in-original passed in August 2024.
The SCN has been contested by the company and the order before the Punjab and Haryana High Court, mainly on the basis that the notice had been provided and that the order was passed ex parte in breach of natural justice.
But, the HC dismissed the petition, marking that an alternative regulatory remedy was present and marking that no particular appeal for the non-uploading of the notice on the GST portal was made.
Meanwhile, the Court denied the claim of the taxpayer that the SCN itself was vague or issued without application of mind, citing that the same claim does not have merit.
The Supreme Court, permitting the appeal in part, set aside the demand order and allowed the company to submit a response to the SCN. The assessing officer was asked to reconsider the case and pass a fresh order post-adjudication.
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Also, the Court said that the taxpayer could not again contest the show cause notice (SCN) based on the vagueness or lack of material particulars. Problems of jurisdiction may still be raised in the response and analysed by the assessing authority.
| Case Title | Srideva Sattva Private Limited vs. State of Haryana & Ors |
| Case No. | No.33078 of 2025 |
| For Petitioner | Mr. Amit Deshpande, Mr. Suresh V., Ms Urvashi Tyagi, Ms Preeti Gupta |
| For Respondent | Mr Alok Sangwan, Mr Samar Vijay Singh, Mr Harsh Mehta |
| P&H High Court | Read Order |
