Foundational show-cause notice quashed for natural justice breach, and consequential GST demand order fell with it.

Where a show-cause notice is quashed for breach of natural justice, all consequential demand and recovery actions based on that notice fail with it, and a review will not lie unless an error apparent on the face of the record is shown. The Court found no patent error in the earlier judgment, which had proceeded on the basis that the taxpayer was not heard and the proceedings were founded on a notice issued to a dead person. The consequential demand order under Section 74 of the J&K GST/CGST Act, 2017 was therefore treated as quashed, and the earlier relief in favour of the taxpayer remained undisturbed.

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Issues: (i) Whether the review petition disclosed any error of law or fact apparent on the face of the record in the earlier judgment quashing the show-cause notice and recovery notice; (ii) whether quashment of the show-cause notice automatically vitiated the consequential demand order passed under Section 74 of the J&K GST/CGST Act, 2017.

Issue (i): Whether the review petition disclosed any error of law or fact apparent on the face of the record in the earlier judgment quashing the show-cause notice and recovery notice.

Analysis: Review lies only where a patent error apparent on the face of the record is shown. The earlier judgment had proceeded on the basis that the demand had been confirmed without hearing the taxpayer and that the proceedings were founded on a notice issued to a dead person. The Court found no apparent error in that conclusion, and the review applicants failed to establish any ground warranting interference with the earlier decision.

Conclusion: The review petition failed on this issue and no interference with the earlier judgment was warranted.

Issue (ii): Whether quashment of the show-cause notice automatically vitiated the consequential demand order passed under Section 74 of the J&K GST/CGST Act, 2017.

Analysis: The demand order was the culmination of the show-cause proceedings. Once the foundational show-cause notice was quashed, every subsequent step resting on that notice, including the demand confirmation, stood infected. The Court clarified that the demand order did not survive independently and was deemed to have been quashed as a consequential outcome of setting aside the notice and the recovery action.

Conclusion: The consequential demand order stood vitiated and treated as quashed.

Final Conclusion: The review petition was devoid of merit, and the earlier relief in favour of the taxpayer remained undisturbed, while the revenue authorities were left at liberty to proceed afresh in accordance with law and after complying with natural justice.

Ratio Decidendi: Where the foundational show-cause notice is set aside for breach of natural justice, all consequential demand and recovery ures based on that notice fail with it, and review will not lie in the absence of an error apparent on the face of the record.

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