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Foodlink F&B Holdings vs Union of India - Tax Assessment Challenge

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Filed March 4th, 2026
Detected March 29th, 2026
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Summary

The Bombay High Court has issued a rule in the case of Foodlink F&B Holdings India Limited vs. Union of India. The petition challenges an 'Intimation of tax ascertained as being payable' under Section 74(5) of the CGST Act, issued on February 17, 2026.

What changed

The Bombay High Court has issued a rule in response to a writ petition filed by Foodlink F&B Holdings India Limited challenging a tax assessment notice. The petitioner seeks to quash and set aside an 'Intimation of tax ascertained as being payable' under Section 74(5) of the CGST Act, which was issued on February 17, 2026. The court has made the rule returnable forthwith and heard the matter by consent.

This action indicates a potential dispute over the legality or validity of the tax assessment process under the CGST Act. Companies facing similar tax intimations may need to review their own assessments and consider legal recourse. The specific implications for Foodlink F&B Holdings will depend on the court's final decision, but the immediate requirement is for the respondents (Union of India & Ors.) to respond to the rule issued by the court.

What to do next

  1. Review tax assessment notices received under Section 74(5) of the CGST Act.
  2. Consult with legal counsel regarding the validity of tax intimations.
  3. Prepare to respond to any legal challenges or inquiries related to tax assessments.

Source document (simplified)

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Foodlink F And B Holdings India Limited vs The Union Of India And Ors on 4 March, 2026

Author: G. S. Kulkarni

Bench: G. S. Kulkarni

2026:BHC-AS:14886-DB WP(L) 5576 OF 2026(1).DOC

                                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY

LAXMI
SUBHASH
SONTAKKE
CIVIL APPELLATE JURISDICTION
Digitally signed
by LAXMI
SUBHASH
SONTAKKE WRIT PETITION (L) NO. 5576 OF 2026
Date: 2026.03.27
19:11:20 +0530

                Foodlink F & B Holdings (India)                                          Petitioner
                      Versus
                Union of India & Ors.                                                    Respondents

                                                 _______
                Mr. Vikram Nankani, Senior Advocate a/w Mihir Mehta & Vikas Poojary i/b. PDS
                Legal for Petitioner.
                Mr. Karan Adik a/w Megha Bajoria, Chirag Sawant & Sangeeta Yadav for the
                Respondent.
                                                               _______

                                                       CORAM:       G. S. KULKARNI &
                                                                    AARTI SATHE, JJ.

                                                       DATE:        04th March 2026
                P.C.

                1.               Not on board. Taken on board. Rule. Rule made returnable forthwith.

                By consent taken up for hearing.

                2.               This petition under [Article 226](https://indiankanoon.org/doc/1712542/) of the Constitution of India is filed

                praying for the following substantive reliefs, which read thus: -

                              "(a) this Hon'ble Court be pleased to issue a Writ of Certiorari or a
                              writ in the nature of Certiorari or any other writ, order or direction
                              under [Article 226](https://indiankanoon.org/doc/1712542/) of the Constitution of India calling for the
                              records pertaining to the Petitioner's case and after going into the
                              validity and legality thereof to quash and set aside the impugned
                              cryptic Intimation of tax ascertained as being payable under [Section
                              74(5)](https://indiankanoon.org/doc/171417207/) of the CGST Act in Form GST DRC 01A dated 17.02.2026
                              (DIN 20260267VW000000B79A) (Exhibit A);

                              (b) this Hon'ble Court be pleased to issue writ of Prohibition or
                              any other appropriate writ in the nature of Prohibition ordering
                              and directing the Respondents, their successors, subordinates or

                                                           Page 1 of 13
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          servants and agents not to take any steps or proceedings in
          furtherance of or in pursuance of the impugned Intimation of tax
          ascertained as being payable under [Section 74(5)](https://indiankanoon.org/doc/171417207/) of the CGST Act
          in Form GST DRC 01A dated 17.02.2026 (DIN
          20260267VW000000B79A) pending further verification by the
          Learned Chartered Accountant Mr. Sagar Shah appointed by the
          Respondents in pursuance of and in compliance of Order dated
          14.03.2024 passed by this Hon'ble Court and without considering
          and applying the findings of verification report dated 26.04.2024
          submitted by the said Chartered Accountant and further report to
          be submitted of further verification by him;

