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Case Details: Sanmati Metals vs. State of Himachal Pradesh - [2025] 172 taxmann.com 24 (Himachal Pradesh)

Judiciary and Counsel Details

M.S. Ramachandra Rao, CJ. & Jyotsna Rewal Dua, J.
J.S. Bedi, Goverdhan Sharma, Advs. for the petitioner.
Rakesh Dhaulta, Additional Advocate General, Ms Priyanka Chauhan, Arsh Rattan & Sidharth Jalta, Deputy Advocate Generals, for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer, was issued a show-cause notice (SCN) in Form GST DRC-01 under Section 73(1) of the CGST Act, 2017, alleging discrepancies in tax filings. However, prior to issuing the SCN, the department failed to serve Form GST ASMT-10, as required under Rule 99 of the CGST Rules, 2017, which mandates notifying the assessee of any discrepancies and granting an opportunity for clarification. Aggrieved by this procedural lapse, the petitioner filed a writ petition before the High Court of Himachal Pradesh, challenging the validity of the SCN. The petitioner contended that compliance with Rule 99 is a mandatory procedural prerequisite, and the absence of Form GST ASMT-10 rendered the proceedings legally unsustainable. The petitioner further argued that the issuance of an SCN without prior notice violates principles of natural justice, as it deprives the assessee of an opportunity to explain or rectify the discrepancies before coercive proceedings are initiated.

High Court Held

The Hon’ble High Court of Himachal Pradesh held that the issuance of Form GST ASMT-10 under Rule 99 of the CGST Rules, 2017, is a mandatory procedural requirement before issuing a show-cause notice in Form GST DRC-01 under Section 73(1) of the CGST Act, 2017. The Court observed that non-compliance with this statutory mandate constitutes a procedural infirmity, rendering the subsequent proceedings untenable. Accordingly, the Court granted an interim stay on all further proceedings arising from the impugned SCN.