GST demand challenge over alleged missing pre-show cause notice secured conditional interim stay pending writ hearing.

A GST demand challenged on the ground that proceedings under Section 73 were initiated without the prescribed pre-show cause notice raised an issue going to the validity of the demand. The petition also relied on the absence of an effective appellate remedy where a tribunal was not constituted and on a partial tax deposit already made. The High Court found the matter required consideration and granted interim protection by staying the operation of the assessment and appellate orders, subject to further deposit of 10% of the tax liability within the stipulated time, while the writ petition remained pending for counter affidavit and final hearing.

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Issues: Whether the challenge to the GST demand based on alleged non-issuance of the pre-show cause notice under the prescribed procedure warranted interim protection under Article 226; and whether operation of the assessment and appellate orders should be stayed pending consideration of the writ petition.

Analysis: The petition raised a contention that proceedings under Section 73 of the GST enactment were initiated without the mandatory pre-show cause notice contemplated by the relevant rules, and that the defect went to the root of the demand. The petition also asserted absence of an effective alternative remedy in the absence of a constituted tribunal and placed reliance on partial deposit already made towards the tax liability. The Court found that the matter required consideration and granted interim protection, subject to further deposit of tax.

Outcome: Interim stay was granted against the operation of the assessment and appellate orders, conditional upon further deposit of 10% of the tax liability within the stipulated time, and the writ petition was kept pending for counter affidavit and further hearing.

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