          (c) In the alternative to prayers (a) and (b) above, this Hon'ble
          Court be pleased to issue writ of Mandamus or any other
          appropriate writ in the nature of Mandamus ordering and directing
          the Respondents, their successors, subordinates or servants and
          agents to forthwith provide documents, calculations and basis on
          which the Respondent no. 3 has ascertained the tax payable by the
          Petitioner pursuant to the impugned cryptic Intimation of tax
          ascertained as being payable under [Section 74(5)](https://indiankanoon.org/doc/171417207/) of the CGST Act
          in     Form      GST       DRC      01A      dated     17.02.2026
          (DIN20260267VW000000B79A) (Exhibit A);

          (d)pending the hearing and final disposal of the above Petition, this
          Hon'ble Court be pleased to direct the Respondents, by themselves,
          their officers, subordinates, servants and agents by an interim order
          and injunction, to refrain from acting upon or taking any further
          steps or proceedings in pursuance of and/or in furtherance of the
          impugned Intimation of tax ascertained as being payable under [Section 74(5)](https://indiankanoon.org/doc/171417207/) of the CGST Act in Form GST DRC 01A dated
          17.02.2026 (DIN 20260267VW000000B79A);

          (e) for ad-interim relief in terms of prayers (c) above;

          (f) this Hon'ble Court be pleased to hear the present Writ Petition
          alongwith the Writ Petition no. 3406 of 2024 filed by the
          Petitioner and pending before this Hon'ble Court."
  1. We have passed substantial orders in similar facts on Writ Petition No.

3406 of 2024 and Interim Application No. 1695 of 2026, wherein the Writ

Petition has been disposed of as infructuous, and the Interim Application has been

dismissed. This Writ Petition is primarily a fallout of the proceedings which are the

subject-matter of challenge in Writ Petition No. 3406 of 2024 and the subject

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matter of challenge in the present petition is the intimation of tax ascertained

issued under Section 74(5) of the Central Goods and Services Tax Act, 2017

(hereinafter referred to as the " CGST Act ") read with Rule 142(1A) of the Central

Goods and Services Rules, 2017 (hereinafter referred to as the "CGST Rules") in

Form GST DRC-01A dated 17th February 2026 (hereinafter referred to as the

"impugned intimation").

  1. Briefly, the facts are as follows: -

i. The Petitioner is a company incorporated under the [Companies Act,

2013](https://indiankanoon.org/doc/172276913/), and is engaged in the business of providing catering services and operating

restaurants.

ii. On 08th August 2023, Respondent No. 2, i.e., the Commissioner of

CGST and Central Excise (AE), CGST & CEX, Navi Mumbai initiated an enquiry

against the Petitioner on receiving information that the Petitioner had availed

wrong/excess Input Tax Credit (ITC). It was further alleged in the enquiry that the

Petitioner did not pay Goods and Services Tax (GST) on the inter-bank transfers,

as the same form part of taxable supplies.

iii. The bank accounts of the Petitioner were provisionally attached vide

eight orders of the even date dated 27 th February 2024 (hereinafter referred to as

the "impugned attachment orders") issued in Form GST DRC - 22, and the banks

were directed that no debit must be allowed to be made by the Petitioner. The

Petitioners challenged the aforesaid impugned attachment orders by filing Writ

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Petition No. 3406 of 2024 in this Court. The prayers of Writ Petition No. 3406 of

2024 reads thus:-

            "(a) this Hon'ble Court be pleased to issue a Writ of Certiorari or a
            writ in the nature of Certiorari or any other writ, order or direction
            under [Article 226](https://indiankanoon.org/doc/1712542/) of the Constitution of India declaring [Section
            83](https://indiankanoon.org/doc/46671002/) of CGST Act, 2017 as it exists today, as ultra vires of [Articles
            14](https://indiankanoon.org/doc/367586/) [, 19](https://indiankanoon.org/doc/1218090/) and [21](https://indiankanoon.org/doc/1199182/) of the Constitution of India, for being wholly
            unreasonable, unguided, without any accountability for its misuse
            and manifestly arbitrary; or in the alternative, this Hon'ble Court
            may please read down the extent, scope and application of [Section
            83](https://indiankanoon.org/doc/46671002/) by explaining, guiding and delineating the same in a just
            manner with such cautions, pre-requisites and consequences for
            abuse thereof, so as to save it from unconstitutionality;

