The HC held that a writ petition challenging GST demand proceedings is not maintainable when an effective statutory appellate remedy exists and no exceptional ground of natural justice or lack of jurisdiction is established.
Saloni Kumari | May 22, 2026 |
GST Audit completion does not bar authorities to initiate fresh proceedings under Section 73 or 74
The High Court of Jammu & Kashmir and Ladakh dismissed a writ petition filed by M/s Ess Ess Enterprises and Electronics, holding it was granted sufficient time to respond to the show cause notice and also it had an effective alternative remedy of appeal under Section 107 of the CGST Act.
The petitioner (M/s Ess Ess Enterprises and Electronics) is engaged in the business of providing services in the nature of works contracts, etc., possessing GSTIN No. 01ANXPN8615J2ZH.
The petitioner had challenged a show cause notice dated February 06, 2026, a reminder dated March 11, 2026, and a demand order dated April 09, 2026, issued by the State Taxes Officer (STO), Circle-1 Kashmir, through which a tax liability of about Rs 3.41 crore was imposed on it under Section 73 of the Jummu and Kashmir Goods and Services Tax (GST) Act.
The petitioner argued that it was not granted a fair opportunity of hearing before the issuance of the impugned order. Further claimed that the proprietor was out of station when the first hearing was fixed and subsequently could not attend the second hearing because the date coincided with Eid al-Fitr, a public holiday.
Also argued that once GST audit proceedings had already been completed under Section 65 of the CGST Act, the tax authorities cannot initiate fresh proceedings under Section 73 of the act. When the court analysed the entire case, it noted that the petitioner had an effective alternative remedy of appeal under Section 107 of the CGST Act and was given a sufficient time limit to furnish a reply from February 06, 2026, to March 21, 2026, but still did not do so. Consequently, the present writ petition cannot be entertained.
The Court further clarified that Section 65(7) of the CGST Act specifically allows the proper officer to initiate proceedings under Sections 73 or 74 if an audit reveals unpaid or short-paid tax. Therefore, the STO had the jurisdiction to proceed against the petitioner. Accordingly, the petition was dismissed with liberty to the petitioner to file an appeal before the appellate authority.
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