Bombay HC Mandates 3-Month Gap Between Notice and Order
We wish to bring to your attention a significant judgment pronounced by the Bombay High Court on January 17, 2026, which reinforces taxpayer rights regarding adjudication timelines under the CGST Act.
Key Takeaway The High Court has ruled that a minimum gap of three months is mandatory between the issuance of a Show Cause Notice (SCN) under Section 73(2) and the passing of the final order under Section 73(10).
Case Details
- Case Name: A. M. Marketplaces Pvt. Ltd vs The Union of India & ors
- Court: High Court of Bombay
- Date of Order: January 17, 2026
The Dispute In this case, the Revenue department issued a notice on November 18, 2024, and passed the final order on January 31, 2025. The time gap between the notice and the order was approximately 2 months and 13 days.
The Revenue argued that the “three-month” period mentioned in Section 73(2) only applies to the outer deadline for issuance (i.e., the notice must be issued at least 3 months before the 3-year limitation expires).
The Court’s Ruling & Rationale The Bombay High Court rejected the Revenue’s argument and quashed the order, holding it unsustainable. The Court emphasized that the 3-month gap is mandatory for the following reasons:
- Meaningful Opportunity: The gap is necessary to perform multiple activities, including following the principles of natural justice and providing an opportunity for tax payment.
- Right to Adjournments: Taxpayers are statutorily entitled to up to three adjournments during personal hearings. If the adjudication timeline is compressed to less than three months, this protection becomes ineffective (otiose).
- Statutory Intent: Shortening this time defeats the purpose of provisions that allow a taxpayer to pay tax and self-assess after receiving a statement of demand.