            (b) this Hon'ble Court be pleased to issue a Writ of Certiorari or a
            writ in the nature of Certiorari or any other writ, order or direction
            under [Article 226](https://indiankanoon.org/doc/1712542/) of the Constitution of India calling for the
            records pertaining to the Petitioner's case and after going into the
            validity and legality thereof to quash and set aside the eight
            impugned orders all dated 27.02.2024 passed by Respondent No.
            2 purporting to attach the bank accounts of the Petitioner under [Section 83](https://indiankanoon.org/doc/46671002/) of the Act (Exhibits Al to A8);

            (c) this Hon'ble Court be pleased to appoint Chartered Account or
            Costs Accountant to conduct a Special Audit in terms of [Section
            66](https://indiankanoon.org/doc/155556943/) of the CGST Act and examine and verify the correctness of the
            Reconciliation submitted with representations dated 25.10.2023,
            29.11.2023, 20.12.2023, 15.01.2024, 23.01.2024, and 15.02:2024
            of the Petitioner with their GST returns, Bank Statements, Books
            of Accounts, Electronic Credit Ledger and submit its report before
            this Hon'ble Court;

            (d) That this Hon'ble Court be pleased to direct the Respondent
            No. I to hold an inquiry into the conduct and role of the officials
            who were instrumental in continuing to act on an information
            found to be false, and instrumental in draconian attachment of
            bank account without even examining and verifying the
            correctness of the Reconciliation submitted with representations
            dated 25.10.2023, 29.11.2023, 20.12.2023, 15.01.2024,
            23.01.2024, and 15.02.2024 of the Petitioner in wholly arbitrary
            manner;

            (e)this Hon'ble Court be pleased to issue writ of Prohibition or any
            other appropriate writ in the nature of Prohibition ordering and
            directing the Respondents more particularly Respondent No. 2,
            not to debit any amount from the bank accounts which are under

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            attachment vide impugned orders dated 27.02.2024 passed by
            Respondent No. 2;

            (f) that pending the hearing and final disposal of the above
            Petition and subject to such terms and conditions as may deem just
            and expedient, this Hon'ble Court be pleased to stay the effect and
            operation of impugned orders dated 27-02-2024 passed by
            Respondent No. 2"

iv. During the pendency of Writ Petition No. 3406 of 2024, Respondent

No. 2 vide order dated 11 th March 2024 continued the provisional attachment of

the Petitioner's bank accounts in the interests of protecting Government Revenue.

v. The Petitioner therefore amended Writ Petition No. 3406 of 2024,

adding a prayer for quashing the order dated 11 th March 2024 passed by

Respondent No. 2 which reads thus:-

           "b1. this Hon'ble Court be pleased to issue a Writ of Certiorari or a
           writ in the nature of Certiorari or any other writ, order or direction
           under [Article 226](https://indiankanoon.org/doc/1712542/) of the Constitution of India calling for the
           records pertaining to the Petitioner's case and after going into the
           validity and legality thereof to quash and set aside the impugned
           order dated 11.03.2024 passed by Respondent No. 2 disposing off
           the representation made by the Petitioner under Rule 159 of the
           CGST Rules, 2017 and the continuing the provisional attachment
           of the 37 bank accounts of the Petitioner provisionally attached
           vide the impugned attachment orders dated 27.02.2024;"

vi. This Court by an order dated 14th March 2024 passed in Writ Petition

No. 3406 of 2024 directed Respondent No. 2 to appoint an independent

Chartered Accountant to verify the records of the Petitioner by way of special audit

under Section 66 of the CGST Act. Respondent No. 2 complying with the order

dated 14th March 2024 appointed Mr. Sagar Shah as the Chartered Accountant on

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18th March 2024 for assistance in the verification, whereby the Petitioner

participated in the investigation and submitted all relevant documents.

vii. The Chartered Accountant submitted his report on 24th March 2024

which subsequently was placed on record by Respondent Department before this

Court by way of an Additional Affidavit on 26th March 2024. The Petitioner also

filed their affidavit in rejoinder dated 27 th March 2024 in response to the

Additional Affidavit dated 26th March 2024 filed by the Deputy Commissioner.

