GST Assessment Order Quashed for Ignoring Assessee’s Reply to Show Cause Notice

Court: Gauhati High Court
Case Title: M/s Assam Auto Spares vs. State of Assam & Ors.
Petition No.: WP(C)/1918/2024
Date of Judgement: 05.06.2025
Relevant Sections: Section 73 of CGST Act, 2017
Category of Dispute: Assessment / Violation of Natural Justice

🧾 Facts of the Case (Ref: Para 2, 3, 6, 8)

• The petitioner, M/s Assam Auto Spares, received a show cause notice dated 30.09.2023 from the Deputy Commissioner of State Taxes.

• The petitioner submitted an online reply on 20.12.2023 (ARN ZD18 1223033093T).

• Despite this, the department passed an order dated 29.12.2023 confirming tax liability and alleging that no reply was submitted, followed by an attachment order the same day.

• The writ petition challenged the assessment on the ground that the order erroneously recorded non-submission of reply.

❓ Question(s) in Consideration (Ref: Para 3, 7)

• Whether the impugned order dated 29.12.2023 violated the principles of natural justice by ignoring the reply submitted by the petitioner?

• Can the department justify its decision through an affidavit contrary to the reasoning given in the original order?

👀 Observation of Court (Ref: Para 6, 7, 8)

• The impugned order explicitly stated that no reply was filed, thereby treating the petitioner’s silence as deemed acceptance.

• However, the department in its affidavit admitted that the reply was received and considered but found unsatisfactory.

• The Court held that these contradictory stands cannot coexist and that the affidavit cannot cure a defect in the reasoning recorded in the impugned order.

⚖️ Judgement of the Court (Ref: Para 9, 10)

• The Gauhati High Court quashed the impugned assessment and attachment orders dated 29.12.2023.

• The case was remanded to the proper authority (Respondent No. 3) for fresh decision-making, strictly based on the reply submitted and in accordance with the prescribed procedure under the Act.

• No costs were awarded.

📘 Between Fine Lines:

• A GST order passed without considering a reply is legally unsustainable.

• Contradictory post-facto justifications in affidavits won’t cure violation of natural justice.

• Department must ensure actual consideration of replies submitted by assessees.

• Courts will not permit arbitrary finalisation of tax assessments.

• The case reiterates the fundamental rule: Reasoning in the order must match the authority’s actual application of mind.

📚 Summary of Referred Cases:

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