TaxTMI 
TaxTMI 
2026 (7) TMI 751
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....i) That the impugned show cause notice was issued on 18.10.2025 i.e., less than six months period contemplated under Section 74(2) of the Act; ii) it was also issued after the 30 days period fixed by this court in W.P.Nos.25079, 25081, 25084, 25211, 25920 and 25997 of 2024, dated 03.03.2025, concerning different assessment years, including the present one; iii) the petitioner has also assailed the order-in-original passed on 28.03.2026 on merits as being bad in law; iv) the petitioner has also taken a plea that the proper officer has summarily rejected the preliminary issue on limitation made during the personal hearing on 23.03.2026; v) the impugned order does not rely on Section 75(1) of the Act and the benefit of the said provision will also not apply in the present case, as no stay of proceedings was granted; vi) the limitation under a taxing statute goes to the root of jurisdiction and cannot be circumvented by a purposive or equitable reading of the order dated 03.03.2025; vii) the impugned order is, therefore, in violation of principles of natural justice as it was passed without giving due opportunity to furnish the repl....
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....usal of the order dated 13.05.2026 would clearly show that the impugned order-in-original dated 28.03.2026 relatable to assessment year 2019-20 was also brought to the notice of the Apex Court in which background the Apex Court observed at paragraph 9 that the petitioner is now left with no other option but to prefer statutory appeal under Section 107 of the Act. The Apex Court, however, in the peculiar facts and circumstances of the case, while relegating the petitioner to prefer the statutory appeal with respect to each of the assessment years before the appellate authority, allowed pre-deposit of 5% of the total principal tax amount. The Apex Court also allowed the petitioner to raise the contentions before the appellate authority with respect to 14 files being lost by the department, on grounds of serious prejudice raised by them. The appellate authority was asked to look into all relevant aspects of the matter and take appropriate decision in that regard without being influenced in any manner by any of the observations made by the High Court in the order impugned before the Apex Court. It is submitted that the modification order dated 29.05.2026 was passed on Miscellaneous App....
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....impugned in the present writ petition. 7. Suffice it to say that the present proceedings have a chequered history. W.P.No.25079 of 2024 and analogous cases were the first round of litigation at the behest of the petitioner who came against the impugned order-in-original passed in respect of the tax periods, including the present tax period. The Coordinate Bench of this court on a consensus arrived at between the parties set aside the show cause notices and orders-in-original and granted liberty to the department to issue fresh show cause notices by providing all relevant documents to the petitioner and pass orders in accordance with law. The learned court had disposed of the matters without expressing any opinion on the merits of the case. It had also made an observation that if the show cause notices are issued within thirty days from the date of the said order, the same shall not be held to be barred by limitation. Be it pointed out here that the show cause notices related to the periods 2018-19 onwards till 2023-24. Another round of litigation was pursued on the question of non-supply of missing documents in W.P.No.35740 of 2025, which was disposed of on 12.12.2025. The extra....
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.... The adjudication proceedings could go on the basis of the other available materials with the department, of course, with due opportunity to the petitioner to furnish its reply and compliance of the opportunity of hearing in terms of the relevant provisions of the Act. This order was assailed before the Apex Court in SLP (Civil) No.12390 of 2026. It is apposite to quote the order dated 13.05.2026 rendered therein by the Apex Court in extenso hereunder: "1. We heard Mr. Balbir Singh, the learned senior counsel appearing for the petitioner(s) and Mr. N. Venkataraman, the learned A.S.G appearing for the respondent(s) along with the officers of the Department, namely, Ms. Kranthi Boda, Asst. Commissioner, Ms. Deepa Reddy, Addl. Commissioner, Ms. Vasavi Jagannath, Addl. Commissioner and Mr. T.V. Prasad, Deputy State Tax Officer. 2. This petition arises from the order passed by the High Court for the State of Telangana dated 11.03.2026 in Writ Petition No.6668/2026 by which the Writ Petition preferred by the petitioner herein came to be disposed of. 3. The petitioner prayed for the following before the High Court:- "It is therefore prayed that this Hon....
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....nd in the absence of copies of those documents, it was difficult for him to establish that the allegations levelled by the Department of fraudulent transactions or bogus invoices were baseless. 6. It appears that for the Assessment Year 2018-2019, the final assessment order came to be passed on 30.12.2025. This order was made a subject matter of challenge by way of Writ Petition No.8587/2026 before the High Court. This petition was disposed of, relegating the petitioner to avail appropriate alternate remedy. 7. Insofar as the Assessment Year 2019-2020 is concerned, the final assessment order came to be passed on 28.03.2026 and for the remaining Assessment Years, the order came to be passed on 22.04.2026. In short, the position today is that final orders of assessment have been passed by the competent authority with respect to the liability of the petitioner as alleged. We only need to consider whether the petitioner could be said to be seriously prejudiced in the course of assessment proceedings in the absence of the 14 files which have gone missing. 8. As noted aforesaid, the case of the petitioner is that if he would have been in possession of the 14 fi....