viii. The Petitioner thereafter filed an Additional Affidavit dated 26th March

2024 placing on record the correspondence undertaken by them with the

Chartered Accountant during the course of verification undertaken in pursuance of

the directions of this Court.

ix. The Chartered Accountant was directed to undertake the exercise of

checking the credibility and authenticity of the inter-bank transactions of the

Petitioner along with filing report of the same vide order dated 28 th March 2024

passed by this Court in Writ Petition No. 3406 of 2024. The Chartered

Accountant filed his report on 26th April 2024.

x. The Petitioner placed on record the details of the events/proceedings

subsequent to passing of order dated 28 th March 2024 till submission of report by

the Chartered Accountant on 26th April 2024 by way of an Additional Affidavit

dated 29th April 2024.

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xi. The Petitioner thereafter filed Interim Application No. 1695 of 2026

before this Court in Writ Petition No. 3406 of 2024, seeking directions to the

Respondent Department to call for an additional report from the Chartered

Accountant qua the entries relating to the amount of Rs. 10.28 Crores, which could

not be triangulated by the Chartered Accountant in its initial report. This Court by

a separate order of even date has dismissed the aforesaid interim application and

disposed of Writ Petition No. 3406 of 2024 as infructuous as per reasons recorded

therein.

xii. During the pendency of Interim Application No. 1695 of 2026 in Writ

Petition No. 3406 of 2024, the impugned intimation dated 17 th February 2026 in

Form DRC-01A was issued to the Petitioner under Section 74(5) of the CGST Act,

inter alia raising a demand of Rs.1,35,91,41,680/-, as ascertained for the Financial

Years (FY) 2021-2022 to 2023-2024, along with applicable interest and penalty

towards GST liability payable by the Petitioner.

xiii. The Petitioner filed a preliminary reply/objection dated 24 th February

2026 to the impugned intimation dated 17th February 2026 to pay tax in Part B of

Form DRC-01A.

  1. It is this impugned intimation dated 17th February 2026 that the

Petitioner seeks to challenge through the present writ petition. The issue therefore

which has fallen for consideration before this court is whether the impugned

intimation issued under Section 74(5) of the CGST Act read with Rule 142(1A) of

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the CGST Rules has been correctly issued to the Petitioner raising a demand of

Rs.1,35,91,41,680/.

  1. Learned Senior Counsel Mr. Vikram Nankani, has submitted that the

issuance of the impugned intimation under Section 74(5) of the CGST Act read

with Rule 142(1A) of the CGST Rules to the Petitioner has been issued arbitrarily

and without considering the facts of the present case. It is further his submission

that the impugned intimation is a vague and cryptic intimation without any details.

He also submitted that the said intimation does not make any reference to any

record, submission or documents submitted by the Petitioner during the course of

the investigation and does not make a reference to the Chartered Accountant's

report dated 26th April 2024 who was appointed by Respondent No.2 in terms of

order of this Court dated 14 th March 2024 under the provisions of the Section 66 of the CGST Act. It is therefore his submission that once the special auditor has

given his report and there are no adverse observations made by the special auditor

in the aforesaid report, the Respondent Department cannot initiate purported tax

demands by way of the impugned intimation. It is also his submission that no

orders have been passed insofar as the impugned intimation is concerned

ascertaining the tax liability and therefore there has not been a proper adjudication

made by the Respondent Department prior to issuing the impugned intimation.

  1. We have heard learned senior counsel, Mr. Vikram Nankani, and Mr.

Prakash Shah along with Advocates Mr. Mihir Mehta, and Mr. Vikas Poojary on

behalf of the Petitioner. We have also heard Mr. Karan Adik, Ms. Megha Bujaria,

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Mr. Chirag Sawant and Ms. Sangeeta Yadav on behalf of the Respondents. We have

perused the impugned intimation and also the proceedings. Considering that the

challenge is only to the impugned intimation notice, we are of the view that the

filing of the present writ petition is a premature step taken by the Petitioner, and

there has been no adjudication which has taken place prior to the issuance of the

impugned intimation. We are also of the view that now the special audit under Section 66 of the CGST Act as directed by us in Writ Petition No. 3406 of 2024

has also been carried out, the benefit of that report can be taken into consideration

for adjudicating the demand if any payable by the Petitioner. This is a fact finding

process which we are not inclined to carry out in the present writ proceedings. We

have also considered the submission made by learned senior counsel Mr. Nankani

that Rule 142(1A) of the CGST Rules does not culminate into passing an order

raising a demand on the assessee and therefore the Petitioner is constrained to file

the present petition impugning the said intimation which has raised the demand

on the Petitioner. We are therefore of the view that the right course of action in the

present proceedings is for the Respondent Department to issue a show cause notice

and adjudicate the issue and post which once an order is passed on the show cause

notice, the same can be subject matter of challenge in appellate proceedings.

  1. Further, Section 107 of the CGST Act provides for Appeals to the

Appellate Authority, and we are of the view that this alternative remedy can be

availed of by the Petitioner once an order post show cause notice on the impugned

intimation is passed by the authorities under the CGST Act. It would be beneficial

to reproduce Section 107 of the CGST Act which reads thus:-

                                   Page 9 of 13

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            "107. Appeals to Appellate Authority.-- (1) Any person
            aggrieved by any decision or order passed under this Act or the
            State Goods and Services Tax Act or the [Union Territory Goods
            and Services Tax Act](https://indiankanoon.org/doc/112798358/) by an adjudicating authority may appeal to
            such Appellate Authority as may be prescribed within three
            months from the date on which the said decision or order is
            communicated to such person.

            (2) The Commissioner may, on his own motion, or upon request
            from the Commissioner of State tax orthe Commissioner of
            Union territory tax, call for and examine the record of any
            proceedings in which an adjudicating authority has passed any
            decision or order under this Act or the State Goods and Services
            Tax Act or the [Union Territory Goods and Services Tax Act](https://indiankanoon.org/doc/112798358/), for
            the purpose of satisfying himself as to the legality or propriety of
            the said decision or order and may, by order, direct any officer
            subordinate to him to apply to the Appellate Authority within
            six months from the date of communication of the said decision
            or order for the determination of such points arising out of the
            said decision or order as may be specified by the Commissioner
            in his order.

            (3) Where, in pursuance of an order under sub-section (2), the
            authorised officer makes an application to the Appellate
            Authority, such application shall be dealt with by the Appellate
            Authority as if it were an appeal made against the decision or
            order of the adjudicating authority and such authorised officer
            were an appellant and the provisions of this Act relating to
            appeals shall apply to such application.

            (4) The Appellate Authority may, if he is satisfied that the
            appellant was prevented by sufficient cause from presenting the
            appeal within the aforesaid period of three months or six
            months, as the case may be, allow it to be presented within a
            further period of one month.

            (5) Every appeal under this section shall be in such form and
            shall be verified in such manner as may be prescribed.
            (6) No appeal shall be filed under sub-section (1), unless the
            appellant has paid--

            (a) in full, such part of the amount of tax, interest, fine, fee and
            penalty arising from the impugned order, as is admitted by him;
            and

            (b) a sum equal to ten per cent. of the remaining amount of tax
            in dispute arising from the said order, [subject to a maximum of
            twenty-five crore rupees], in relation to which the appeal has
            been filed.

                                     Page 10 of 13

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            (7) Where the appellant has paid the amount under sub-section
            (6), the recovery proceedings for the balance amount shall be
            deemed to be stayed.

            (8) The Appellate Authority shall give an opportunity to the
            appellant of being heard.

            (9) The Appellate Authority may, if sufficient cause is shown at
            any stage of hearing of an appeal, grant time to the parties or any
            of them and adjourn the hearing of the appeal for reasons to be
            recorded in writing:

            Provided that no such adjournment shall be granted more than
            three times to a party during hearing of the appeal.

            (10) The Appellate Authority may, at the time of hearing of an
            appeal, allow an appellant to add any ground of appeal not
            specified in the grounds of appeal, if it is satisfied that the
            omission of that ground from the grounds of appeal was not
            wilful or unreasonable.