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.... preferring statutory appeals with respect to each of the assessment orders before the appellate authority after a pre-deposit of 5% of the total principal tax amount within a period of four weeks. The petitioner was allowed to raise all the contentions before the appellate authority in accordance with law, including the question of prejudice caused with respect to 14 files being lost by the department. It was also observed that the appellate authority would not be influenced in any manner by any of the observations made by the High Court in the order impugned therein. Thereafter, the petitioner moved Miscellaneous Application Nos.1784 and 1784 of 2026 seeking modification of the order dated 13.05.2026 on which the Apex Court passed an order on 29.05.2026 with certain modifications. The order dated 29.05.2026 is extracted hereunder: "By these Applications, the applicant (the original petitioner) has prayed for the following:- Miscellaneous Application No.1784/2026:- (i) Allow the present Application and modify the Order dated 13.05.2026 qua the condition of pre-deposit of 5% and/or permitting the Petitioner to file statutory appeals without pre-deposit ag....
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....h show cause notices while observing that if they were issued within thirty days from the date of the said order, the same shall not be held to be barred by limitation. Be it also indicated here that the proceedings under challenge in W.P.No.25079 of 2024 and batch were for the periods starting from 2018-19 till 2023-24 in respect of which the Coordinate Bench of this court was inclined to make such observation. After issuance of the show cause notice, the question of missing files was raised in W.P.No.35740 of 2025, which was disposed of by this court on 12.12.2025 in the manner extracted hereunder: "3. On an earlier date, when the matter was taken up, learned Special Government Pleader for State Tax was allowed time to obtain instructions on the question of scanned copies of certain documents, which were seized during investigation and which form part of inventory or Panchnama apart from other files, which have already been handed over. The Panchnama, on which both the parties rely, is at page Nos.115 and 116 of the Writ Petition. Relevant portion of the Panchnama is extracted hereunder: BCR OFFICE TO GET OFFICE ANNUXER OF FILES BOX FILES PARTICULARS BILL/....
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....arlier as per its own case also. Its grievance was in relation to the office files from Serial Nos.1 to 11 except Serial Nos.2, 8 and 9. Petitioner also sought copies of the documents enumerated at internal page No.3 of page No.116 of the Writ Petition, which is extracted hereinabove. 5. Yesterday, when the matter was taken up, learned Special Government Pleader for State Tax submitted that the State Tax Department is ready with the photocopies and pen drive containing digital copies of the documents enumerated at page 115 of the Writ Petition under Office Files Serial Nos.1 to 11 leaving aside Serial Nos.2, 8 and 9, which the petitioner has already got, and 6 documents enumerated at page No.116 of the Writ Petition. He sought time to bring them on record with copies thereof through affidavit. It was also submitted that since the last date of passing of the order in respect of assessment year 2018-19 is 31.12.2025, the petitioner, having filed its reply in respect of the show cause notice for the said assessment year, may be directed to submit a supplementary reply-affidavit within a timeframe upon perusal of documents being supplied to it so that the State Tax Department ....
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....4.07.2025 AC(CT), Basheerbagh-Nampally-1 Circle, issued notice clarifying the query raised by the Tax Payer raised after receiving record on 04.07.2025. 5 15.07.2025 AC(CT), Basheerbagh-Nampally-1 Circle, issued Notice clarifying the query raised by the Tax Payer regarding releasing the Scripted Loose Slips page nos. 6 23.07.2025 AC(CT), BBNP-1 Circle issued Notice for filing their reply as they were issued all the copies of the relevant record along with the copies of Scripted Loose Slips. 7 22.08.2025 AC(CT), Basheerbagh-Nampally-1 Circle, issued Notice cum Personal Hearing to be heard on 25.08.2025. 8 29.08.2025 AC(CT), Basheerbagh-Nampally-1 Circle, issued Notice on 29.08.2025 for releasing record. 9 18.10.2025 AC(CT)-Basheerbagh-Nampally-1 Circle, issued notice in Form GST DRC-01 vide ARN AD 360325057778L, in Ref. No.ZD361025022584N on 18.10.2025. 10 20.11.2025 AC(CT), Basheerbagh-Nampally-1 Circle, issued Notice-Reminder cum Personal Hearing issued on 20.11.2025 for all the years - requesting the Tax Payer to file written objections against the notices issued from 2018-19 to 2023-24 (up to Dec'23). 11 28.11.2025 ....
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....granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. (5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing: Provided that no such adjournment shall be granted for more than three times to a person during the proceedings. xxx" 16. A combined reading of the relevant provisions hereinabove would indicate that the requirement of issuing show cause notices as per Section 74(2) of the Act before a period of six months from the date of passing of the order-in-original does not appear to be mandatory in nature, as no consequences thereof are provided in the said provision. Mere use of the word "shall" in such a situation will not render it mandatory. Even otherwise, such provision has to be tested on whether the assessee has suffered any prejudice. 17. In the facts and circumstances of the case, it appears that the petitioner was allowed several opportunities after issuance of the show cause notice on 18.10.2025 to furnish its....