            (11) The Appellate Authority shall, after making such further
            inquiry as may be necessary, pass such order, as it thinks just and
            proper, confirming, modifying or annulling the decision or order
            appealed against but shall not refer the case back to the
            adjudicating authority that passed the said decision or order:

            Provided that an order enhancing any fee or penalty or fine in
            lieu of confiscation or confiscating goods of greater value or
            reducing the amount of refund or input tax credit shall not be
            passed unless the appellant has been given a reasonable
            opportunity of showing cause against the proposed order:

            Provided further that where the Appellate Authority is of the
            opinion that any tax has not been paid or short-paid or
            erroneously refunded, or where input tax credit has been
            wrongly availed or utilised, no order requiring the appellant to
            pay such tax or input tax credit shall be passed unless the
            appellant is given notice to show cause against the proposed
            order and the order is passed within the time limit specified
            under [section 73](https://indiankanoon.org/doc/107027098/) or [section 74](https://indiankanoon.org/doc/21142678/).

            (12) The order of the Appellate Authority disposing of the
            appeal shall be in writing and shall state the points for
            determination, the decision thereon and the reasons for such
            decision.

            (13) The Appellate Authority shall, where it is possible to do so,
            hear and decide every appeal within a period of one year from
            the date on which it is filed: Provided that where the issuance of

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            order is stayed by an order of a court or Tribunal, the period of
            such stay shall be excluded in computing the period of one year.

            (14) On disposal of the appeal, the Appellate Authority shall
            communicate the order passed by it to the appellant, respondent
            and to the adjudicating authority.

            (15) A copy of the order passed by the Appellate Authority shall
            also be sent to the jurisdictional Commissioner or the authority
            designated by him in this behalf and the jurisdictional
            Commissioner of State tax or Commissioner of Union Territory
            Tax or an authority designated by him in this behalf.

            (16) Every order passed under this section shall, subject to the
            provisions of [section 108](https://indiankanoon.org/doc/198408635/) or [section 113](https://indiankanoon.org/doc/103528674/) or [section 117](https://indiankanoon.org/doc/67986920/) or [section
            118](https://indiankanoon.org/doc/79595844/) be final and binding on the parties."
  1. Mr. Adik learned counsel on behalf of the Respondent Department has

fairly submitted that the Respondent Department would issue a show-cause notice

to the Petitioner within 2 weeks of receipt of this order, and adjudication

proceedings in respect of the impugned intimation would be carried out by the

Department. Considering the aforesaid submission, and our view that the

Petitioner needs to avail of an alternate remedy under Section 107 of the CGST

Act by filing an appeal before the Appellate authorities, we do not find any reason

to interfere in these proceedings under Article 226 of the Constitution of India. We

therefore deem it appropriate to pass the following order which would meet the

ends of justice: -

                                        ORDER i.               Respondents to issue a show-cause notice to the Petitioner in respect of

the demand sought to be raised by way of impugned intimation within a period of

2 weeks from the date this order is made available to the Respondents by the

Petitioner.

Laxmi

                                                                      WP(L) 5576 OF 2026(1).DOC

ii. A personal hearing shall be granted to the Petitioner within 10 days of

receipt of show-cause notice by the Petitioner.

iii. The Petitioner shall be at liberty to raise all contentions in respect of

the demands raised by the impugned intimation at the time of the personal

hearing.

iv. Respondents to pass a reasoned and speaking order post the personal

hearing as expeditiously as possible and preferably within a period of 3 months

from the date this order is made available to the Respondents.

v. All rights and contentions of the parties are expressly kept open.

vi. Writ Petition is disposed of in the above terms. No costs.

(AARTI SATHE, J.) (G. S. KULKARNI, J.)

Laxmi

Named provisions

Intimation of tax ascertained as being payable under Section 74(5) of the CGST Act

Source

Analysis generated by AI. Source diff and links are from the original.

Classification

Agency
Bombay HC
Filed
March 4th, 2026
Instrument
Enforcement
Legal weight
Binding
Stage
Final
Change scope
Substantive
Document ID
WP(L) 5576 OF 2026(1).DOC

Who this affects

Applies to
Public companies
Industry sector
3114 Food & Beverage Manufacturing
Activity scope
Tax Assessment Tax Compliance
Geographic scope
IN IN

Taxonomy

Primary area
Taxation
Operational domain
Legal
Topics
Corporate Law Administrative Law

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